Americans are spending more on cars at used car dealers. The average price of a used car hit an all-time high in 2018. The average price is $20,084. Rising interest rates caused the increase.
The average individual is now paying an average of $400 a month with loans that average 66.9 months, the longest ever, according to Edmunds.
Why Are Used Car Prices Going Up?
A shift in the average used car price is due to preferences toward larger vehicles, such as SUVs and pickups.
Used cars are also now typically newer and with lower mileage. Passenger cars are falling out of favor and are usually sold for a lower price. For example, a monthly payment on a Ford F-150 averages $492, while payments on a Toyota Corolla average $295.
Cheaper vehicles are getting harder to find as well. Five years ago, about a quarter of used vehicles sold for less than $10,000. Now that number is 1 in 6.
If you are searching for a lower-priced car at used car dealers then you want to consider a passenger car, such as a compact sedan. Despite the increased cost of used vehicles, buying a new vehicle is still much more expensive.
New vehicle costs are also increasing. The average for new car prices has gone up $4,000, while the price for used cars has gone up $2,000. Used cars still remain the best value for savers. If you are just going to work and home then you don’t need the greatest and latest technology that newer cars offer.
Buyers of cars at used car dealers can take advantage of the large potential savings, especially when you factor in depreciation and are able to choose from a range of well-equipped vehicles that are still in good condition.