When you are purchasing auto insurance, one of the first questions your BrokerLink broker will ask you is: “What is your annual mileage?”
How much you drive your vehicle is an important factor in determining your premium. The further you drive, the higher your premium may be. Some people use their car to commute to work daily, while others only drive on weekends.
When it comes to car insurance, how much you drive makes a difference. That’s why it’s essential to understand how to calculate annual mileage. With that in mind, we’ve put together a guide that includes multiple ways to get your answer. It’s time to dive in.
Three ways to calculate your average annual mileage
Your driving habits have a direct impact on your insurance costs. Your yearly mileage is included here. That’s why it’s important to understand how much you drive. The more you drive, the more you will pay. Constantly going out and about causes vehicle depreciation over time, which can add up when you take things like fuel costs into account. Here are some ways to calculate the number of miles you drive each year:
Finding the annual mileage of a brand-new car
If you bought a brand-new car, you likely have low mileage. Finding out your yearly mileage is easy. All you have to do is check your odometer reading and divide it by the number of years you have had your car. We break it down below:
For 3 years old: Current odometer reading ÷ 3 = annual mileage.
For 3 ½ years old: Current odometer reading ÷ 3.5 = annual mileage.
Check previous vehicle maintenance and service records
If you have had your cars for a few years, you can use your vehicle maintenance and service records to calculate mileage. Compare your vehicle’s mileage during an oil change to today’s mileage.
For a year ago: Current odometer reading – old odometer reading = annual mileage. For six months ago: Current odometer reading – old odometer reading x 2 = annual mileage.
Calculate your commute and weekend kilometres
If you don’t own a brand-new car or don’t have your service records on hand, calculating your annual mileage isn’t too hard. All you have to do is combine the distance you commute to and from work with how far you drive on the weekends. We break this process down into simple steps:
Step 1: Commute mileage
Multiply your work commute (both ways) by the number of days you commute to work in a week.
Maybe you’re unsure about your daily commute. Google it! Google Maps will tell you how many kilometres there are between your home and work address.
20 km one way to work = 40 km per day x 5 days per week = 200 km per week for weekday commute.
Step 2: Weekend mileage
You can also find out how far you drive on an average weekend. Add your weekend mileage to your commute mileage to get your total mileage per week.
Not everyone knows how often they drive each weekend. As a rule of thumb, double the average kilometres you travel to work per day and use that number as your weekend mileage. Remember, this number can also vary, especially if you visit your cabin or cottage in the mountains during the summer months.
200 km per week from commute + another 80 km weekend driving = 280 km per week.
Step 3: Annual mileage
The final step is determining your annual mileage. Now that you understand how far you drive each week, you can find out the distance you drive in a year. Here’s how to calculate your annual mileage.
Multiply your weekly mileage by 52 (number of weeks in a year).
280 km x 52 weeks = 14,560 km per year.
Tips to calculate driving mileage
You can calculate annual mileage using any of the three methods we discussed. It all comes down to your personal circumstances and preferences. Next, we will provide some tips and tricks to help you ensure accurate calculations below:
Make a list of everything you use your vehicle for
To use any of our methods effectively, you should create a long list of everything you use your vehicle for. The basics, like driving to work, are easy to remember. However, many drivers forget to account for other uses, such as driving to college or university, socializing with friends, running errands, or travelling (either to and from the airport or on road trips).
Avoid over or underestimating your annual mileage
When you’re calculating your annual mileage, you need to be as accurate as possible for insurance purposes to avoid paying too much. If you overestimate your annual mileage, your insurance company will raise your car insurance premium. On the other hand, you shouldn’t intentionally underestimate your annual mileage to get a cheaper policy. If your insurance company finds out, they could cancel your insurance policy. That’s why you should think long and hard about the total miles per year you drive.
Always update your insurance company if your annual mileage changes
Driving habits change, and so can your average annual mileage. In some cases, your average number of kilometres driven per year can increase; on the flip side, they can also go down. Whether you started working remotely full-time and no longer have to commute or got a new job that requires you to drive to work, you should call your insurance company. These and other factors can alter your car’s annual mileage significantly.
If you had low mileage and now have high annual mileage, you reach out to your insurance company. This can cause your car insurance to be expensive, but it also ensures you get the coverage you need. After all, the more time you spend on the road, the higher your odds of getting into a collision are.
In contrast, if you drive less than you used to, you should also let your insurance company know. This can potentially reduce your car insurance rates in the future and make you eligible for low-mileage car insurance. Some insurance companies offer refunds if your mileage is significantly lower than your initial estimate. When this happens, you can try asking your insurance provider to give you some money back.
