Jerry 2025 State of the American Driver Report: Soaring Costs Push Drivers to Reevaluate Insurance, Car Buying, and Household Budgets

New report finds 80% of Americans now consider car insurance unaffordable, leading to widespread coverage trade-offs, altered car buying plans and tightened household budgets 

PALO ALTO, Calif., Jan. 2, 2025 /PRNewswire/ -- Jerry, America's AllCar™ app, today releases the findings from its fourth-annual State of the American Driver Report, revealing how rising car ownership costs are tightening household budgets and shifting planned 2025 spending. The report offers insights into how Americans are reacting to this prolonged era of sky-high-cost car ownership, including their outlook on car buying, views on electric vehicles (EVs) and hybrids, ability to afford insurance and repairs, and attitudes toward AI driving technology and data collection.

The 2025 State of the American Driver Report analyzes results from a national survey of 1,000 American drivers across all age groups and regions of the country, combined with internal research on topics including insurance rates, inflation, and data-collection attitudes. Jerry found that American drivers are feeling the pressure financially and are making a number of adjustments to offset these elevated ownership costs, including:

• Coverage Trade-Offs: A majority (55%) of drivers shopped around for car insurance in search of relief from soaring rates in the past 12 months, up from 38% a year ago. More than one in five (22%) say they have switched insurers to take advantage of lower rates when they find them in the previous year. More than a quarter (27%) chose a higher deductible in return for a lower rate, while 26% reduced their coverage.
• Impacts Across Income Levels: The cost of car insurance has forced people to cut spending elsewhere, including on family vacations (32% of respondents), clothing (30%) and groceries (26%). Nearly half (49%) of high-income earners—making over $129,000 annually—shopped around for better deals in the last year and 53% settled for less coverage than they thought they might need.
• Feeling Overcharged: No type of bill generates more distrust, confusion and frustration than car repair and maintenance bills. Not even medical bills. Three-fourths of drivers (76%) said they definitely or probably have been overcharged for a repair job or maintenance work, while only 1.5% said they definitely had not, 5.5% said probably not.
• Shifting Car Buying Plans: Of those planning to buy or lease a new or used car in 2025, more than one in five (22%) said they previously would have bought a new car but now they'll consider a lightly used one due to higher prices for new vehicles. Naturally, insurance rates are on their minds, with 71% saying they consider the cost of car insurance when choosing a vehicle. That includes 85% of Gen Z and 75% of Gen X.
• The Year of the Hybrid, Again: For the second consecutive year, more than 8 in 10 people (83%) said if given a choice of two identical vehicles at the same price—a hybrid that does not require charging, and an EV that does—they would choose the hybrid.
• AI Trust-Building Required: Only 6.6% said they had a high level of trust and 35% reported a moderate level of trust that safety features—such as collision avoidance and blind spot monitoring– would perform effectively in high-risk situations. 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."

For some, high costs meant simply going uninsured. Nearly one in 10 (9.7%) American drivers said they went uninsured for "at least a while" in the previous year because they were unable to keep up with their premiums. But there are other, safer ways to save. Drivers who use Jerry to buy car insurance save, on average, more than $600 a year.^*

Josh Damico, Jerry's Vice President of Insurance Operations, shares his predictions on what's in store for drivers this year. "2025 is poised to be a year of stabilization for car insurance rates. While small rate increases of 2-3% are expected as the market returns to normal, this is a welcome shift after the 50% rise in rates over the last three years. It is a sign of the market regaining balance and the ideal time for American drivers to explore new car insurance options."

Jerry also offers many additional services designed to make car ownership more affordable and accessible for all American drivers, including budget-friendly loan options, repair cost comparison tools, and rewards for safe driving. To learn more or get started, please visit jerry.ai. To review the full report, click here.

About Jerry: Jerry is America's AllCar™ app. Packed with features designed to eliminate car ownership frustrations, Jerry uses AI to bring peace of mind to car owners everywhere. Jerry helps 5 million U.S. customers find shockingly good insurance rates fast, refinance car loans with ease, track their driving score to stay safe on the road, and learn fair maintenance and repair costs. To learn more or get started, visit jerry.ai or download the Jerry app in the App Store or Google Play.

Methodology: Jerry's 2025 State of the American Driver report is based on data from a nationally representative survey of 1,000 people conducted in November 2024 using a platform and audience from Pollfish. Results include only respondents who own or lease a vehicle and drive at least once a week, and are blended for age, gender and region. More information about Pollfish and its audiences can be found on its website. Inflation figures are based on data from the U.S. Bureau of Labor Statistics. Data on EV charging stations comes from the U.S. Department of Energy.

^*Not all customers find savings. Savings depend on state, policy features, coverage, driving history and other factors.

SOURCE Jerry