For much of modern U.S. history, car ownership has been much more than a necessity or a luxury for Americans. It has been a shiny symbol of independence and individualism, a way of life, a personal achievement. The automobile has shaped the country’s streets, cities and suburbs over the past century, transforming social interactions and American culture.
And yet, rising costs are driving a growing number of Americans to turn their back on this national obsession and rethink car ownership, considering less expensive and more environmentally sustainable alternatives, such as car- and ride-sharing, leasing and public transport.
While this phenomenon was set in motion by the rising costs of buying a car, maintenance, repairs and insurance in recent years, as well as changing behavior among the younger generations, fears over the impact of President Donald Trump‘s tariffs could accelerate it.
Why It Matters
New and used car prices have climbed over the past few years, and Trump’s tariffs on goods coming from foreign countries, including cars and car parts, risk bringing the price tags higher by thousands of dollars.
Meanwhile, the cost of repairs and maintenance has also become more expensive since the COVID-19 pandemic, in part because of disruptions in the supply chain and because of increasingly reckless behavior exhibited by drivers on the road. Car insurance has also shot through the roof in recent years, with Bankrate reporting that the average coverage now costs $2,685 per year, up about 12 percent compared to a year earlier.
These growing costs are weighing heavily on the shoulders of Americans bracing for the U.S. economy sliding into a potential recession this year.
What To Know
According to a recent survey by WalletHub, the share of U.S. consumers who were expecting to buy a car in the next six months was down 13.4 percent in April compared to a year earlier. That was partially because of widespread concerns over the impact of Trump’s tariffs on the U.S. economy and its car manufacturing industry.
“An automobile is among the most expensive items in a consumer’s budget, and with the current state of economic uncertainty, it’s not surprising to see car buyers more hesitant about committing to a purchase,” Karl Brauer, executive analyst at iSeeCars, told Newsweek.
“Every car sold in the U.S. relies on imported components, even the models produced in U.S. factories. If there are tariffs on both imported vehicles and imported vehicle components, it will raise the cost of producing vehicles and likely force automakers to raise prices.
“Some of the higher costs might be absorbed by automakers, but with tariffs in the 25 percent or higher range, some percentage of those cost increases will have to be passed on to the consumer.”
Earlier this week, Trump softened his auto tariffs after receiving significant pushback from the U.S. car industry, which feared the negative impact the levies would have on their own production and on prices for American consumers.
While the president had previously imposed 25 percent tariffs on foreign cars and certain car parts, Trump said Tuesday that U.S. auto companies will receive credits for up to 15 percent of the value of vehicles assembled domestically. These can be applied against the value of imported parts, effectively reducing the amount U.S. companies pay for importing foreign parts.
Cars and parts subject to those tariffs would also no longer be hit by Trump’s other tariffs, including 25 percent on goods from Canada and China, 25 percent on steel and aluminum and a 10 percent baseline tariff for all U.S. trading partners.
Industry insiders are skeptical that this move would make much of a difference for U.S. car manufacturers.
“No car is 100 percent American-made. The highest U.S. parts content available today is around 75 percent for the Tesla Model Y, according to Cars.com’s 2024 American-Made Index,” Patrick Masterson, lead researcher for Cars.com’s American-Made Index, said in a statement shared with Newsweek. “This means many vehicles will only partially qualify for the recent tariff credit and consumers won’t necessarily see cuts as a result.
“Bottom line, our advice to car shoppers is that if you’re thinking about buying a car, start shopping now. The new policy gives automakers a bit of a cushion, but there’s no guarantee that the relief will trickle down to consumers.”
A good number of Americans who wanted to buy a car, in fact, have already done so in the first quarter “as they sought to avoid price hikes related to tariffs,” Bankrate Senior Economic Analyst Mark Hamrick told Newsweek.
“Consumer confidence is in a bad place,” he said. “And so also [is] the willingness to take on what is typically a household’s largest purchases and monthly financing commitment. Both car prices and auto loan rates remain elevated.”
What Are Alternatives To Car Ownership?
Americans may no longer be able to afford to buy a car, but they still need to find a way to move around their city and the country to go to work, buy groceries, see the doctor, visit friends and family.
Many are looking at ride-sharing—like Uber and Lyft—car-sharing and using public transportation as valid alternatives to car ownership.
A recent Harris survey conducted on behalf of Turo, the world’s largest car-sharing marketplace, found that 60 percent of car owners said that their car costs increased in the last four years, with nearly half (48 percent) of all respondents declaring to be open to choices other than purchasing or leasing.
