Amidst the rising costs of car ownership, a recent MarketWatch Guides survey reveals that drivers allocate a significant portion of their income, approximately 20%, to monthly car-related expenses.
These expenses include repairs, maintenance, insurance premiums, and auto loan payments. Shockingly, nearly 2 in 5 drivers admit they cannot afford necessary repairs and upgrades for their vehicles. The survey identifies Volvo, Mercedes-Benz, Ford, Jeep, and Chevrolet drivers as the most affected, with over half reporting financial constraints. Many respondents have turned to DIY car maintenance as a solution, with 18% opting to reduce their car insurance coverage to alleviate expenses.
Jerry’s State of the American Driver Report echoes these findings, highlighting that 22% of surveyed drivers are reducing coverage, particularly among Gen Z individuals. While this tactic may lower insurance premiums, experts caution against the potential risks, as reduced coverage could lead to additional out-of-pocket costs in the event of an accident. Notably, one in ten respondents is spending over 30% of their monthly income on auto loans, exacerbating their financial burden.
The burden of car-related expenses extends beyond loan payments, with drivers citing fuel costs, unexpected repairs, routine maintenance, and insurance premiums as major financial stressors. Alarmingly, 40% of respondents report being unable to afford other essential expenses due to their car costs, while 1 in 8 find themselves living paycheck to paycheck. Furthermore, 46% of drivers claim their vehicle expenses hinder their ability to save or invest, leading to sacrifices in dining out, vacations, and other leisure activities.
MarketWatch's survey, conducted with 1,000 drivers, sheds light on the challenges vehicle owners face in the wake of the pandemic. Escalating used car prices, rising parts costs, and increased insurance premiums have further strained budgets. Although experts predict some relief in used car prices and inflation, insurance costs are expected to remain high, prolonging the financial burden on drivers.
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