Can driving less really reduce your premiums?

woman riding pink bicycle smiling
 Share

Updated Nov 4, 2021

With some Ontarians driving much less than they used to because of the COVID-19 pandemic, many are wondering how much the number of kilometres they drive affects their premiums. The answer is, all things considered, not much. The difference in premium between driving 10,000 km a year and 50,000 km a year is between 6 and 19%. On the other hand, if you drive less than 12,000 km a year, you can save as much as 40% with a payment plan called CAA MyPace.

During the COVID-19 pandemic, many Ontarians are driving less, and clearly it has led to a reduction in the overall cost of claims for auto insurance companies. In return, most of those companies have reduced their rates, and in some cases, sent rebate cheques to their customers. But on an individual basis, how much difference does it make if you tell your broker you drive 5,000 km a year or 25,000? And what about that “commute” question? Will you pay a lot more if your daily drive is 35 km as opposed to 5 km? Let’s take a look at some quotes to illustrate the differences.

Key findings

  • The difference in premium between almost not driving at all (3,000 km a year) and driving 50,000 km a year is between 17 and 34%
  • The difference in premium between a moderate-mileage driver (10,000 km a year) and a high-mileage driver (25,000 km a year) is between 6 and 19%
  • Daily commute and total kilometres driven are both factors in pricing
  • If you drive less than 12,000 km a year, you can save 40% on average with CAA MyPace

Does mileage affect different drivers differently?

To answer this question, we ran car insurance quotes for 4 different drivers. Based on our sample drivers below, it appears that younger drivers’ premiums are the least affected by the number of kilometres they drive. Which seems pretty fair, given that they tend to pay the highest premiums to begin with.

It also seems that younger drivers’ rates top out around 25,000 or 30,000 km a year, whereas older drivers continue to pay a little more for extra kilometres up to 40,000 or even 50,000 km a year.

If I only drive 5,000 km a year, can I save more?

For drivers who really only use the car to get groceries once a week, there is an innovative insurance payment plan from CAA Insurance that allows you to really cash in on your low-volume driving. CAA MyPace is a program whereby you install a special device in your vehicle that tracks the number of kilometres you drive, and then charges you based on real data from your own car. The savings are purely up to you, but can be significant:

Annual km Savings
1,000 70%
2,000 60%
3,000 50%
4,000 40%
5,000 30%
6,000 25%
7,000 15%
8,000 5%
9,000 4%
10,000 3%
11,000 1%
11,000+ No savings1

1If you drive more than 12,000 km a year, surcharges apply, and the program is actually more expensive than a traditional CAA policy.


Regardless how much you drive, save with Mitch

As licensed insurance brokers, we are specially trained to tailor our insurance offerings to your needs. We work with 70+ different insurance companies, and based on information that you provide, including how much you drive, we will recommend the insurance option that best suits your particular needs, meaning not just the best price, but a package of coverage that meets your needs…at a really great price. Call us today for a bunch of options, a great deal, and service that can’t be beat.


Leave a comment

Your email address will not be published. Required fields are marked *

Didn’t find what you were looking for?

Check out some of our other insurance products.