Executive summary
More than half of American drivers (52%) have cut spending in at least one household category to afford car insurance, according to a new survey commissioned by Jerry. Nearly one in five (19%) has cut back on groceries. One in 10 (10%) has trimmed healthcare spending. And nearly one in seven (14%), roughly 32 million people when extrapolated to the national driver population, has reduced or paused retirement savings to cover the insurance bill. The squeeze reaches well up the income ladder — even among households earning more than $150,000, 44% have cut spending somewhere to absorb the cost.
Premiums are still climbing in 2026, just at a gentler pace. Motor vehicle insurance prices rose nearly 6% year-over-year, according to the Bureau of Labor Statistics. That is down from the 20% peak of June 2023, but still ahead of the usual 3% to 4%, and it sits on top of premiums that have already jumped about 50% since 2020. Repair costs have followed the same path. Parts and labor kept rising through 2025, and fresh tariffs on imported vehicles and parts are creating new worries for 2026.
Drivers have responded similar to how they did in recent years. They shop around, switch carriers, raise deductibles and cut coverage. What’s new is how far these shifts go. Spending categories that drivers once treated as fixed, including food, healthcare and retirement contributions, are now getting cut to make room for the premium.
Several other themes run through this year’s data.
Acceptance of telematics is now widespread and most drivers no longer object to being monitored behind the wheel. But willingness skews toward higher-risk drivers, with the ones most willing to be tracked being those with at-fault accidents on their record. It is a pattern that raises questions for usage-based insurance, which was built to reward safe driving, not attract the riskiest customers.
If telematics is data drivers choose to share, much of it is now leaving their cars without their knowledge. Many modern vehicles track how their owners drive and pass that information to outside companies, including data brokers and insurers. The practice gained attention in January 2026, when the Federal Trade Commission ordered General Motors and its OnStar service to stop selling driver data without consent. Yet 44% of drivers, including 57% of Boomers, did not know their vehicle shared data with third parties at all. Extrapolated nationally, that is roughly 113 million Americans.
When it comes to new car purchases, there are two forces shaping buying behavior. The first is a clear preference for hybrids over EVs. Given identical vehicles and price, 70% would choose the hybrid, and that holds across every age group, with even Gen Z favoring hybrids 2-to-1. The second is tariffs. 79% of drivers expect tariffs to raise car-related costs over the next 12 months, and more than a third have already changed their vehicle plans as a result, including 7% who are buying sooner to get ahead of the increases.
The Jerry 2026 State of the American Driver report draws on a survey of 1,500 American adults (1,494 after quality screening), all of whom own or lease a vehicle, conducted in May 2026. It also incorporates internal Jerry research and external data on insurance rates, inflation and the rules governing connected-vehicle data.
Jerry is a licensed insurance broker in all 50 states, trusted by more than 5 million drivers. Think of us as a proactive assistant for the tedious parts of car ownership. We compare real quotes from 100+ top insurers in minutes, find the discount you qualify for, and handle the switch for you, paperwork included. It is free to compare quotes, and we never share or sell your data for marketing purposes, so no spam calls after you quote. And because we work with 100+ insurers, we have no reason to favor one over another, only to show you the options that fit your needs and budget. Our editorial team works independently of the rest of the business, so this report reflects what the data shows, not what sells.
Key insights
- Just under half of American drivers (49%) say car insurance is not affordable for the average American. Higher earners are no more convinced. Even among households earning $150,000 or more, 49% say the same.
- More than half of drivers (52%) have cut spending in at least one household category because of car insurance costs. Those cuts span dining out (36%), family vacations (26%), clothing (25%), groceries (19%), retirement savings or investments (14%), and healthcare (10%). The pattern is not limited to lower earners. Among households making $150,000 or more, 44% have cut somewhere as well.
- One in five drivers (21%) reduced their car insurance coverage in the past 12 months. Two-thirds (66%) now feel they have less protection than they need, 45% have already encountered a situation in which they wished they had more, and only 5% plan to keep the reduced coverage going forward.
