Low Mileage Car Insurance

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Do you own a vehicle that doesn't spend much time on the road? You may qualify for low-mileage car insurance, which can help you save money on your auto insurance premiums. If you want to keep more money in your wallet, stick around.

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, 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?

Car insurance is mandatory for all Canadian drivers. However, because insurance is regulated by provincial governments, the types of coverage and coverage limits you require will vary based on where you live. For example, those living in Alberta and New Brunswick are mandated to carry direct compensation - property damage, while this policy is optional in all other provinces.

Auto insurance for low-mileage drivers

Car insurance is mandatory for all drivers in Canada, even for those who 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. Here's a closer look at the types of auto insurance low-mileage drivers will need to purchase and the coverage options they should consider:

Mandatory

Optional

Third-party liability car insurance 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.

For example, in Ontario, drivers are required to hold a minimum of $200,000 in third-party liability coverage at all times.

[Not mandatory in Ontario] 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, rather than you having to go through the other driver's car insurance company.

[Not mandatory in Alberta] Uninsured automobile insurance 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.

[Not mandatory in Newfoundland] If you, a passenger, or a pedestrian requires medical attention following a collision or accident, 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 car 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 damage to your 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 car 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 more type of optional car insurance coverage popular among low-mileage drivers 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. Note: coverage varies by province.

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.

For example, in Ontario, drivers are required to hold a minimum of $200,000 in third-party liability coverage at all times.

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Ways to save

To lower your car insurance premium, try these tips and tricks the next time you’re up for a renewal!

Discounts

Pay your premium upfront

Insurance companies typically add a surcharge to customers who pay monthly as it costs them money to process each payment. To avoid this 3% surcharge, consider paying your premium upfront!

Choose a higher deductible

The higher your deductible, the lower your premium will be, given that you’re technically taking on more of a financial burden should you need to file a claim with your insurance company. Only increase your deductible if you would feel comfortable paying more.

Bundle your insurance policies

Whether it be your home insurance, business insurance, car insurance, or other policies, bundling your coverage with the same provider can help you save up to 15% on each plan!

Savings Options

Ask about discount

Most insurance companies offer discounts to customers for installing security features on their vehicle, snow tires, remaining claims-free, completing a defensive driving course, and more. Don’t forget to ask whether you qualify for savings!

Shop around

To find the best coverage and deals available, make sure to shop around and get a quote from multiple insurance companies. You can do this on your own, or by working with an insurance broker!

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

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.

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 long do cars last in Canada?

If you're thinking of purchasing a new vehicle, you may be wondering, "How long do cars last in Canada?" On average, you can anticipate your vehicle lasting about 15 to 20 years. However, if you drive fewer kilometres than the average person, and stick to your summer car maintenance and winter car maintenance requirements, you could potentially extend the lifespan of your car.

What is a good gas mileage?

To get gas mileage, you'll need to calculate what the fuel economy of a vehicle is. Fuel economy is often measured in litres per 100 kilometres (L/100km). If you're seeking a car with good mileage, you should choose one that can travel more kilometres per litre. The more fuel-efficient the car, the less gas is used when travelling the same mileage as another vehicle. So, what is a good gas mileage? What is a good fuel economy? In general, a rating of 4 to 6 litres of gas per 100 kilometres represents adequate gas mileage, while some people may prefer 7 or 8 litres per 100 kilometres.

How much is car insurance per month in Ontario?

Whether you're moving to Ontario or purchasing auto insurance for the first time, you may have some questions regarding your insurance coverage, including, "How much is car insurance per month in Ontario? While there are numerous factors for an insurance company when calculating your insurance costs, on average, those living in Ontario spend approximately $150 per month for coverage.

What documents do I need for car insurance?

Whether you're buying low mileage insurance or a traditional auto policy, you'll need to have the right documents with you during your appointment. Now, you may be wondering, "What documents do I need for car insurance?" You'll need your driver's licence, vehicle identification number (VIN), proof of ownership, current insurance policy number, vehicle description (make, model, year), and distance travelled per year.

What to check when buying a used car?

Aren't sure what to check when buying a used car? Make sure to check its mileage and vehicle status. You'll also want to do an inspection of the interior and exterior to look for any damages. If possible, consider getting a mechanic to look at the engine and check for any concerns.

How will my insurance company know my annual 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. Note that eligibility rules apply.

What are some tips I can use to lower my annual 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. Here are some tips to help change your driving habits:

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 when possible.
Make carpool arrangements - If you have friends, family, or colleagues who live near you and are willing to give you rides, consider making regular carpool arrangements.
Take public transit - Finally, 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.

For affordable low-mileage auto insurance, contact BrokerLink

If you're looking for affordable auto insurance policies as a low-mileage driver, the experienced brokers from BrokerLink can help. When you work with an insurance broker from our team, you'll have access to multiple auto insurance policies from some of Canada's top car insurance companies.

To work with BrokerLink, visit us at one of our locations across Canada. If we're not close by, you can contact us over the phone or by email. And, if you're simply looking for a vehicle insurance quote, take advantage of our free online quote tool!

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