Why Do Low-Mileage Drivers Pay More For Their Car Insurance?

Mon 8th Jun 2020

 

Drivers who drive less are subsidising those who drive twice as much and are at increased risk according to new research from a price comparison website.

The data, which has been put together following analysis from MoneySupermarket, has found that low-mileage drivers are being penalised and in some brackets are paying on average £239 more than those of the same age driving double the amount.

According to data provided by By Miles, the average annual distance driven by cars is 7,090, and the most popular annual mileage bracket on insurance quotes was between 5,000 and 6,000 miles.

Common sense tells us that those who drive more miles are at higher risk of an accident, but the premiums don’t reflect this and low mileage drivers are sometimes being charged up to £215 more than motorists who do twice the amount.

James Blackham, co-founder of By Miles, said: “People are still reeling from the insurance industry's loyalty penalty scandal and now we have another – the low mileage penalty.

“At a time when drivers are completing fewer miles during the lockdown, the unfairness of the traditional car insurance pricing structure is clear to see. If you drive less, you should pay less.

“It's a fact that lower mileage drivers are less likely to claim, so there is no logical reason for the higher charges they're facing.

 “Insurers must stop inflating premiums for lower mileage drivers to subsidise the higher claims costs of higher mileage motorists and start actively rewarding people for driving less.”

Drivers who travel for 12,000 miles a year are 50 per cent more likely to have an accident claim compared to low mileage drivers who drive less than 7,000 miles and 300 per cent more likely to claim than those driving less than 1,000 miles - but premiums are not reflecting this disparity.