- More than half of drivers (53%) shopped for a lower rate in the past year, and 31% switched providers to get one. A renewal rate increase was the most-cited reason for leaving a previous insurer, named by 27% of all drivers, slightly ahead of finding a lower rate elsewhere (24%).
- At some point in the past year, 7% of drivers went without car insurance because they could not afford the premium, roughly 17 million Americans when applied to the national driver population. Another 2% had something happen to their vehicle but chose not to file a claim, out of fear of a rate increase.
- Most drivers (60%) would consider letting their insurer electronically monitor their driving in exchange for a lower rate, essentially unchanged from last year. That willingness runs highest among drivers with the worst records. Among those with an at-fault accident in the past three years, 85% would allow monitoring, compared with 55% of clean-record drivers.
- More than half of drivers (55%) would consider leaving an insurer that required monitoring as a condition of coverage. Drivers draw a sharp line between choosing monitoring and having it imposed.
- Many drivers (44%) had no idea automakers were collecting and sharing data about their vehicle, location, and behavior with third parties. Among Boomers, that figure rises to 57%.
- Given two identical vehicles at the same price, 70% of drivers would choose a hybrid over an EV. Only 14% would choose the EV, and 54% say they have no plans to buy an EV at all.
- Most drivers (79%) expect tariffs to raise car-related costs in the next 12 months, and 36% have already changed their vehicle plans as a result, including 7% buying sooner than planned to get ahead of anticipated increases.
Drivers are cutting household spending to afford car insurance
52% have cut at least one spending category to afford insurance, including groceries, retirement savings, and healthcare
Car insurance costs have risen for a fifth consecutive year. The pace slowed in 2025, after the double-digit increases of 2023 and 2024, but the cumulative rise of recent years continues to weigh on household budgets and influence how drivers spend.
Drivers are divided on whether the cost is affordable. Nearly half (49%) say car insurance is not affordable for the average person, while 43% say it is. That division shows up in behavior as well, with roughly half of all drivers (52%) have reduced spending in at least one household category to afford their car insurance.
Non-essential categories top the list, but more and more, drivers are cutting into necessities. They are scaling back on groceries, healthcare, and retirement savings, the kind of spending that households usually protect. Extrapolated to the national driver population, this means that roughly 45 million people are cutting back on groceries to afford car insurance, about 32 million are reducing or pausing retirement contributions, and around 22 million are cutting healthcare spending.
The effect extends well up the income scale, with higher earners reducing spending nearly as often as lower earners.
Income offers less protection than might be expected. Even among households earning more than $150,000, 44% have reduced spending because of car insurance. Costs have risen steadily enough, and for long enough, that even drivers with a financial cushion are adjusting their budgets around the expense.
The effect is most pronounced among parents. Drivers with a minor child at home reduced spending at a far higher rate than those without: 66% versus 46%. The gap isn’t a function of parents simply being younger: it holds even when comparing parents and non-parents of the same age. The likelier explanation is financial pressure. Households raising children tend to run tighter budgets, which leaves less room to absorb a rising premium.
Drivers are shopping, switching and trading down to keep car insurance costs manageable
Drivers are reaching for the same cost-cutting measures they always have. They shop the market, switch carriers, raise deductibles and trim coverage. What changed this year is how many drivers are now doing it. While shopping stayed about flat at 53% vs 55% a year ago, far more drivers followed through and actually switched: 31% changed providers for a lower rate, up from 22% the year before.
Beyond switching, drivers are pulling other levers to bring the bill down, and some of those trade-offs come at a cost.
- 27% raised their deductible in exchange for a lower premium
- 21% bought less coverage than before, and most now regret it. Two-thirds say they have less protection than they need, and 45% have already faced a moment when they wished they had more
How long a driver has stayed with an insurer also shapes how hard they shop around for a better deal. In the first year, 88% of drivers shopped the market. By the 10-years mark (or later), only 27% did. Much of that is inertia; 39% say they have stayed with their current insurer simply because they have been there for years and never switched.
