Americans Driving Less Can Save Them Money on Car Insurance and Cost

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Since March 2011, Americans have been driving fewer miles each month, according to a recent report in US Today.  This follows a trend of American driving less which started in 2008.  With spending less time in the car, Americans are saving money on the costs of driving and may be eligible for low mileage discounts.

The Trend

The economy is one factor.  More Americans are out of work leading to fewer commutes, less disposable income, and less shopping trips and vacations.  The price of gas has also been a factor.  Gas prices reached a record high of $4.11 in 2008 and stayed above $3.00 in 2011.  The fall of 2011 saw the lowest demand for gas since 2000. 

The demographics of today’s American population are also a factor.  Currently, there are 78 million baby boomers who are driving less because they no longer have children at home.   Most of the boomers live in the suburbs and spent years taking their children back and forth to activities.  Now that the children are out of the house and boomers are retiring, they are driving much less.   Teenager drivers are also a factor.  Teenagers are driving less due to low employment, lack of disposable income and teenager’s preference for smart phones and social media as an outlet for independence over driving.  The Department of Transportation reported 50% of 16 year olds got their first driver’s license in 1978 while only 30% of 16 year old got their first driver’s license in 2008.    

Saving Money on Car Insurance

With driving less, consumers are saving money on gas, car maintenance and repairs.  In addition, people who drive less will have better driving records and will pay less for car insurance premiums.  With some companies, people who drive less are eligible for low mileage discounts which can save them up to 10% to 20% on their policy.   Low mileage discounts are offered by car insurance companies who reason that if someone drives less, they will have less accidents and less claims.  Many companies use 7,500 miles as the number of miles allowed annually to qualify for this discount.  To prove your mileage, some companies have an honors system while others have an authorized auto repair shop record the mileage or rely on your records from a monitoring system like Onstar. 

If you are one of the millions of Americans who have found yourself driving less in recent years, contact your car insurance policy agent and asking if they offer a low mileage discount.  This might be a great way to maximize your savings on car insurance.  

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