Vehicle Ownership Stresses Americans as Costs Rise

One in 4 vehicle owners worry fuel costs will impact their ability to pay other bills, according to NerdWallet’s 2023 Auto Buying and Insurance Report.
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Written by Andrew Marder
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Sales of new automobiles dropped in 2022, but Americans are still buying. With the price of cars, gas and electricity rising, the total cost of owning a car is starting to put some drivers in a bind. A new consumer study commissioned by NerdWallet and conducted online by The Harris Poll finds that 1 in 4 (25%) vehicle owners — defined as those who have a personal vehicle — worry that the price of fueling or charging their vehicle will impact their ability to pay for other necessary goods or services.

Key takeaways

  • Around 1 in 4 (26%) vehicle owners say vehicle expenses make up a significant percentage of their monthly budgets.

  • One in 4 (25%) vehicle owners say they worry the price of fueling or charging their vehicle will impact their ability to pay for other necessary goods or services.

  • Only about a quarter (26%) of vehicle owners shop for auto insurance once a year or more often.

  • One in 5 (20%) Gen Z (ages 18-26) vehicle owners say they spend $1,000 or more on their vehicles each month.

Purchase plans

With over 4 million miles of public roads nationwide, America is a car-ecstatic country. In fact, our survey found that 51% of American vehicle owners think the vehicle they own or lease says a lot about who they are.

About half of Americans (53%) say they plan to buy or lease a personal vehicle in the next 12 months, the survey found. Of those potential buyers/leasers, 48% plan to buy/lease a used car, while 68% say they'll buy/lease a new car (some may plan to buy/lease more than one car).

Among future purchasers/leasers, traditionally fueled vehicles lead the way, with 70% planning to purchase/lease a gas- or diesel-fueled vehicle, according to the survey. Just under 4 in 10 (37%) plan to purchase/lease a hybrid vehicle, and about 3 in 10 (31%) plan to purchase/lease an electric vehicle, or EV. Millennials (ages 27-42) are more likely than their older counterparts to be planning to purchase an EV at 38%. That's compared with 29% of Gen Xers (ages 43-58) and 14% of baby boomers (ages 59-77).

Of those who plan to purchase/lease a vehicle in the next 12 months, 6 in 10 (60%) plan to purchase through a dealership, the most popular option. Online dealerships are included in a fifth (20%) of buying plans.

Cost of ownership

The cost of car ownership can take a toll on Americans' budgets. Around 1 in 4 (26%) vehicle owners say vehicle expenses make up a significant percentage of their monthly budgets. One key factor is rising gasoline prices. According to the U.S. Energy Information Administration, gas prices hit $4.06 per gallon in 2022 on average nationwide, an 51% increase over its pre-pandemic, 2019 price of $2.69 per gallon.

Our survey found that the average monthly cost of vehicle ownership, including vehicle payments, upkeep, gas and insurance, is $556. The average American household monthly income is $4,537 after state and federal taxes (calculated with Maryland state taxes) and withholdings have been taken out. That means vehicle costs alone could eat up 12% of a household's monthly take-home pay.

Among vehicle owners, younger generations spend more outright on their monthly auto expenses than older generations do, according to the survey. The average Gen Z monthly vehicle costs come in at $921, while millennials spend $821. Those are higher than that of Gen Xers and baby boomers, who spend an average of $433 and $308 per month, respectively.

When it comes to their tolerance for auto costs, 43% of vehicle owners say a $1,000 or more monthly bill for an auto loan is too high for them, the survey found. Even so, once you add in fuel, maintenance and insurance, 10% of owners have total monthly vehicle expenses of $1,000 or higher. Gen Z and millennial vehicle owners are more likely than their older counterparts to say they spend $1,000 or more on their vehicles each month (20% and 18%, respectively, compared with 6% of Gen Xers and 3% of baby boomers).

“A car’s out-the-door price includes the price of the vehicle as well as any taxes, fees or extras, like warranties or gap insurance,” says Shannon Bradley, an autos writer at NerdWallet. “When car buyers focus on the out-the-door price instead of only a monthly payment, it gives them a clearer picture of the total cost they are agreeing to pay or finance.”

Stress around costs

Those bills don't just eat away at bank accounts — they generate stress and concern, too. One in 4 (25%) vehicle owners say they worry the price of fueling or charging their vehicle will impact their ability to pay for other necessary goods or services, such as rent, groceries and utilities, the survey found.

That's causing concern for many, and 23% of vehicle owners say the cost of vehicle ownership causes them stress. Baby boomers are the least likely to feel that weight, with 14% feeling stressed by their vehicle costs, compared with 28% of Gen Z owners, 30% of millennial owners and 25% of Gen X owners.

