Nearly Half of Gen Z Would Cancel Their Policy If It Increased by 10%

The Cost of Driving in 2026 is High

Inflation has affected people's budgets across the board. While the overall rate of inflation slowed in June, prices are still high for the things we buy every day. Energy costs are up with gasoline prices surging 26.7% and electricity increasing 4.0%. And then there's groceries, which are up 2.7%.^[1]

When we surveyed Americans on their economic concerns, 63% were Extremely Concerned or Very Concerned about inflation, and those numbers were fairly consistent across all ages. 61% were also Extremely Concerned or Very Concerned about rising gas prices. 

And then there's car insurance. A requirement in most states, the average cost of insurance per year has now reached $2,079 a year. Combined with the other high costs, people are having to make changes, but the changes they're considering vary based on age.

People of All Ages Are Driving Less Because of High Gas Prices

Gas prices have been consistently high, hovering around or above $4 a gallon.^[2]

In order to fit these rising costs into fixed budgets, many people are having to adapt their behavior. Some are choosing to drive less, and when driving less isn't an option, others are choosing to cut other areas of their budgets in order to save gas.

Interestingly, nearly 60% of all Gen Z, Millennial, and Gen X drivers surveyed are choosing to drive less and/or cut other aspects of the budget to afford gas. Only Boomers and Mature drivers aren't feeling gas prices straining their resources as much.

Gen Z and Millennials Are Taking on More Risk

Insurance is a way of managing risk. By taking more risk on yourself, such as by reducing coverage to liability only, you can pay less. However, these short-term savings can cost you more in the event your car is damaged or destroyed, and you don't have the money to repair or replace it.

Younger households are feeling the brunt of current economic pressures. To cope, Gen Z and Millennials are remarkably flexible—and surprisingly willing to take on financial risks. We asked drivers what they would do if their insurance policy costs increased by 10%. Nearly half of Gen Z drivers said they would consider canceling their policy altogether. Slightly less extreme but still on the increasing risk scale, Millennials were the most likely of all age groups to choose to reduce coverage or increase their deductible, with 58% saying they would consider this path.

When asked directly how comfortable they were to take on more financial risk in exchange for saving money, Millennials were the group most likely to be comfortable with it. 67% of Millennials said were comfortable taking on more risk, compared to 55% of the general population.  

Gen Z and Millennials Have Challenges in Common Around Auto Affordability

One thing that is clear throughout the survey is that Gen Z and Millennial drivers share a lot of the same concerns and challenges. In both groups, 41% said they were considering shedding a vehicle entirely due to affordability concerns. For comparison, only 15% of Boomer drivers said the same. 

Millennials and Gen Z face similar economic challenges because both generations entered adulthood during periods of economic instability: the 2008 recession for Millennials and the pandemic-era inflation for Gen Z. Both groups have been burdened by historically high student debt, soaring housing costs, and stagnant wage growth, making traditional milestones like homeownership difficult to achieve.^[3]

Thus, for both groups, rising costs hit a little harder, and they're more willing to take on more financial risk to save in the short term. Of course, the cruel irony is that by exposing themselves to more risk, they may end up in a worse financial position in the event of an accident, as costs to repair and replace vehicles are also on the rise. 

Why Shopping for Insurance Regularly Is Important

One thing younger drivers have going for them: they're more likely to shop for insurance. In fact, Millennials were the group most likely to say they planned to shop for insurance in the next 12 months. 

Shopping for insurance at regular intervals (ideally at least every 6 months) is the only way to make sure you're getting the best rate. Insurance prices can change as you age, as tickets fall off your record, and as risk levels in your area change. You won't know unless you look. 

As shopping for insurance consistently can be a pain, consider signing up for automatic shopping with The Zebra. Enter your current policy details once, and we shop for you, automatically letting you know when we find you a deal and helping you switch. 

Methodology

The Zebra partnered with Savanta, an independent agency, to conduct an original survey, which is based on online responses from 1,500 US auto owners, that was conducted in April 2026. The data from 1,500 consumers has been weighted to the most recent Census to ensure it is representative of US consumers who own vehicles. 

We define generations by the following breakdowns: Generation Z (1997–2008), Millennials (1983–1996), Generation X (1966–1982), Baby Boomers (1947–1965), and Matures (1946 and earlier).