A quarter of Americans spend over 15% of their net income on monthly car payments; Two-thirds of drivers report rising car costs, forcing them to cut spending elsewhere
PALO ALTO, California, January 4, 2023 /PRNewswire/ — Jerrythe super app for drivers, today publishes the findings from their 2023 State of the American Drivers Report, his second-year study that provides a comprehensive, data-backed look at the current state of car ownership experiences. It reveals the full extent of the financial strain American car owners are facing and breaks down their changing pandemic-era buying patterns.
Jerry’s 2023 State of the American Driver Report analyzes the results of a national survey of more than 1,200 American drivers across all 50 states and four generations – Gen Z, Millennials, Gen X and Boomers. Two-thirds of respondents agree that rising car costs have forced them to cut spending in other categories, including groceries, restaurants, clothing, entertainment and vacations.
A whopping 24% of drivers expect to buy a car in 2023, and a majority (61%) of those planning to buy remain loyal to traditional dealers versus online dealers. Nearly half (49%) of American drivers are interested in buying or leasing an electric vehicle as their next car, a 10% year-over-year increase largely motivated by the record-high gas prices they paid in 2022. Meanwhile, a slim majority express concerns about charging inconvenience and high vehicle prices as the main reason to stick with gas-powered vehicles.
Key findings of the report include:
- Buyers don’t get what they actually want – A third of surveyed drivers who bought a vehicle in 2022 said they ended up buying a used one instead of a new one due to limited supply. A quarter said they bought a brand or model that was not their first choice.
- High prices and interest rates are a burden on purchasing plans for 2023 – About a quarter of drivers said they plan to buy a new or used vehicle in 2023, similar to last year. About half of those surveyed said they had no intention of buying a new vehicle at all, and others said lower prices and interest rates would change their minds.
- Unhealthy amounts of household income migrate to car expenses – Almost a quarter of American drivers spend more than 15% of their net wages on car payments. About two-thirds said the cost of owning a car will force them to cut spending elsewhere in 2022. A quarter said they cut back on groceries, while nearly a third spent less on family vacations.
- Insurance costs are rising, but policyholders are not acting – Rising auto insurance premiums forced nearly a quarter of Americans to buy less coverage than they wanted in 2022. Still, 63% weren’t looking for better deals.
- High gasoline prices are fueling increased interest in electric vehicles – After a year in which gasoline prices hit record highs, nearly half (49%) of American drivers said they are interested in buying an electric vehicle as their next vehicle, up from 39% in 2021. Most common will be reason for their interest in electric vehicles, which is still mentioned when it comes to saving fuel.
- The fondness for Tesla could be waning – Tesla remains the top choice for EVs among American drivers, but about two-thirds say another brand would now be their top choice. Ford, Chevrolet and Hyundai are the top picks after Tesla.
- Die-hard ICE buyers stay – Still, a slim majority of Americans (51%) say they are not interested in buying or leasing an electric vehicle for their next vehicle, citing the inconvenience of charging and high vehicle prices as the top reasons.
- The streets are more dangerous – Nearly a third of Americans say driving has become more dangerous since COVID. In 2022, almost 1 in 5 people witnessed a driver get out of their car to confront someone in another vehicle. One in five men and almost one in ten women state that they sometimes have a loaded pistol within reach when driving.
“The disruption we’re seeing in the auto market is likely to continue for at least a year or two,” he says Heinrich Hoenig, Jerry Data journalist and study author. “Supply chain issues that have impacted vehicle production are not yet fully resolved, and the supply of newer used vehicles is unlikely to return to normal until at least 2025. This means used car prices are likely to remain high even if they fall somewhat from recent highs. There has never been a more need or demand for Americans to find savings on all of their auto expenses.
While nearly a quarter of Americans report that they spend more than 15% of their household’s monthly after-tax income on their monthly car payment — before accounting for insurance, gas, repairs or maintenance — there are still opportunities to save. The Jerry app saves time and money on car expenses. On average, customers who buy auto insurance with Jerry save more than $800 a year. On average, customers who refinance their car loan with Jerry reduce their monthly payment by $134.
“One of the easiest ways to find savings on some of your larger auto expenses, like insurance, is to shop around. Our survey shows that more than half of Americans simply never do,” Hoenig added. “Insurance shopping is nowhere near as antiquated and complex as it used to be. These negative past experiences have most likely put them off. We’ve rebuilt the customer experience from the ground up to do virtually all of the work for customers. for free and in a few minutes. The savings potential is out there, and we hope what we’re doing is making an even more meaningful difference in the lives of many Americans right now.”
The report was published on January 4th along with Jerry Chief Financial Officer Ed Chungs Participation in the Acxiom “Innovations in data about people“Blackboard at 10 a.m. PT in Las Vegas West Hall of the Convention Center, Room W219, during CES 2023.
The Jerry app offers many additional money-saving car ownership services. To learn more, visit getjerry.com. To view the full report, click here.
Methodology: Jerry’s 2023 State of the American Driver Report is based on data from a nationally representative survey of 1,257 respondents conducted in November 2022 with a platform and audience from Pollfish. Results were filtered to include only respondents who own or lease a vehicle and drive regularly, and were blended by age, gender, and country. For more information about Pollfish and its audience, visit its website.
About Jerry: Jerry saves you time and money on your car expenses. Jerry first launched its AI and machine learning powered auto insurance comparison service in 2019 and today serves more than 3 million customers as a licensed insurance broker and authorized auto refinance provider. For more information on how to save money on car insurance or reduce monthly car loan payments by refinancing, visit getjerry.com or download the Jerry app on app store or google play.