For a smaller group, the question is no longer how to lower the premium but whether to pay it at all. About 7% of drivers went without insurance at some point in the past year because they could not afford coverage, roughly 17 million people when extrapolated to the driving population. Another 2% had damage to their vehicle and chose not to file a claim, worried about what it would do to their rate. That is about 6 million drivers absorbing a loss out of pocket to protect their renewal price.
The hidden cost of cutting car insurance coverage, and why it can backfire
Of those who cut coverage, 66% now feel underprotected and 45% already wish they’d kept more
Drivers who cut coverage were far more likely to have had a vehicle incident. Among those who reduced coverage in the past year, 50% had an incident in that same period, compared with just 12% of drivers who kept their coverage the same.
The link is almost certainly not that cutting coverage leads to crashes, and the more likely explanation has to do with who reduces coverage in the first place. Drivers facing higher premiums, including those with accidents on their records, have the most reason to trim what they pay for, which means the group that cuts coverage already skews toward higher risk.
Whatever the reason for the cut, most of these drivers are not comfortable with where it left them. Only 5% say they plan to keep their reduced coverage going forward. 45% have already hit a situation where they wished they had kept their old coverage, and another 26% have not faced that yet but worry their coverage will fall short when they do. Together, that means 71% of drivers who reduced coverage either regret the change or feel uneasy about it.
The drivers most eager open to telematics have the worst records
60% would allow monitoring for a discount, but 55% would consider leaving an insurer that required it
Overall willingness to have one’s driving monitored is flat year-over-year (60%), but it splits sharply by driving record. The drivers most open to telematics have the worst recent records.
Economic factors are the most likely reason there’s a 30-point gap between drivers with a clean record and those with an at-fault accident. Drivers with a recent ticket or accident have already absorbed a rate increase, and telematics offers a way to win some of it back, whereas a clean-record driver has more to lose from one bad week than to gain from a discount.
This raises a question about selection in usage-based pricing. The usual case for telematics is that it rewards safe drivers. However, Jerry’s data points the other way, with higher-risk drivers among the most willing to opt in. Whether this reflects adverse selection or telematics working as intended is something only insurers’ loss data can answer.
Openness towards telematics also falls steadily by generation. As many as 76% of Gen Z would allow monitoring, along with 73% of Millennials, but only 57% of Gen X and 49% of Boomers feel the same way.
Consent, though, is the hard line. Of drivers, 60% would accept monitoring in exchange for a discount, but 55% would consider leaving an insurer that required it as a condition of coverage. Drivers accept monitoring when it is their choice and resist it when it is mandatory.
The same holds when the data is taken without their consent. Nearly half of drivers (49%) would be uncomfortable if an insurer pulled their driving data from an outside source without an explicit opt-in, and most of them strongly so. Meanwhile, only 21% would be comfortable.
Automaker data collection is the privacy issue most drivers don’t know about
In January 2026, the FTC finalized an order against General Motors and its OnStar subsidiary, barring the company for five years from sharing geolocation and driving-behavior data with consumer reporting agencies, the data brokers that had been supplying it to auto insurers. The complaint, first filed in January 2025, alleged that GM used a misleading enrollment process to sign drivers up for its OnStar Smart Driver feature without clearly disclosing that the system collected detailed location and driving data, which GM then sold to third parties without informed consent.
Drivers come down hard against the practice. Asked how they feel about automakers continuously collecting and sharing data on their vehicle’s location, driving behavior, and in-cabin activity, drivers split this way:
- 44% strongly opposed in all cases
- 26% said it depends on what the data is used for
- 21% concerned about current practices
- 9% comfortable with current practices
Together, the strongly opposed (44%) and the concerned (21%) put 65% of drivers on the negative side, against just 9% comfortable. The reaction fits a pattern seen throughout the survey. Drivers accept data collection they agree to and resist the kind that happens without their say.
Beyond comfort level, there’s the question of driver awareness. Asked whether they knew automakers were collecting and sharing this data, 44% said no. Extrapolated to the U.S. adult population, that is an estimated 113 million Americans who do not know the practice exists.
The awareness gap widens with age.
