Why Annual Mileage Affects Car Insurance Costs

*Guest post

It can seem like car insurance premiums are numbers randomly plucked from the sky, but there are actually some pretty hefty calculations that go into determining how much you will need to pay each year. One of the factors that are taken into consideration is the annual mileage, which might seem like strange criteria but there is a lot of logic behind the calculation and the higher the miles, the more you will have to pay.

Why is Mileage Important?

All insurance is based on risk, what you pay balances against your risk on the roads and the amount the insurance company will have to award on your behalf should an accident, theft, etc., occur. The more time you spend out on the roads the more your chances of being involved in an accident increase. It might sound pretty morbid, but that is a simple fact, so if you drive a lot for business or pleasure, your insurance premiums will be higher than those who don’t.

Lower Mileage, Lower Premiums

Obviously, the annual mileage estimation is not the only factor taken into account, your age, gender, where you park your vehicle at night, the type of vehicle and your claims history will all be taken into account, but if you can lower your mileage, you might find the premiums do decrease. But there is no point providing an estimate that bends the truth just to shave off a few pounds a month. If you were to be involved in an accident, you would open a claim, and this triggers a whole series of checks, and your mileage, which is shown on every annual MOT certificate, will be checked. If you are suspected of deliberately providing false information, the claim will be invalidated, and you can even be prosecuted.

Don’t Guess

It can seem like an impossible task and something that gets in the way when you are just trying to set up a new insurance policy, but you do need to provide an accurate as possible estimation. As already mentioned, your MOT certificate will give a mileage so you can start with that or have a look at service records as these also show the mileage figure. Failing that you can calculate the distance on each journey on an average week and multiply it by 52 to see what your annual mileage might be. Overestimating or guessing on the high side will cause you to pay more in premiums, so it is essential to be accurate.

Low Mileage Policies

While each insurance company has their own limits and ranges for calculating premiums, you will pay less if you have lower mileage. Some companies offer cheaper policies for drivers who only drive 25 miles a day or less, many offer policies for things like classic cars which are exclusively driven in the summer for shows and festivals, and there are often savings to be made for customers who have a black box fitted to their vehicle. Not only does this accurately track the mileage, but premiums can be lowered if safe driving is demonstrated.