Elevated car ownership costs are forcing drivers to rethink every mile

For many over the past few years — owning a car has felt like an uphill battle. Insurance premiums skyrocketed in just three years, repair costs climbed even higher, and while car prices dipped slightly, they remain above pre-pandemic levels. Basically, driving has become an expensive necessity.

By the numbers:

• Over the past three years, insurance rates have jumped 50%. 8 in 10 drivers say coverage is unaffordable and nearly 1 in 10 drivers went uninsured temporarily last year. 

• Repair costs are up 41% since 2022, with 33% of drivers unable to cover a $1,000 repair. Meanwhile, trust in mechanics is low, with 76% believing they’ve been overcharged and 57% convinced they’ve paid for unnecessary work.

• Used car prices came down again in 2024, but they’re still 30% higher than 2019, while new car prices are up about 20% in the same period.

Why it matters: Owning a car isn’t just about getting from A to B — it’s a lifeline for most Americans. But the reality is the industry will likely never return to pre-pandemic prices. So — drivers are being forced to make hard choices: skipping repairs, cutting insurance coverage, or delaying purchases altogether. 

But – Jerry’s State of the American Driver report suggests that 2025 might offer a bit of a reprieve:

• Average insurance rate increases are expected to land between 2%-3%, far below the surge in recent years.

• Borrowing could become more affordable as the Federal Reserve signals potential rate reductions.

• Though still high, used car prices are forecasted to continue trending downward, offering relief for cash-strapped buyers.

Still — a lot can happen over the course of a year and consumers are adapting the conditions they are facing right now.

• To lower premiums — 27% of consumers raised deductibles, and 26% reduced coverage – often below what’s sufficient in a serious accident.

• Of the 40% of consumers planning to buy or lease this year — 22% are moving from new to lightly used vehicles — prioritizing affordability over preference.

• Another 24% of Americans want to buy but are holding off for lower prices, reduced interest rates, or potential policy changes like tax-deductible car loan interest proposed by President-elect Trump.

Bottom line: 2025 may bring a breather, but the road ahead is still expensive. How long can Americans keep adapting to a “new normal” before their car buying behaviors change for good?

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