Annual mileage guide: Why it pays to be accurate
Annual mileage is something that affects your insurance premium, maintenance costs and, when it comes to car finance, your monthly payments too.
This is because a car’s residual value is inherently linked to its mileage; a car that has covered only 24,000 miles (8,000 per year) after three years will usually be worth more than if it had travelled 45,000 miles (15,000 per year) over the same period.
As such, it’s important to consider how many miles you drive before you take out any form of finance, whether it be a personal contract hire or personal contract purchase. When it comes to choosing a rental profile, mileage is one of the factors that effects your monthly payments.
How many miles do people really drive?
Overestimate, and your monthly payments will cost you more than they should. On the other hand, it’s worth keeping in mind that you may have to pay more at the end of your contract if you underestimate your mileage. Either way, you should always try and be as accurate as possible.
With record numbers of cars on the road and seemingly endless traffic jams, you may assume that average mileage in the UK has risen, but it’s actually fallen.
Figures from the government’s latest National Travel Survey showed motorists drove an average of 7,900 miles per year in 2013, compared to 9,200 miles back in 2002 – that’s a drop of 14%.
Which rental profile is best for you?
Data from our 2016 leasing report shows that almost half (49.5%) of enquiries are for deals with a 10,000 p/a limit. 37.5% of enquiries are for deals with 8,000, while just 13% of enquiries are for deals of 12,000 miles a year and above.
Something worth consideration is that lease companies set mileage allowances by year, not by contract length. For example, if you plan to take our a three-year, 10k p/a lease, you’ll be able to drive 30,000 without worrying about additional costs at the end of the contract.
If we use the national average of 7,900 as a baseline then, there must be some people opting for 10,000 miles that really only need an 8,000 mile per-year deal.
The best way to calculate your mileage
So, the UK’s average mileage stands at less than 8,000 per year, but our figures suggest people round up to 10,000 when that’s not really necessary. So, what’s the best way to calculate your yearly mile count?
When you renew your insurance policy you are asked to state your approximate average mileage, so you may already have an idea. If you’re not sure however, the table below will give you a rough idea of what deal profile corresponds to your mileage: