With gas prices approaching or exceeding $4 a gallon across the country, many drivers are finding alternate ways to get to work, school or other destinations. It’s simply not affordable to drive everywhere when a single tank of gas can cost $80 to $100. Fortunately, there is a silver lining to the high cost of gas: People who drive fewer miles can get a price reduction on their auto insurance.

A study released by ConsumerFed.org shows that drivers can reduce the overall cost of their auto insurance by between 5% and 15% simply by reducing the amount of driving they do each year. While these savings account to between $50 and $150 a year in most states, there is no reason not to pursue this type of discount if it applies to you.

Why Driving Fewer Miles Saves You Money

Auto insurance companies assume that all drivers put an average of 10,000 miles on a car each year. People who drive less than this have a lower risk of being involved in an auto accident, so their rates will be lower. Additionally, the way a vehicle is used will have an impact on how much it will cost to insure. For example, cars that are used to commute to work will cost more than those that are used for pleasure driving only. This is because commuter cars are more likely to be driven through congested traffic and at peak traffic times throughout the day, increasing their likelihood of being in an accident.

People who travel extensively for business will also pay more for auto insurance than those who do not. Depending on the situation, it may be more affordable to travel by plane or make other travel arrangements to business conventions or other locations. Additionally, people can save money on both gas and car insurance by telecommuting whenever possible. There are many ways to reduce the number of miles you drive each year such as:

  • Carpool with friends and coworkers instead of taking separate cars to work
  • Telecommute whenever possible
  • Take advantage of mass transit like buses or trains
  • Ride a bicycle or walk to work or the store
  • Take vacations close to home instead of going on long road trips
  • Travel to business functions with coworkers and split the expenses
  • Save all of your errands for a single day and complete the at once rather than making multiple trips
  • Calculate the most efficient routes to get to places you need to go

Not only will reducing the amount of miles on your car save you money on gas and insurance, it will also extend the life of the vehicle and reduce the amount you will need to spend on maintaining it. It will also help you do your part for improving the overall health of the environment by engaging in these green activities.

Even if you can’t commit to public transportation, carpooling or biking all the time, each time you choose one of these modes of transportation rather than driving will reduce your mileage and your carbon footprint so it’s definitely worth the time and effort that it takes.

How to Save Money on Insurance for Low Mileage

If you have reduced the amount of driving that you do in a given week or year, you can contact your insurance company to ask for a reduced rate. The insurer will ask some questions about your driving habits, so be prepared to give an explanation of your habits and an estimate of your annual mileage. You may be required to provide odometer readings or other proof of your new driving habits.

Some insurance companies extend this discount further by offering pay-as-you-go auto insurance policies. These require insureds to install a device in their vehicles that will review driving habits and report back to the insurer. Habits tracked by the device include number of miles traveled, acceleration and braking habits, and the time of day the car is usually driven. Because the rates are calculated based on exact behaviors, the cost of insurance will vary from one month to the next.

Whether you choose a pay-as-you-go policy or simply get a reduced rate for driving fewer miles each year, you can save money on your car insurance and reduce your gas prices by driving less. You can check with your insurance company to see if there are any other discounts you may be able to take advantage of that will reduce your overall insurance bill.