Driving less in retirement? Low-mileage options to ask about

Low-mileage discounts, pay-per-mile policies, driving-monitor programs and parked-car options for retirees whose cars sit in the driveway most days.

Why mileage matters

The more a car is on the road, the more chances it has to be in a crash. Insurers have long used yearly mileage as a rating factor, and newer tools let them measure it directly. Drivers who cover fewer than 7,500 miles a year, and especially fewer than 5,000, are often priced lower than those who drive 12,000 or more.

The simple low-mileage discount

The easiest option is to update the yearly mileage on your current policy. Many insurers give a discount once mileage falls under a set level. Some ask for an odometer photo or reading each year. It costs nothing to ask, and it requires no device or app. Be accurate; understating mileage can cause problems with a claim.

Pay-per-mile insurance

Pay-per-mile policies charge a monthly base rate plus a few cents for every mile driven, measured by a small device or the car's own connected system. For someone who drives 3,000 or 4,000 miles a year, the total can be much lower than a standard policy. For a person who drives a lot in some months, the bill rises with the miles. These policies are not sold everywhere, so check whether one is offered in your state.

Driving-monitor programs

Usage-based programs track how you drive, including braking, speed, time of day and phone use, through an app or plug-in device. Careful drivers who stay off the road at night and in rush hour can earn a discount. Ask whether the insurer can raise your price based on the data, because some can, and ask what is done with the information collected.

A second car that rarely moves

Many retired couples keep two cars but use one only now and then. Options include listing the second car with low mileage, dropping collision if it is older, or, if it will sit unused for months, asking about a parked-car option that keeps comprehensive coverage for theft, fire and weather. Be careful: most states require liability on any registered car, so removing it can put the registration at risk. Ask your insurer and your state motor vehicle agency before you change anything.

Worked example: comparing three options

Harold, 71, drives about 4,200 miles a year. His standard policy costs $1,560. Updating the mileage with his current insurer brings it to $1,390. A driving-monitor program with that insurer would likely take off another 10 percent after six months, to about $1,250. A pay-per-mile insurer in his state offers a $45 monthly base rate plus 6 cents a mile, or $540 plus $252, a total of $792 for the same coverage. He chooses pay-per-mile and sets a calendar note to compare again next year in case his driving changes.

Months away from home

Retirees who spend part of the year in another place should tell their insurer where each car is kept and for how long. A car stored at one home while you drive another elsewhere may qualify for lower pricing during the stored months. Policies are written for the state where the car is mainly kept, so a car that lives somewhere else most of the year may need its policy moved.

Keeping protection where it matters

Lower mileage does not mean lower stakes. A single serious crash costs the same no matter how many miles you drove that year, and retirement savings are a target in a lawsuit. When you cut costs, cut in places like collision on an older car or a higher deductible, and keep liability and uninsured motorist limits strong.

Reviewing each year

Retirement driving changes over time. Grandchildren move, health changes, and a car is sold or added. Once a year, look at your odometer, compare the miles with the figure on the policy and ask whether another program would cost less. A short annual check keeps the policy in step with the way you actually drive.

A practical way to measure your own miles

You do not need a special device to start. Write today's date and the odometer figure on a card in the glove box, then do the same in three months. Multiply the difference by four for a rough yearly total, or wait a full year if you want a cleaner number. Compare that total with the mileage printed on your declarations page. If the printed figure is thousands of miles higher than the way you actually drive, that difference is the first thing to raise with your insurer.

Couples who share two cars should measure each car separately. A sedan used for weekly shopping and a second car that moves only a few weekends a year should not carry the same mileage on the policy. Updating both figures in one call is usually enough to see whether a simple low-mileage credit, a monitor program or a pay-per-mile policy is the better fit for the household.

This guide is general information. Only your insurer can say what your policy costs or covers, and only your state can say what the law requires of you as a driver.