Average miles traveled per year: why is it important
Average annual mileage indicates the number of kilometers typically traveled by drivers during the year. You can casually use this number to determine if a vehicle is being used less or more than usual.
But auto insurance companies use average annual mile data points as a factor that influences your rate. Why? Because the more you drive, the more likely you are to be involved in an accident.
Understanding your average mileage per year and other driving habits can help you keep your insurance premiums in check.
What are the miles traveled on average per year?
The Federal Highway Administration of the United States Department of Transportation has stated that the average person traveled 14,263 miles per year in 2019. That’s about 1,200 miles per month per driver, or about 39 miles per day. By comparison, the DOT said the average annual miles was 13,476 in 2018.
People rely on their cars because public transportation systems vary by location. Without extensive public transportation systems that many Americans can rely on, cars allow many drivers to get to work, school, or play.
According to the Federal Highway Administration of the United States Department of Transportation, Americans traveled more than 3.26 trillion kilometers in 2019. That number has declined dramatically since the COVID-19 pandemic forced closures from 2020. This is when the The DOT said the average number of kilometers driven fell 10.3%.
How does annual mileage affect insurance rates?
Your annual mileage directly affects the amount you pay for auto insurance. Motorists who spend more time on the road have a greater risk of filing an insurance claim than occasional drivers who are less likely to have an accident.
Insurance companies use the number of kilometers driven each year, along with other criteria such as age and experience, to forecast your risk and set your premium accordingly. Typically, insurers ask for average annual mileage when drivers apply for a policy. It is best to make an honest estimate of the mileage you are driving.
While there might not be a legal consequence for underestimating your annual mileage on the app, it could become problematic if you have an accident. The insurer will know the mileage of the vehicle if a claim is made. Some companies request updates to odometer readings. Other carriers may perform random mileage checks to avoid “soft fraud” when the numbers are below average.
Be sure to let your insurer know if your driving circumstances change. Having a shorter commute could produce a lower premium. For commuting, business, or pleasure, the type of driving you drive affects the amount you pay for auto insurance coverage.
What are trip miles?
Getting to work is the number one reason most people drive a car. “Trip miles” is the term used to refer to the number of kilometers it takes for an insured to get to and from work. Insurance companies use the figure to help determine if a claimant’s annual mileage estimate is realistic.
Insurance companies often allow up to 20 miles each way for commuting before increasing fares. Daily commuters who travel more than this might see higher rates due to the extra time spent on the road, which often occurs in densely populated areas with a higher number of accidents.
Do different demographics play a role in annual mileage?
Insurance company actuaries calculate the numbers, predict risk among policyholders and set policy premiums accordingly.
The most recent DOT figures show that there are significant differences in driving behavior by gender and age group.
- Overall, men drive 6,000 more kilometers per year than women.
- Men between the ages of 34 and 54 drive the most, nearly 19,000 miles per year.
- Women over 65 drive the least – less than 5,000 miles per year.
- Men of working age travel about 7,500 more kilometers than women of working age each year.
- Drivers aged 16 to 19 and adults over 65 each travel an average of 7,600 miles per year.
- Motorists drive more each year until retirement, when annual mileage drops by 30%.
What do insurance companies consider low mileage?
Occasional drivers can save money if they drive less than the average annual mileage. Insurers generally give the highest discounts to drivers who travel less than 7,000 miles per year on their vehicles.
Low Mileage Auto Insurance works by tracking kilometers electrically, either with a telematics device installed in the vehicle or via a mobile app installed on your smartphone. The premiums for this type of insurance involve a fixed monthly rate and a nominal fee per mile.
Some motorists may have privacy concerns regarding the tracking, while others find that the cost savings outweigh any perceived intrusion. Don’t worry, however; they don’t care where you drive, but how many miles it takes to get there.
Some insurers offer low-mileage stand-alone policies, or you can sign up for mileage-based rebate programs through a standard insurance company.
Discounts for low mileage and other savings
What is considered low mileage varies among insurance companies. Check with your carrier for potential discounts on auto insurance based on mileage. Discounts may vary state to state, but driving fewer average annual miles can result in savings of around 3%.
Other vehicle-based insurances can generate savings of up to 15% using telematics devices, similar to those used for low-mileage pay-as-you-go policies.
The COVID-19 pandemic has spurred consumer interest in usage-based insurance policies using telematics. The increase in the number of people working from home or unemployed and the cancellation of public events has resulted in many cars being parked in garages and driveways instead of being driven around town. Many owners saw surveillance as a way to save money on unused vehicles.
Some insurance companies promote usage-based insurance and telematics to monitor teenage drivers and offer advice on vehicle maintenance and safe driving.
Average annual mileage for each state
Over 228 million drivers create averages in all 50 states and the District of Columbia. In the District of Columbia, drivers travel approximately 7,000 miles per year, the lowest average in the United States. Residents of Wyoming have the highest average of over 24,000 miles per year.
- Alabama: 17,817
- Alaska: 11,112
- Arizona: 13,090
- Arkansas: 17,224
- California: 12,524
- Colorado: 12,899
- Connecticut: 12,117
- Delaware: 12,609
- District of Columbia: 7,013
- Florida: 14,557
- Georgia: 18,334
- Hawaii: 11,688
- Idaho: 14,417
- Illinois: 12,580
- Indiana: 18,024
- Iowa: 14,745
- Kansas: 14,781
- Kentucky: 16,305
- Louisiana: 14,951
- Maine: 14,216
- Maryland: 13,490
- Massachusetts: 13,109
- Michigan: 14,307
- Minnesota: 17,909
- Mississippi: 19,966
- Missouri: 18,522
- Montana: 15,880
- Nebraska: 14,846
- Nevada: 14,015
- New Hampshire: 11,570
- New-Jersey: 12,263
- New Mexico: 19,157
- New York: 10,167
- North Carolina: 16,073
- North Dakota: 17,671
- Ohio: 14,278
- Oklahoma: 17,699
- Oregon: 12,218
- Pennsylvania: 11,445
- Rhode Island: 9,961
- South Carolina: 14,941
- South Dakota: 15,542
- Tennessee: 15,287
- Texas: 16,172
- Utah: 15,516
- Vermont: 13,004
- Virginia: 14,509
- Washington: 10,949
- West Virginia: 16,876
- Wisconsin: 15,442
- Wyoming: 24,068
Does the increase in average annual mileage have an impact on car prices?
The national average annual mileage in 2011 was almost 4,000 miles less than the most recent average in 2019. This increase in the number of kilometers driven per year also has an impact on how Americans choose to buy cars. , by choosing more fuel-efficient vehicles and electric vehicles.
Also, when you are selling a car, high or low mileage will impact the selling price in addition to vehicle depreciation and many other factors.
Drivers who rent their vehicle must recognize the number of kilometers traveled. Leases generally have annual mileage allowances of 10,000 miles or 12,000 miles. However, high mileage leases are available. This type of rental agreement costs more, allowing Americans to travel additional miles without exceeding their rental terms.