The two findings sit uneasily together. Drivers overwhelmingly oppose this data sharing, yet a large share do not know it is happening, and awareness is lowest among the drivers least likely to go looking for it. The FTC’s action against GM shows regulators have noticed. With connected cars becoming the default, closing that awareness gap will fall to regulators and automakers more than to drivers themselves.
Drivers reject subscriptions for built-in car features by 7-to-1
Around 64% oppose subscription fees for built-in features, versus 9% who support them
Many automakers now charge subscription fees for features built into the car at the factory, sometimes including safety features. However, drivers reject the idea decisively:
- 47% oppose subscription fees for built-in features in all cases
- 19% say it depends on the feature and price
- 12% oppose for safety features but accept them for convenience features
- 9% support the practice generally
- 8% have no strong opinion
- 5% oppose for hardware features but accept them for software and services
Roughly 64% of drivers object to subscription fees in some form, versus 9% who support the practice. That’s a margin of about seven to one. Even drivers who accept some subscriptions tend to object when the fee unlocks hardware already built into the car.
That distinction matters for automakers banking on subscription revenue from existing hardware, since that is the pricing drivers object to most.
Drivers are choosing hybrids over EVs, and not because of price
At identical price, 70% would pick a hybrid over an EV. Only 14% choose the EV, and even Gen Z picks hybrids 2-to-1
Given the choice between a hybrid and an EV at the same price, drivers still favor the hybrid by a wide margin. A strong 70% chose it this year against 14% for the EV, with 17% unsure. Set the undecided aside and the hybrid takes 84% of the decided vote, almost the same as its 83% share a year ago.
Even Gen Z, the group most often assumed to favor EVs, picks the hybrid two-to-one, 61% to 28%. The margin only widens with age, with only 5% of Boomers preferring the EV.
This is not about EVs costing more or offering less. Even with price and vehicle held constant, drivers still prefer the hybrid across all ages.
The concerns are likely practical. EVs still come with unresolved questions around driving range, access to charging, and the overall cost and uncertainty of ownership. A hybrid requires little change in behavior, while an EV requires drivers to adjust how they refuel, plan longer trips, and estimate running costs. Until those barriers narrow, the hybrid represents the lower-risk option, and the data suggests drivers are selecting on that basis.
Buying intentions follow the same logic. More than half of drivers (54%) have no plans to buy an EV at all, and another 9% do not expect to within five to ten years. That hesitation extends to the cost of ownership, including insurance. Asked how the cost of insuring an EV against a gas vehicle would weigh on their decision, 26% called it a significant factor. However, nearly a third (29%) said they did not know enough about EV insurance costs to weigh in at all, making uncertainty the most common response of all.
Drivers expect tariffs to raise car prices in 2026
79% expect tariffs to raise car costs in the next year and 36% have already changed their buying plans
Drivers broadly expect tariffs to push car costs higher. A year after auto tariffs took effect, 79% consider it likely that tariffs will raise car-related costs over the next 12 months, including 47% who consider it very likely. Only 10% expect no effect.
That expectation is already shaping behavior. More than a third of drivers (36%) report changing their car-buying plans in response to tariff news.
- 16% are delaying a purchase to see how prices move
- 8% have decided not to buy at all this year
- 7% are buying sooner to get ahead of expected increases
- 5% have shifted toward American-made vehicles
The net effect is a pullback in demand. Drivers delaying (16%) or holding off for the year (8%) outnumber those accelerating a purchase (7%) by more than three to one.
Fuel prices weigh on these decisions even more heavily than tariffs. Nearly half of drivers (45%) say recent gas prices have changed their plans or behavior in some form.
- 15% are seriously considering a hybrid
- 10% are looking at a more fuel-efficient gas vehicle
- 9% plan to drive less rather than change vehicles
- 4% are delaying a purchase because of fuel-cost uncertainty
The pattern matches the broader EV finding. When fuel prices push drivers to act, they move toward hybrids and efficient gas vehicles, not electric. Only 7% are considering an EV more seriously.
