Car insurance customers are often urged to reduce their annual mileage as a simple way to save money on their premiums. However, new research from
Car insurance customers are often urged to reduce their annual mileage as a simple way to save money on their premiums. However, new research from Moneyshake has warned drivers may save under £20 on their yearly policy by updating their mileage highlighting it may not be a major factor.
Analysis from the group has shockingly revealed that reducing your mileage down to just 5,000 per year will only reduce your costs by £17.
Eben Lovatt, CEO of Moneyshake explains there is “no plausible reason why” costs are only slightly lower for decreased road use.
He said lower mileage, “should” reduce costs before urging drivers to consider using pay-per-mile cover as a simple way to decrease insurance costs.
He said: “Logically, lower mileage should reduce your insurance price because you spend less time on the road, so you’re less of a risk.
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Their research found that motorists who travel between just 5,000 and 6,000 miles each year are charged up to £233 more than those who travel over 12,000 miles.
A breakdown of Money Super Market data has shown those who travel between just 0 and 1,000 miles per year are charged the highest average of £877.67.
This is compared to just £576.42 for those that drive between 11,000 and 12,000 every year in a shocking revelation.
Around 60 percent of over 14.5million cars which had an MOT test in 2017 had driven their vehicle less than 7,100 miles.
This means millions of drivers could be paying more on their premiums despite using their car for less.
The Association of British Insurers (ABI) said annual premiums are calculated through a range of factors including mileage estimates.
However, other issues such as a driver’s age, previous claims record and driving history will also affect the premium price offered.
Younger drivers are automatically offered higher pieces as they are statistically more likely to be involved in a crash due to road inexperience.
Confused.com seemed to support the findings with the group claiming motorists should not “assume” lower mileage will lead to lower prices.
In a statement on their website, Confused,com urged drivers to find their real mileage figures instead of simply estimating it for an application.
The statement said: “Don’t assume that the lower your mileage, the lower your prices will be. Often, the opposite is true.
“The trick is not under- or over-estimating your mileage. Check the clock and get the real figure.