Save a Buck: Drive Less, Pay Less for Insurance

Put fewer miles on your vehicle and you may be eligible for a discount on your auto insurance.

Many insurers have a “drive less, pay less” plan (valid only in certain states) that reduces rates for lower mileage. These companies generally take anywhere from 10 to 18 percent off if you drive fewer than 7,500 miles a year.

State Farm and Liberty Mutual take your word for it, but they limit the offer to drivers age 25 and older. Other insurers offer even bigger discounts but require monitoring equipment. For instance, GMAC requires that you have an OnStar subscription (around $19 a month) and sign up at no additional cost for OnStar Vehicle Diagnostics, which automatically reports your monthly mileage. Your premium is adjusted every six months, saving you as much as 54 percent if you drive 15,000 miles or less a year. Progressive’s MyRate program monitors your driving habits as well as your miles, using a small wireless device in your car, and offers as much as 25 percent off your premium.

Joan Rattner Heilman is the author of Unbelievably Good Deals and Great Adventures That You Absolutely Can’t Get Unless You’re Over 50 (McGraw-Hill, 2009-2010).