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I am a mature, experienced driver with an unblemished driving history. I live by myself and currently own two vehicles. In my primary vehicle my annual mileage is below 3000 miles. In my secondary vehicle my annual mileage is less than 400 miles. I have always assumed that by insuring my second vehicle as a pleasure vehicle I should be able to make significant savings on my premium. However I have been advised by a trusted agent that this is not the case, and that I could actually end up paying much more. How can I find out if this information is accurate?
It is certainly possible to save money by insuring a vehicle as a pleasure vehicle. By entering your details on an insurance comparison website you will instantly have access to many providers willing to offer you reduced rates. The savings could be well worth the effort.
Each motor insurance provider will have their own method of calculating quotes for potential customers. By assessing your answers to certain questions they will calculate risk to arrive at a premium price tailored specifically to you. The following factors will be taken into consideration:
. Age
. Gender
. Marital status
. Driving record
. Claims history
. Years of driving experience
. Credit history (not authorised in all states)
. Geographical location
. Vehicle type
. Vehicle use (personal or business use and annual mileage)
. Coverage types, limits and deductibles. A commuter car that is in use on a daily basis is far more likely to be involved in a collision than a car used only on occasional weekends. They will also accumulate mileage at a much greater rate, hence the higher premium. As your annual mileage is actually fairly low in both vehicles it may even be possible to insure both as pleasure use only. You are not using either car on a daily basis for commuting to and from work.
Low annual mileage will often result in a reduced premium being offered by insurance providers. You can typically expect to save between 5-15 percent if you cover less than 7 000 miles per year. Some providers will be prepared to drop the price if your mileage is below 12,000 miles per year.
I would strongly suggest looking elsewhere for your car insurance if your current insurer is not offering discounts for either vehicle. Both of your cars fall well below the average low mileage threshold.
To illustrate, I obtained motor insurance quotes using the information you supplied in your question. Of course I had to be a little creative with the truth but the basics are comparable.
A 66 year old female driver, living in your area, retired and living alone. Two vehicles, a 2009 Toyota Camry and a fun pleasure car of a 1988 Porsche 911.
Coverage of $100,000 pp and $300,000 per accident for bodily injury liability and $50,000 for property damage liability per car. The cars also carried collision and comprehensive. I set the deductibles at $500 each.
I initially ran the quote with both vehicles categorized as pleasure cars. 3000 mpa for the Camry and 400 mpa for the Porche. The lowest combined premium was $1,150. When I ran the quote again, changing the change of use for the Camry from pleasure to commuter with an annual mileage of a relatively low 10,000 mpa the premium rose by almost $300 to $ 1,404.
This is of course just an example. And the exact price you pay will vary according to your individual circumstances, your vehicles and the level of cover you choose.
As you have a clean driving record as well as good credit you may well benefit from what insurance companies call preferred driver rates. This would allow you to take advantage of additional discounts on top of those already due to you for insuring a pleasure vehicle with low mileage.
As a driver who poses minimal risk and keeps payments up to date you are just the type of customer insurance companies dream about. With continual insurance cover for many years and no claims, you will be offered the best rates available from most insurers.
There is the possibility you will lose out on a renewal discount with your present provider, but this may be compensated by your new insurer in the form of a transfer reward.
There are other options available to you.
You can obtain very reasonable rates by insuring your car with a speciality insurer on a policy called an agreed-value policy. This may be appropriate for a vehicle that is very old that has sentimental value. A policy of this type is generally for vehicles that are driven on rare occasions. (See "Insuring your keepsake car.")
Alternatively you could opt for a pay-as-you-drive (PAYD) car insurance program.
A device will be fitted to your vehicle to monitor your driving habits. How often you drive? The time of day you use your vehicle, and you brake and accelerate. If the results prove you to be a driver who presents minimal risk, you could receive discounts of up to 45 percent with some insurance providers.
Many people stick with the same insurer year on year because they are afraid switch. Some think it is more trouble than it is worth, some feel they should stay loyal to one company. When it comes to insurance loyalty rarely pays off. It is unlikely your current insurer is offering you their best possible deals. Shopping around will undoubtedly pay off.
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