Used car payments hit record $400 per month as prices top $20,000

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.

More:Rising interest rates and prices hurt October auto sales, with SUVs still faring better than cars

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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.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.