“Leasing has become increasingly attractive if only to lower monthly payments,” Harmick said. “The downside is that one doesn’t own the vehicle and is essentially signing up for payments for the foreseeable future, where owners can opt to finance and then be relieved of payments after the loan is paid off. This is particularly useful if the vehicle can be used for many years.”
“Car sharing and rental alternatives are rapidly gaining momentum as Americans look for more flexible and affordable transportation options,” Turo Chief Data Officer Albert Mangahas told Newsweek.
“Nearly half of those we surveyed are open to alternatives like car sharing or subscription-based access, and 57 percent are interested in accessing a car without the long-term commitment of ownership. Financial stress is a major factor, with 42 percent of surveyed car owners believing that giving up ownership would significantly ease their financial burden.”
Public transit, on the other hand, is a cheaper and more environmentally sustainable to owning a car, paying for an Uber or Lyft ride, or renting a car. But it is a more feasible option for residents of densely populated urban areas, while it remains inaccessible for many living in the suburbs and more remote towns of the country, which were not built with public transportation infrastructure in mind.
Non-Drivers Revolution Has Already Begun
While driving appears ingrained in the American way of life, many have already opted out of being at the wheel. According to a Pew Research Center survey released in late 2024, one in 10 Americans seldom or never drive a car or other vehicles, including 6 percent who said they don’t drive at all.
The share of non-drivers went up to nearly two in 10 (18 percent) adults among those living in urban areas. That was double the share of non-drivers in suburban (6 percent) and rural areas (8 percent).
It was more common to find a non-driver among adults in lower-income households (19 percent), Black households (21 percent) and those under age 30 (15 percent).
While many in these categories are just unable to afford car ownership, for the younger generations, it is often a choice not to get a vehicle, and one that they are increasingly supporting.
According to the U.S. Department of Transportation, the number of 16-year-olds with driver’s licenses dropped from about one-half to one-quarter between 1983 and 2022, while the number among 18-year-olds plunged from 80 percent to 60 percent.
In 2022, the latest data available, Generation Z made up about 12.4 percent of all licensed drivers, while millennials and Generation X represented 25.9 percent and 28.2 percent, respectively.
“Younger generations, especially Gen Z and millennials, are clearly shifting away from the traditional dream of car ownership,” Mangahas said. “Our recent survey with The Harris Poll found that 58 percent of Gen Z and 56 percent of millennial survey respondents are likely to consider alternatives to buying or leasing a car in 2025.
“This shift is largely driven by rising costs, with surveyed millennials reporting the highest average monthly car payments of any generation at $244. For many, car ownership has become financially unsustainable, and flexible, on-demand access to vehicles is becoming a more attractive option.”
While younger Americans are driving the shift, older generations are also feeling the impact of rising car costs and are increasingly open to alternatives, Mangahas said.
“Over 60 percent of survey respondents said their vehicle expenses have increased in the past four years, citing repairs, insurance and tariffs making ownership less appealing—and 62 percent of boomers expect those costs to keep climbing,” he said.
A growing number are opting out of ownership altogether, with two-thirds of surveyed baby boomers saying they don’t plan to purchase or lease a car in 2025, according to the survey. Nearly three-quarters (71 percent) of respondents said that renting a car is essential when public transportation isn’t an option, “suggesting that access-based mobility is becoming more mainstream across all age groups, not just a younger crowd,” Mangahas said.
What Happens Next
Brauer is expecting consumer sentiment to continue dipping in the coming months as the impact of Trump’s tariffs unfolds, leading to a potential drop in car sales.
“Consumer confidence is understandably lower than it was a few months ago, and that is reducing the average person’s willingness to spend money or make a large purchase,” he said.
“Buying a car is a major financial commitment for most people, and not something they want to do when their financial confidence has dropped. This will likely lead to lower car sales in the coming months, though a resolution of the tariff situation could reverse consumer sentiment, especially if other economic indicators improve.”
U.S. car manufacturers, who Trump ultimately wanted to benefit from the tariffs, also stand to suffer.
“Automakers have been enjoying robust profits in recent years, but those could quickly evaporate if vehicle sales falter in the coming months,” Brauer said.
“We’ve seen these sudden shifts in car buying during previous economic downturns, and it often has a ripple effect throughout the industry. Hopefully the situation stabilizes and consumer confidence improves before the impact causes an industry contraction.”
Hamrick said that, at the moment, Trump’s tariff policies remain “a moving target,” which makes it hard to predict their future impact on the country or the car industry.
“It hurts affordability that prices are high and slated to go higher,” he said. “With more Americans concerned about the direction of the economy and their own employment prospects, buying intentions and actual purchases will remain under pressure until something changes, if it does, for the better.”
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