Consumer tips

There are many ways to cut down on the cost of owning and buying a car. For instance, you can get preapproved for an auto loan before approaching a dealership, which gives you more bargaining power when shopping.

“When car buyers accept the first loan and rate they’re offered, often at the dealership, they never know if they could have qualified for a lower rate,” Bradley says. “It’s always a good idea to shop and compare rates with several lenders. Take the lowest rate to the dealership, giving them a baseline to beat.”

Auto loan refinancing is an option for those who have a high-rate loan. If they find the right interest rate and loan terms, they could save hundreds or thousands of dollars over the life of the loan.

If you want to save on gas, you could switch to an EV. A NerdWallet analysis of a 2022 study from AAA found that a year of gas for a car costs $1,500 more than a year of electricity to power an EV. Depending on the cost of a vehicle and the price of electricity in your area, switching to an EV could save you hundreds on your total vehicle costs every year, unless a larger loan or lease payment offsets the fuel savings.


According to a NerdWallet analysis of auto insurance rates, the average driver pays $179 per month for full coverage insurance, which includes liability, uninsured motorist, comprehensive and collision coverages. That rate drops to an average of $57 per month for the minimum coverage required by state laws.

In our survey, we found almost 3 in 5 (57%) car owners are satisfied with their current auto insurance provider. Baby boomers (78%) are most likely to be currently satisfied with their insurance. That's more than satisfaction among Gen Z, millennial and Gen X owners, at 28%, 43% and 57%, respectively.

Although not all are satisfied with their auto insurance provider, most vehicle owners aren't regular shoppers. Around a quarter (26%) of vehicle owners shop for insurance once a year or more. “Shopping around and comparing car insurance quotes is the absolute best way to get the cheapest rate you can,” says Ben Moore, an insurance authority at NerdWallet. “And it’s easier than ever. Most insurer websites let potential customers get an instant quote, while online comparison sites can pull quotes from multiple companies for you.”

Many Americans understand that shopping around can save money. Just over 3 in 5 (63%) say it's true that you can save money by switching auto insurance providers, the survey found.

Insurance beliefs

When we asked Americans about auto insurance, most (66%) knew that a person’s credit scores affect the cost of their auto insurance. In fact, having a poor credit score can have more impact on a driver's auto insurance rate than having a DUI does. Four states — California, Hawaii, Massachusetts and Michigan — bar insurance companies from using credit scores to set rates.

When it comes to shopping for auto insurance policies, about half of Gen Zers and millennials (50% and 54%, respectively) say the best time to shop is when buying/leasing a vehicle, according to the survey. 

“The best time to shop for new car insurance is right after you’ve filed a claim or received a traffic violation, since rates will likely increase with your current insurer. But all drivers should consider shopping around now for a new policy because insurance rates are expected to rise across the country this year," Moore says. “Just be aware of what discounts you may be getting from a potential new insurer. Many companies offer steep discounts to new customers, but these savings might drop off at renewal, leaving you with a higher rate.”

About 4 in 10 (41%) Americans say their state's minimum auto insurance coverage is enough for them, the survey found. State minimums have liability coverage requirements but not comprehensive or collision coverage requirements. With the state minimums only, drivers won't be covered by their insurance companies for damage done to their cars, including by fire, storms or other events unrelated to driving.

Consumer tips

Regularly comparing insurance rates isn't the only way to ensure you're getting the best deal. Drivers may find ways to bundle homeowners and auto insurance policies to get more savings or may find lowering optional coverages can help save money.

It's also important to know what you're covered for. Just getting the minimum legal coverage can leave holes in your insurance plan. For instance, you wouldn’t have coverage for your own car if you backed into a telephone pole. That insurance would come with collision coverage, which isn't required by state minimums.

This survey was conducted online within the United States by The Harris Poll on behalf of NerdWallet from Jan. 31-Feb. 2, 2023, among 2,060 U.S. adults 18 and older, among whom 1,781 have a personal vehicle. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.8 percentage points using a 95% confidence level. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact .


NerdWallet disclaims, expressly and impliedly, all warranties of any kind, including those of merchantability and fitness for a particular purpose or whether the article’s information is accurate, reliable or free of errors. Use or reliance on this information is at your own risk, and its completeness and accuracy are not guaranteed. The contents in this article should not be relied upon or associated with the future performance of NerdWallet or any of its affiliates or subsidiaries. Statements that are not historical facts are forward-looking statements that involve risks and uncertainties as indicated by words such as “believes,” “expects,” “estimates,” “may,” “will,” “should” or “anticipates” or similar expressions. These forward-looking statements may materially differ from NerdWallet’s presentation of information to analysts and its actual operational and financial results.

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