Buyers Are Spending More Than They Can Afford, Not Getting The Cars They Want

Carscoops

The state of American car buying is bleak, according to a new study from insurance comparison service, Jerry. It found that customers did not get the vehicles they wanted in 2022 and yet are still spending an inadvisable amount of their income on the vehicles they do own.

Jerry sent out a survey to 1,257 vehicle owners or lessees in all 50 states across a variety of age groups to see what car buying and ownership were like last year, and what they might be like this year. Although the number of people looking to buy in 2023 remained pretty much stagnant in the study’s second year, only a quarter of people expect to buy a new car in the coming year, though more said they might be enticed if prices and interest rates fall.

Among those who bought in 2022, though, a third said they wound up buying a used vehicle instead of a new one because of limited supplies at dealerships. A quarter, meanwhile, said that they bought a make and model of vehicle that wasn’t their first choice because of the same issue.

Read: Sales Of America’s Best-Selling Vehicle Fall Again In 2022

Among owners, meanwhile, vehicle expenses are stacking up, with almost a quarter saying that they are spending more than 15 percent of their take-home pay on car payments, to say nothing of gas, insurance, and other expenses.

Two-thirds of owners reported that they had to cut down their spending in other areas because of the high cost of owning a vehicle. Nearly a third said they spent less on family vacations, and, most alarmingly of all, a quarter of respondents said they cut back on groceries because of the cost of owning a vehicle.

“Supply-chain problems that have hit vehicle production are not fully resolved and the supply of newer used vehicles likely won’t return to normal until at least 2025,” said Henry Hoenig, the study’s author. “This means used-car prices will probably remain elevated, even if they fall somewhat from the recent highs.”

Still, a majority (61 percent) of car buyers say they will remain loyal to brick and mortar dealerships in 2023, instead of turning to online retailers. Nearly half of new car buyers say, though, that they are interested in buying or leasing an electric vehicle to help cut down on the cost of gasoline.