Av­er­age used-car price tops $20,000, sets record

USA TODAY US Edition - - MONEY - Nathan Bomey

Amer­i­cans are spend­ing more than ever for used cars.

The av­er­age price of a used ve­hi­cle hit an all-time high for the third quar­ter of 2018, ac­cord­ing to car-buy­ing ad­vice site Ed­munds.

At $20,084, the av­er­age price was up 3.5 per­cent from the same pe­riod a year ear­lier and up nearly 19 per­cent from five years ear­lier.

And ris­ing in­ter­est rates are driv­ing costs even higher.

The av­er­age Amer­i­can used-car buyer is now pay­ing a record high of

$400 per month – with loans av­er­ag­ing 66.9 months, ac­cord­ing to Ed­munds. That’s the longest ever.

“We’re still see­ing prices ratchet up,” said Ivan Drury, Ed­munds’ se­nior man­ager of in­dus­try anal­y­sis. “It’s def­i­nitely chang­ing the land­scape of the used-ve­hi­cle mar­ket.”

A shift in pref­er­ences to­ward larger ve­hi­cles – namely, SUVs and pick­ups – is one rea­son why av­er­age prices are mov­ing higher. Pas­sen­ger cars, which are fall­ing out of fa­vor, are typ­i­cally sold for lower prices.

Monthly pay­ments on a used Ford

F-150 pickup av­er­age $492, while monthly pay­ments on a used Toy­ota Corolla sedan av­er­age $295.

But cheap used ve­hi­cles are get­ting harder to find, as well.

Five years ago, about 1 in 4 used ve­hi­cles were sold for less than $10,000. Now, it’s about 1 in 6, ac­cord­ing to Ed­munds.

If you’re look­ing for a deal, chances are you’ll have to buy a pas­sen­ger car, such as a com­pact sedan.

“If you re­ally do want to save your­self some money, that is def­i­nitely some ad­vice I would give,” Drury said.

De­spite the in­creased costs of used ve­hi­cles, new ve­hi­cles are still much more ex­pen­sive.

Amer­i­cans paid an av­er­age of $37,007 for a new ve­hi­cle in Oc­to­ber, ac­cord­ing to Cox Au­to­mo­tive.

Drury said used cars re­main the best bet for savers.

“If you’re like most peo­ple and you’re just go­ing from home to work to do ba­sic things, you don’t need the lat­est and great­est,” he said.

GETTY IM­AGES

Av­er­age used-car prices topped $20,000 in the third quar­ter, ac­cord­ing to car-buy­ing site Ed­munds, and have risen 19 per­cent in five years.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.