Consumer Worries — Rising Auto Costs that Include Insurance

The 2022 State of the American Driver Report is done each year by an insuretech auto ownership called, Jerry. It takes a good look at the ins and outs of driving in the U.S. The survey of 1,250 people aged 16 to 75, covers a lot of areas ranging from electric vehicles to self-driving vehicles to the high cost of owning an auto and insuring one. It also looks at how we all feel about driving, what interests us about it and our worries about that age-old American tradition of driving.

The survey results start with electric vehicles

• 33% don’t think they’ll ever drive an all-electric car
• 50% expect to drive one within the next decade

  Those wanting to drive electric cars are mostly millennials and Generation Z. Both generations think they’ll be able to drive an autonomous vehicle in the next five-years. They are most interested in those vehicles because they’re inexpensive to drive.

  A big problem we all have with driving today — says Jerry’s data scientist, Lakshmi Iyengar — is how badly COVID has impacted the buying and selling of autos and how much it costs to drive one.

  “Americans experienced sticker shock when shopping for new and used cars in 2021, and no relief is in sight this year,” Iyengar said. “This raises the total cost of car ownership and creates the need to cut costs elsewhere. Despite significant EV interest due to expected cost savings, consumers likely won’t find immediate cost reductions when buying an EV. That may come over the next 10 years as technology and charging infrastructure mature.”

  Car insurance was also a topic of discussion in the study. It listed the most expensive and least expensive states to insure vehicles. The most expensive first:

  1. New York — $355

  2. Maryland — $247

  3. Delaware — $242

  4. New Jersey —$241

  The least expensive states — on average — for auto insurance include the PIA Western Alliance state of Idaho.

  1. Vermont — $87

  2. Wisconsin — $90

  3. Idaho — $91

  4. Oklahoma — $92

  “Insurance carriers may not find this surprising given that the most expensive states are likely more densely populated and have more drivers on the road, which could be associated with risk of accidents,” Iyengar says. “Last year, insurance carriers offered short-term discounts to account for changing driving habits during the pandemic. At the end of 2021, we saw those discounts falling off, which will likely increase average cost for car insurance in 2022 for drivers. But not all workers are hitting the roads again.”

  As for how much we’ll all be driving in the near future.

• 22% say they’ll drive a lot less in 2022 than they did in 2019
• 69% say they’re going to return to their pre-pandemic driving

  Here are some other facts found in the Jerry survey:

• More of us will sell our cars in 2022 on digital platforms like Autotrader & Facebook’s marketplace
• 50% drove instead of flying in 2021
• This year 44% intend to start flying again

As for driving to work. We might continue to see a large number of people working from home.

“Insurers should expect to continue seeing customer interest in work from home or low annual mileage discounts in 2022, as driving habits remain impacted by COVID-19,” Iyengar says. “Additionally, we as an industry, cannot forget that shoppers for any product or service expect no more than a few clicks to complete a transaction. Customers are comfortable conducting the complete auto insurance transaction online and with no phone calls. Speed and simplicity are not optional.”