The importance of calculating your estimated annual mileage
Why is calculating the number of miles you drive per year so important? How far car owners drive directly impacts the costs of car insurance. Car insurance companies consider various factors when calculating your car insurance premium, and your annual mileage is one of them.
If the amount of time you spend behind the wheel is minimal, your annual mileage will be lower, reducing your car insurance rate accordingly. In contrast, if you spend a significant amount of time on the road (e.g. if you drive as part of your job or have a long commute to and from work), your mileage will be higher, and you will have to pay for it.
As a result, driving less is a great way to reduce your car insurance costs. No matter how much you drive, you should always be upfront with insurers to avoid misrepresentation and risking losing your policy.
Other reasons to calculate annual mileage
Outside of car insurance, there are reasons to calculate your car’s annual mileage. You should take note of your daily commutes and any additional trips to determine how far you drive each year. That’s because there are other circumstances where knowing your annual mileage matters. Let us walk you through them:
Maintenance
An important part of maintaining your car is knowing when to book appointments with your local mechanic. Regular car maintenance and services are required to keep your vehicle in top shape—the majority of the time, you need to get certain services at intervals. For example, you will need an oil change every couple thousand kilometres and changing to snow tires is part of winter car maintenance. By keeping track of how much drive through your own means or an annual mileage calculator, you can expect your vehicle to last longer and perform better.
Environmental impact
If you drive a gas-powered vehicle, you are releasing greenhouse gases into the air. This is especially true if you are on the road all the time. You can decrease your negative impact on the environment by driving less. Try carpooling, taking public transit, or another mode of transportation to travel shorter distances. You don’t just reduce your risk level to your insurance company; you also do your part when it comes to helping Mother Earth.
Personal awareness and driving habits
If you figure out how far you drive each year, you can better understand your personal driving habits. In turn, you can find how often and how long your trips are. This can help you find alternative routes and cut down on commute times, which, in some cases, can reduce your car insurance rates. It will also allow you to determine if there are other ways to get to your destination. This makes the road safer for you and everyone around you.
Determining if mileage is genuine
If you’re looking to save money, you might purchase a used car with higher mileage. That’s why it’s important to know how to determine if a vehicle’s total mileage is genuine. This can be a beneficial process for you and your insurance company. Here’s what you should do to ensure everything looks right:
Review the service history
A vehicle’s service history is one of the many documents required to purchase car insurance. It will show any services, such as repairs and regular maintenance practices. Additionally, these documents will show the mileage at the time of the service. That’s why it’s important to make sure the numbers add up, and nothing suspicious is going on.
Take a close look
Before you make a decision, give the vehicle a closer look. The physical condition of the vehicle you’re purchasing says a lot about the mileage. If the parts and components show signs of wear and tear, the vehicle is more likely to have had a high annual mileage in the past. If the mileage is low and the vehicle isn’t in great condition on the interior or exterior, proceed with caution.
Get a VIN check
You can easily get a VIN (vehicle identification number) check to verify that the vehicle you’re buying is as it seems. Many options are available online. Running a check will show you the annual mileage and tell you everything you need to know about the vehicle. However, more than simply mileage, such as accident history, comes into account when purchasing a vehicle.
Go for a test drive
Going for a test drive makes a difference for a plethora of reasons. You don’t have to be a mechanic to recognize if something isn’t right with your potential new vehicle. When you get behind the wheel, you might notice that the odometer reading doesn’t line up with the distance you’re driving. A jerky transmission, worn brakes, and clutch suspension can also come into play. This also helps determine what good gas mileage is for the car.
Contact BrokerLink to find insurers who advocate for you
Now you know what to expect when it comes to how your driving habits impact your car insurance rates. You might also be interested in learning about other factors that affect premiums. These include:
- Location
- Age
- Make, model, trim, and year of the vehicle you drive
- Driving record
- Driving experience
- Past claims
- Prior insurance coverage
- Your deductible
- Local laws
- How you use your vehicle
- Marital status
If you need multiple auto insurance policies, you will need reliable car insurance brokers. Whether you’re looking for uninsured auto insurance or wondering how much car insurance costs per month in Ontario, we are here for you.
Contact your BrokerLink broker if you notice a big change in your yearly mileage. For example, if you are a regular commuter going on maternity leave, your annual mileage will go down. This can save you money on your premium. Reach out to us today.
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