A Quarter of Americans Spend Over 15% of Take-Home Pay on Monthly Car Payments; Two-Thirds of Drivers Report Rising Auto Expenses Force Them to Cut Spending Elsewhere
Jerry’s 2023 State of the American Driver Report analyzes results from 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 confirm that rising car costs forced them to cut spending in other categories, including groceries, restaurants, clothing, entertainment and vacations.
A whopping 24% of drivers expect to shop for a car in 2023, and a majority (61%) of those who plan to shop remain loyal to traditional dealerships versus online retailers. Nearly half (49%) of American drivers are interested in buying or leasing an electric vehicle as their next car, a 10% jump from last year motivated mainly by the record high gas prices they paid in 2022. Meanwhile, the slight majority cite concerns over inconvenience of charging and high vehicle prices as their primary reason to stick with gas-powered vehicles.
Key report findings include:
“The disruption we’re experiencing in the car market is likely to continue for at least another year or two,” says Henry Hoenig, Jerry data journalist and study author. “Supply-chain problems that have hit vehicle production are not fully resolved and the supply of newer used vehicles likely won’t return to normal until at least 2025. This means used-car prices will probably remain elevated, even if they fall somewhat from the recent highs. There’s never been more need or demand for Americans to find savings on all their car expenses.”
While nearly a quarter of Americans report spending more than 15% of their household’s monthly after-tax income on their monthly car payment – before accounting for insurance, gas, repairs, or maintenance – ways to save do still exist. The Jerry app saves both time and money on car expenses. Customers who use Jerry to buy car insurance save, on average, more than $800 a year. Customers who refinance their car loan with Jerry, on average, reduce their monthly payment by $134.
“One of the easiest ways to find savings on some of your larger car expenses, like insurance, is to shop around. Our survey shows that more than half of Americans simply never do,” Hoenig added. “Shopping for insurance isn’t nearly as antiquated and complex as it once was. Those past, negative experiences are most likely what’s been stopping them. We’ve rebuilt the customer experience from the ground up to do virtually all the work for customers, for free, and in minutes. The savings potential is out there and we hope that what we do makes an even more meaningful difference in many American’s lives right now.”
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 using 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 for age, gender and state. More information about Pollfish and its audiences can be found on its website.