What Is "Car Poor"?

October 31, 2024
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Being "Car Poor" in America

For many Americans, owning a car represents freedom, but it often comes at a steep price. Being "car poor" — spending beyond one's means on vehicle-related expenses — creates ripple effects across financial and emotional well-being. From delaying essential repairs to stressing over loan repayments, the hidden costs of car ownership run deep.

Discover what it means to be car poor in America and how it shapes car owners' daily lives and long-term goals.

Key Takeaways

  • 23% of Americans are car poor, compared to 77% who are "car rich."
  • 1 in 2 Americans have delayed car repairs or upgrades due to financial strain
  • 1 in 4 EV drivers is car poor.
  • Car ownership has limited nearly 40% of Americans' ability to save for major goals such as homeownership, education, or retirement.
  • 1 in 2 Gen Z can't afford homeownership, education, or retirement due to car ownership.
  • 13% of Americans have sacrificed their Netflix account to afford their car.

Are You Car Poor or Car Rich?

See how financial strain varies across generations and car brands, giving a clearer picture of who's feeling the weight of vehicle ownership.

Defining Car Poor vs Car Rich

Nearly 1 in 4 Americans (23%) identified as car poor, meaning the cost of owning a vehicle was stretching their budget too thin. In contrast, 77% described themselves as car rich, comfortably managing their car expenses.

Financial strain from car ownership seemed to hit younger generations the hardest. The percentage identifying as car poor by generation was:

  • Gen Z: 28%
  • Millennials: 25%
  • Gen X: 20%
  • Baby boomers: 13%

Car-poor Americans spend an average of 24% of their monthly income on vehicle-related expenses, nearly double that of car-rich individuals (14%). This tight squeeze has made it harder to save for retirement and has put more pressure on covering essentials like rent or mortgage

Half of Americans overall have delayed necessary car repairs or upgrades due to financial strain, including 51% of millennials and 48% of Gen Zers.

Additionally, 16% of millennials and 15% of Gen Z said that they're paying for cars beyond their means. Nearly half of both groups also reported that their stress them out, and about 1 in 4 said worrying about them negatively impacts their mental health.

Car poor EV and Tesla drivers

Among EV drivers, a quarter identified as car poor, with 32% of reporting significant financial strain from their vehicles.

The top five car brands most associated with being car poor are:

  1. Ford
  2. Toyota
  3. Chevy
  4. Jeep
  5. Hyundai

No matter the brand or model, many drivers can relate to the struggle to keep up with payments and maintenance.

Spending Cuts To Afford a Car

We'll now examine what Americans are sacrificing to afford the costs of car ownership and how it impacts their long-term financial goals.

What Americans Have Cut or Spent Less on To Cover Car Expenses

Many Americans have cut back on everyday activities to afford their cars. Dining out was the most commonly reduced expense, with 40% of respondents scaling back. Social activities followed closely, with 32% making cuts to their leisure time, while 31% reduced vacation spending to afford the ongoing costs of vehicle ownership.<

The financial strain of car costs has affected generations differently. Gen Z has most often cut back on social activities, while baby boomers, Gen X, and millennials have more often sacrificed eating out:

  • Gen Z:Social activities 36% | Dining out 34% | Vacations 25%
  • Millennials: Dining out 41% | Vacations 32% | Social activities 31%
  • Gen X: Dining out 40% | Vacations 35% | Social activities 35%
  • Baby boomers: Dining out 35% | Vacations 25% | Social activities 25%

Streaming services have also become common casualties. Netflix was the most frequently canceled subscription (13%), followed by:

  • Amazon Prime Video
  • Disney+
  • Hulu
  • YouTube Premium

Nearly 1 in 5 Gen Zers said cutting Netflix would ease their financial burden and help them escape being car poor.

Beyond lifestyle sacrifices, car ownership has disrupted nearly 40% of Americans' ability to save for major life goals like homeownership, education, and retirement. This impact was again felt more often among younger generations:

  • Gen Z: 52%<
  • Millennials:40%<
  • Gen X:35%
  • Baby boomers:21%

For 1 in 2 Gen Zers, the dream of owning a home, pursuing higher education, or retiring comfortably felt out of reach — all due to the financial demands of car ownership.

Car Buyer's Remorse

This final part of our study explores the impact of car costs on savings, investments, and financial planning.

The financial and emotional toll of car ownership

A number of Americans face regret over their vehicle purchases: 10% said the financial strain made them wish they hadn't bought their car. Millennials expressed the most car buyer's remorse (13%), followed by 10% of Gen Z, 8% of Gen X, and 3% of baby boomers.

The financial toll of car ownership also forced people to make difficult sacrifices. More than half (54%) reported pulling back on investments, while 38% reduced retirement savings to keep up with car expenses.

Others had to delay homeownership (20%) or education (15%) to stay financially afloat. Gen Z reported the biggest setbacks, cutting back on the following:

  • Investments: 56%<
  • Retirement: 34%<
  • Homeownership: 25%
  • Education: 20%

For those classified as car poor, the financial strain was worse — over 40% said they contribute nothing toward retirement savings each month. Some Americans tried to escape their financial stress by selling their vehicles, but 7% reported being unable to find a fair price.

Understanding the True Cost of Car Ownership

Car ownership offers undeniable convenience, but it also brings financial burdens that many Americans, particularly younger generations like Gen Z and millennials, feel most intensely. Whether a vehicle represents freedom or financial strain often depends on careful budgeting and the ability to adapt spending habits.

Methodology

We surveyed 1,000 American car owners to explore their car ownership experiences. The average age was 41; 51% of respondents were women, and 49% were men. Generationally, 11% were baby boomers, 22% were Gen X, 52% were millennials, and 15% were Gen Z.

About JW Surety Bonds

JW Surety Bonds provides industry-leading surety bond solutions to help businesses and individuals meet financial and legal obligations. Whether you need auto dealer bonds or other motor vehicle-related bonds, our fast, reliable service ensures compliance and peace of mind.

Fair Use Statement

This content may be shared for noncommercial purposes. Please link back to this page to credit our study of the hidden costs of car ownership.


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