A recent report showed how rising car ownership costs are impacting household budgets and shifting planned 2025 spending.
The 2025 State of the American Driver Report, based on a survey of 1,000 drivers, highlighted how people are reacting to the high costs of car ownership. The report covered various topics, including car buying outlooks, views on electric vehicles and hybrids, insurance affordability, repair costs and attitudes toward AI driving technology and data collection.
Drivers are feeling the financial pressure and making adjustments to cope with elevated ownership costs. A majority of drivers (55 per cent) shopped around for car insurance in the past 12 months, up from 38 per cent a year ago. More than one in five (22 per cent) switched insurers to find lower rates, while 27 per cent chose higher deductibles and 26 per cent reduced their coverage.
The cost of car insurance has forced people to cut spending in other areas, including family vacations (32 per cent), clothing (30 per cent), and groceries (26 per cent). Nearly half of high-income earners (49 per cent) shopped around for better deals, and 53 per cent settled for less coverage than they thought they might need.
Car repair and maintenance bills generate more distrust, confusion and frustration than any other type of bill. Three-fourths of drivers (76 per cent) believe they have been overcharged for repairs or maintenance work.
For those planning to buy or lease a car in 2025, more than one in five (22 per cent) said they would now consider a lightly used car instead of a new one due to higher prices. Insurance rates are a significant factor, with 71 per cent considering the cost of car insurance when choosing a vehicle. This includes 85 per cent of Gen Z and 75 per cent of Gen X.
For the second consecutive year, more than eight in ten people (83 per cent) said they would choose a hybrid over an EV if given a choice between two identical vehicles at the same price.
Trust in AI driving technology remains low, with only 6.6 per cent of respondents having a high level of trust in safety features like collision avoidance and blind spot monitoring. One in four said they had “no trust” at all.
“Car insurance is more than just another expense—it’s become a financial stressor reshaping how people approach broader buying decisions,” says Jerry CEO and co-founder Art Agrawal. “Drivers are reducing coverage, raising deductibles, and switching insurers to combat these elevated costs. Many are even forgoing vacations, new clothes, and groceries to better manage budgets. It’s a reality that our team is committed to changing for good with our mission to make car ownership affordable and accessible.”
Image credit: Depositphotos.com
Leave a Reply