Drivers have less cushion for car repairs than a year ago
Only 54% could pay a $1,000 repair outright; 28% would need a credit card, and 10% couldn’t pay at all
Many drivers have little room to absorb an unexpected repair. Asked how they would handle a $1,000 repair tomorrow, 46% said it’d be a stretch. 28% would put it on a credit card and pay it down over time, 8% would need to borrow or take out a loan and 10% could not cover it at all.
That exposure is concentrated by income. Among drivers earning under $50,000, 21% could not pay the bill at all. Above $100,000, the figure falls below 2%. Families with children lean harder on credit, with 34% saying they would have to charge the repair, against 24% of households without children.
The strain is also growing. In 2025, 33% of drivers said they could not cover a $1,000 repair from cash or savings. This year, 46% say the same, a 13-point increase in a single year. Drivers have less financial cushion than they did twelve months ago, and a routine repair is now beyond the reach of nearly half of them.
What this all means
Drivers are starting to treat car ownership as a variable cost rather than a fixed one. Over the past year, more have switched policies, more have taken on risk in their coverage, and more are absorbing higher premiums by cutting back elsewhere.
More than half of drivers (52%) have cut spending in at least one category to afford their car insurance. Dining out and vacations go first, but for many the cuts reach essentials, with 19% reducing groceries, 14% cutting retirement savings, and 10% cutting healthcare. Even among drivers earning above $150,000, 44% have reworked household spending to cover the bill.
Five years after the pandemic price shock, the higher cost of owning a car has settled into drivers’ baseline budgets, and Jerry’s survey shows them adjusting to it. They shop their policy, scrutinize their coverage, and weigh what a car costs to insure and maintain, not just what it costs to buy.
For the auto and insurance industries, the 2026 data draws a few clear lines. Drivers will accept monitoring in exchange for a discount, but not as a condition of coverage, and 55% would consider leaving a carrier that required it. Opposition to automakers sharing driver data runs about seven to one, and the FTC’s order against GM signals that regulators have begun to act on it. And subscription fees for built-in features win support from just 9% of the drivers expected to pay them.
But it’s not all bad news for drivers. After rising 46% between 2022 and 2024, average insurance premiums fell 6% in 2025, and the 2026 outlook is roughly flat. Shopping around is paying off for many drivers. But the relief is uneven. It is concentrated among drivers with clean records and in lower-cost states, while those in the most expensive states have watched rates keep climbing. And with tariffs still working their way into repair and premium costs, the picture for 2026 is far from settled.
This is where shopping around matters most. When rates move unevenly and renewal increases arrive without warning, the drivers who come out ahead are the ones who compare their options instead of staying put. That is what Jerry is built for. Jerry compares real quotes from 100+ top insurers in minutes, finds the discounts a driver qualifies for, and handles the switch start to finish. Comparing is free, and we never share your data with third parties for marketing purposes.
Compare 100+ insurers through Jerry in less than 5 minutes
Methodology
Jerry’s 2026 State of the American Driver report is based on data from a survey of 1,500 American adults conducted in 2026 using a platform and audience from Pollfish. Respondents were drawn from all four U.S. Census regions and 100% of respondents own or lease a vehicle. The full-sample margin of error is approximately ±2.5 percentage points at 95% confidence; subgroup margins are wider where noted. The sample skews slightly older than the U.S. adult population and slightly toward the South relative to the West; Gen Z findings carry a wider margin of error of approximately ±10 percentage points and are reported as approximate. Figures may not sum to 100 due to rounding.
National extrapolations in this report use the U.S. licensed-driver population (~234M) for behaviors tied to driving or policy ownership, and the U.S. adult population (~258M) for general attitudes and awareness. These should be read as order-of-magnitude estimates rather than precise counts.
Inflation and insurance-rate context is drawn from Jerry internal data, the Bureau of Labor Statistics, and the Insurance Information Institute. The FTC enforcement action referenced in the privacy section refers to the final order against General Motors and OnStar finalized on January 14, 2026. More information about Pollfish and its audiences can be found at pollfish.com.
