Low Mileage Car Insurance

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Do you have a car but seldom drive? Keep reading to learn more about low mileage car insurance, including how you can save money by taking advantage of your low mileage status.

BrokerLink compares rates from a wide range of providers, ensuring you get the best deals available.

What is low mileage car insurance?

Low mileage car insurance is a type of auto insurance aimed at infrequent drivers. Since car insurance rates partially depend on your driving habits (and more specifically, the frequency with which you drive), you can save money by spending a below-average amount of time on the road. The logic behind low mileage car insurance is that by driving less, your odds of getting into an accident decrease, and so too should your insurance rates.

Is auto insurance mandatory for low mileage drivers?

Yes, car insurance is mandatory for all drivers in Canada, even for those that qualify for low mileage discounts. Therefore, even if you spend less time on the road than the average driver, you still need to maintain valid insurance coverage.

Low mileage car insurance coverage

As mentioned above, low mileage drivers are not exempt from mandatory car insurance in Canada. This means that all low mileage drivers will need to ensure their policies are valid, up to date, and comply with the minimum coverage requirements in their province. Low mileage drivers may find that standard auto insurance in Canada is not enough. In that case, they can purchase several optional auto insurance coverages to add to their policies. Let's learn more about each one to help you find the best coverage available:

Mandatory

Optional

Third party liability coverage provides legal protection if you injure someone else or cause property damage to another person’s property on the road. This type of coverage can help pay for medical expenses associated with bodily injuries or repairs of damaged cars, as well as any applicable legal fees and settlements up to the coverage limit. In Ontario, drivers are required to hold a minimum of $200,000 in third party liability coverage at all times.

Direct compensation - property damage coverage protects an insured vehicle and its contents against property damage, so long as the policyholder is not at fault for the collision that caused said damage. Under this type of coverage, the insurance provider typically pays for the repair or replacement of your car directly. However, beginning January 1, 2024 direct compensation property damage coverage isn't mandatory in Ontario. Note that to be eligible for direct compensation coverage, the collision must meet the following circumstances: it occurred in Ontario, it involved more than one vehicle, and it involved at least one vehicle that participates in the province’s car insurance program.

Uninsured automobile coverage is designed to protect you and any passengers in your vehicle if you get into a collision with an at-fault driver who is either uninsured or underinsured. This type of coverage can also protect the policyholder in the event of a hit-and-run.

If you, a passenger, or a pedestrian requires medical attention following a collision, accident benefits coverage can help. This type of coverage is provided no matter who was at fault for the accident and it can help cover a wide range of medical expenses like prescription medications, physical therapy, or rehabilitation, as well as loss of income.

If you get into an accident with another vehicle or object on the road, no matter who is at fault for the accident, collision coverage can help cover the costs. Under the collision coverage section of your policy, you can receive compensation to help pay for any property damage that resulted from the accident, such as a damaged car.

Low mileage drivers may find comprehensive coverage worthwhile, especially if their vehicles spend a lot of time parked. This optional type of coverage protects against a wide range of circumstances other than collisions. Sometimes referred to as parked car insurance, comprehensive coverage will compensate you in the event of damage caused by an insured peril. Examples of insured perils are theft, vandalism, water damage, fire, falling objects, and more.

One final type of optional car insurance coverage is accident forgiveness. Accident forgiveness is additional coverage that can be added to your car insurance policy as an endorsement, to protect your driving record and to help prevent your insurance premium from increasing if you have an at-fault accident claim.

If you're buying a new car, adding this coverage to your policy is worth considering. It ensures you're covered for the full value of your vehicle without factoring in depreciation. That means if your car is stolen or totalled, you'll be reimbursed for the cost of a brand-new vehicle—not just what it's worth after wear and tear.

If you ever get into an accident and your car needs repairs, loss of use coverage has your back. While your car is in the shop, this coverage helps pay for other ways to get around—whether that's hopping on public transit, using ride shares, or renting a car. It can be a real lifesaver, especially if your car ends up being out of commission for days or even weeks.

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Tips for lowering your mileage

Lowering your annual mileage can have serious financial benefits, from saving you money on car insurance to saving you money at the gas station. Plus, driving less lowers your risk of getting into a car accident and injuring yourself or another. Not only that, but it can help keep your carbon footprint to a minimum and have positive effects on the environment. Therefore, if you are looking to lower your mileage for any of these reasons, follow the tips below:

Savings Options

Consider non-motorized modes of transportation:

Get some exercise while simultaneously lowering your mileage by swapping your car for other non-motorized modes of transportation. For example, rather than driving a short distance to school, work, or the grocery store, consider riding your bike or even walking. Doing so even once or twice a week can make a big difference.

