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 will be a factor when determining your premium. The farther you drive, the higher your premium may be. Some people use their car every day to commute to and from work, while others use their car only on weekends.
Here are three different ways you can figure out your annual mileage
1. If you bought your car brand new
Check your current odometer reading and divide it by the total amount of years you have had your car:
For 3 years old: Current odometer reading ÷ 3 = annual mileage.
For 3 ½ years old: Current odometer reading ÷ 3.5 = annual mileage.
2. Check previous vehicle maintenance and service records
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 6 months ago: Current odometer reading – old odometer reading x 2 = annual mileage.
3. Calculate your commute and weekend kilometres
Step 1: Commute Mileage
Multiply your commute to work (both ways) to the number of days you commute to work in a week.
Not sure of your daily commute? Google it! Google will tell you the exact kilometres from your home address to your 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
Figure out what kind of mileage you drive on an average weekend. Add your weekend mileage to your commute mileage to get your total mileage per week.
Not sure what your weekend mileage is? As a rule of thumb, double the average kilometres you travel to work per day and use that number as your weekend driving mileage. This might change if you are headed farther away most weekends, such as to your cabin or cottage or to the mountains.
200 km per week from commute + another 80 km weekend driving = 280 km per week.
Step 3: 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 on how to calculate driving mileage
Now that you know three ways to calculate driving mileage, we’re going to let you in on a few tips and tricks:
Make a list of everything you use your vehicle for
Before you use any of the calculation methods listed above, we recommend making a long list of everything you use your vehicle for. It’s easy to remember the basics like driving to work, but many drivers fail to take into account other uses, like 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
Anytime you’re calculating your annual mileage, it’s crucial to be as accurate as possible to avoid paying more than you have to for car insurance. If you overestimate your annual mileage, the insurance company could raise your premium. Alternatively, if you intentionally underestimate your annual mileage to get a cheaper policy, there could be serious consequences if your insurance company finds out. They could cancel your policy, which would make it difficult to find a policy in the future. For this reason, think long and hard about where you drive your car and how long these distances are. This will ensure you paint as accurate a picture as possible.
Always update your insurance company if your annual mileage changes
Driving habits change. Some drivers might reach a point where their driving habits change so much that their annual mileage is drastically different from what it was when they first purchased their policy. Whether you started working remotely full-time and no longer have to commute, or got a new job that requires you to drive for work, a change in your annual mileage always warrants a call to your insurance company.
If your annual mileage has increased, be sure to tell your insurance provider right away. Otherwise, your insurance could end up being more expensive if your mileage is higher than anticipated. (This is because the more time you spend on the road, the higher your odds of getting into a collision.)
On the other hand, if you now drive far less frequently than you used to, it’s still worth telling your insurance provider as it could reduce your rate in the future. Some insurance companies even offer refunds if your mileage is significantly below what you estimated. It’s certainly worth asking your insurance provider if they’d be willing to give you some money back.
The importance of calculating your estimated annual driving distance
Why is calculating your annual mileage so important? How far you drive can impact the cost of car insurance. That’s right, insurance companies in Canada will consider several factors when calculating your car insurance premium, and one of them is your annual mileage.
If you spend a below-average amount of time behind the wheel, you will have low annual mileage, and your car insurance rate might be cheaper accordingly. However, if you spend a lot of time on the road (e.g. if you drive as part of your job or have a long commute to and from work), then you will have high annual mileage and your rates might be more expensive. Therefore, driving less is a great way to keep car insurance costs down. This is why it’s so important to be upfront with your insurance company if you drive infrequently or if your annual mileage changes.
Now that you know how annual mileage can influence car insurance rates, you might be interested to learn about some of the other factors that impact premiums. They include:
- Make, model, 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
Something to keep in mind: Contact your BrokerLink broker if your mileage per year is changing. For example, if you are a regular commuter that is going on maternity leave, your annual mileage may go down and save you money on your premium.