Car Insurance - mileage up = lower cost

jstallan

Weird one this but I thought I'd share.

Time of year to sort of my wife's car insurance. She generally does about 4,000 miles a year, but noticed this year it was nearer to 6,000. Ran through the usual process of gaining quotes at 6,000 miles but then increased it to 7,000 as she has been visiting a new friend recently - quote goes down £3!

Yup £3 isn't a lot but in this day and age it is something!

Also noticed that Sheila's Wheels didn't charge a processing fee for using a credit card...

mattk_180

I've come across this a few times actually. It happens when the value increases as well but that scenario is explainable. Never been given a reason as to why the premium comes down when the mileage goes up. Maybe because you drive more regularly you would be less likely to have a claim? But then surely being on the road more increases that risk?


The credit card charge could just be a case of forgetfulness or laziness, wouldn't take it that they don't charge at all.

indesisiv

I suspect that it is down to a distribution curve of accidents. If you don't drive much you are more likely to have one (I guess due to ongoing road experience) and if you drive a lot you are more likely to have one (Due to being on the road a lot). I guess there is a sweet spot in the middle where you are less likely to have one.

Aretnap

mattk_180 wrote: »

I've come across this a few times actually. It happens when the value increases as well but that scenario is explainable. Never been given a reason as to why the premium comes down when the mileage goes up. Maybe because you drive more regularly you would be less likely to have a claim? But then surely being on the road more increases that risk?

I would guess that people who drive very little are often (not always, but often) the sort of inexperienced or nervous drivers who tend to have quite a lot of accidents in spite of not actually doing too many miles. I believe that questions like "do you have access to another car" are at least partly there to differentiate the people who genuinely do very few miles from those who do tend to drive quite a bit - just not in that particular car.

There's also biases introduced by the fact that people don;'t always answer the questions honestly. If a lot of people put down unrealistically low mileages in the (possibly incorrect) belief that it will get them a cheaper quote then that will skew the statistics - especially if the same people are also not being entirely honest about other aspects of their driving history.