Make carpool arrangements

If you have friends, family, or colleagues that live near you and are willing to give you rides, consider making regular carpool arrangements. Driving one car instead of two can help you save on gas money and mileage while lowering your environmental emissions.

Take public transit

If you live in a metropolitan area with a comprehensive public transit system, take advantage by leaving your car at home and taking the bus, subway, or streetcar to get around.

Other factors influencing auto insurance rates in Canada

Annual mileage is not the only factor that impacts car insurance costs in Canada. While it is an important one, an insurance company will consider many other factors when calculating premiums. For example, they will take into account a driver’s age, location, marital status, gender, driving record, and driving history.

They will also factor in the make, model, and year of the vehicle you drive, as well as the local laws in your province, how long you have owned your vehicle, and how you use your vehicle. How much you pay for low mileage car insurance also depends on the coverage you choose.

We detail the mandatory and optional coverage types available to low mileage drivers below. The more coverage you buy and the higher your coverage limits, the more your insurance policy is likely to cost. The same goes for your deductible - the lower it is, the more costly your insurance policy will be. A complete list of factors influencing auto insurance rates in Canada is below:

Age
Location
Driving experience
Driving record
Gender
Annual mileage
Local laws
Make, model, and year of the vehicle
How you use your vehicle
Insurance claims history
Vehicle ownership duration
Marital status
Coverage types, limits, and deductibles

Can low mileage drivers save money on auto insurance?

Yes, if you spend a below-average amount of time on the road, you may qualify for an insurance discount. Since the less you drive, the lower your risk of collision, insurance companies will likely reward you by reducing your premium.

How many kilometres is considered low mileage for car insurance companies?

It varies. Auto insurance companies in Canada have different thresholds for what is considered a low mileage driver. For example, some car insurance companies categorize people who drive less than 12,000 kilometres a year as low mileage, whereas others may only classify you as low mileage if you drive less than 15,000 kilometres annually.

If you are right around either of these thresholds, do your research to find out the exact annual mileage you need to qualify for a discount. You can also contact BrokerLink and we will find this information and ensure you get the best possible auto insurance discount.

What discount are low mileage drivers in Canada eligible for?

Again, this varies between insurance companies, but some providers offer major discounts (sometimes up to 40%). Therefore, it is certainly worth shopping around and finding out what discounts you are eligible for if you are an infrequent driver.

How do car insurance companies know a driver’s vehicle mileage?

To qualify for low mileage car insurance, and to continue receiving coverage at a discount rate, you will need to show that you do not drive more than a certain amount of kilometres each year.

How do insurance companies know a driver's vehicle mileage, you may be wondering? It all comes down to your car’s unique VIN or vehicle identification number. An insurance company can find out the mileage of a vehicle by searching up the VIN at any time. Therefore, a driver should never attempt to lie about their annual mileage, as an insurance company can easily gain access to this information.

How to get low mileage car insurance

There’s no denying it - low mileage drivers can save lots of money on car insurance. To take advantage of these discounts, follow the steps below to obtain low mileage car insurance:

1. Calculate your current annual mileage

Before applying for low mileage car insurance, calculate your annual mileage to ensure you qualify. To calculate your mileage, set the odometer in your car to zero and wait one week. After exactly one week, jot down the number of kilometres you have driven. Multiple that figure by 52 to get a rough estimate of your annual mileage. With this estimation in mind, research various insurance companies or contact an insurance broker to find out the mileage threshold you need to meet to be eligible for low mileage car insurance in your province.

2. Reduce your mileage, if necessary

If you don’t quite meet the threshold for low mileage car insurance, you can take the extra steps to reduce your annual mileage. For example, walk or ride your bike to work twice a week, carpool with a friend to school, or take public transit.

3. Contact an insurance broker

Once you’ve reduced your annual mileage, contact a reputable insurance brokerage like BrokerLink. We can help you obtain and compare quotes on low mileage car insurance to ensure you’re getting the best coverage at the lowest rate.

Is low mileage car insurance right for you? Contact BrokerLink to find out!

If you aren’t sure whether you qualify for low mileage car insurance or need help finding the right policy, contact BrokerLink. We are auto insurance experts that have been helping Canadians find car insurance policies for over 30 years. This means that we can help you find a low mileage car insurance policy with ease.

Get in touch by phone, email, or in person, and one of our friendly insurance advisors will be pleased to assist you. We also invite all drivers in Canada to take advantage of BrokerLink’s free online quote tool. Using this tool, you can receive an accurate and competitive low mileage car insurance quote in minutes. Contact BrokerLink now to begin your auto insurance journey.

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