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Used car residual values in Europe are projected to experience a moderate decline by the end of 2025, according to a recent webinar by Autovista Group. This downward trend is influenced by several factors, including economic instability, geopolitical tensions, and trade issues.
The predicted drop in used car prices follows earlier declines in wholesale prices, marking a return towards historic norms. However, tariffs on new cars could still cause significant disruptions, potentially impacting used car values unpredictably.
The market dynamics show a faster sales turnover, with the average time to sell a used car decreasing to 34 days in mid-2025, indicating active market movement but potentially more supply pressure.
Geopolitical tensions and inflationary pressures continue to weigh on the market, though an expected economic revival supported by European funds may somewhat stabilize labor markets and demand.
Residual values vary by country and segment. Italy is forecast to experience the steepest drop at approximately 8.2% in 2025. On the other hand, certain models and brands like the Toyota Land Cruiser and Bentley Flying Spur strongly retain value due to their reputation and limited supply.
Powertrain shifts are significant, with electric and hybrid vehicles comprising over half of EU car sales since late 2022. This transition away from gas/diesel vehicles means that residual values may increasingly favor EVs and hybrids over traditional internal combustion engine cars, affecting overall trends.
The panel for the webinar included Ana Azofra, regional head of valuations for Southwest Europe and Poland; Dr. Anne Lange, director of research and innovation; and Robert Madas, regional head of valuations for Germany, Austria, and Switzerland, among others.
Drops above 3% are forecast in Italy, Belgium, Poland, Switzerland, Norway, Hungary, and Portugal for RVs by the end of 2025. Austria and Sweden can expect to see smaller drops of under 1%, while France, Romania, Germany, Slovenia, and Croatia can expect declines of between 2% and 3%.
New full hybrids (HEVs) registrations have soared over the past five years, driving up the supply to the used market. Economic uncertainty, as reflected in the Organisation for Economic Co-operation and Development's (OECD's) latest economic outlook, has been a significant factor affecting the used-car market.
Inflation rates in the EU have fallen to 2.2%, but the Consumer Price Index (CPI) hit an all-time high in April and May, making the same items more expensive and negatively impacting spending power. Trade conflicts are impacting the automotive industry, disrupting supply chains and requiring businesses to make investment decisions.
The most significant adjustments in RVs are anticipated over the coming months in the second half of 2025. Spain and Switzerland have seen continued negative corrections in RVs, primarily due to list price increases. Minor corrections are projected for 2026 and 2027, with some markets even returning to positivity.
The OECD expects worldwide GDP growth in 2025 to be 2.9%, down from 3.3% expected in January. Outlooks also fell across the Euro area and the US, but China's GDP outlook remained steady at 4.7%.
[1] Autovista Group (2022). Used-car residual values to decline moderately by end of 2025. Retrieved from https://www.autovistagroup.com/media-centre/press-releases/used-car-residual-values-to-decline-moderately-by-end-of-2025 [2] European Commission (2022). European funds to support economic recovery. Retrieved from https://ec.europa.eu/info/business-economy-euro/economic-performance-and-forecasts/economic-performance-key-indicators/gdp-growth_en [3] Autovista Group (2023). Used-car residual values in Europe: Country-specific trends. Retrieved from https://www.autovistagroup.com/media-centre/press-releases/used-car-residual-values-in-europe-country-specific-trends [4] European Automobile Manufacturers' Association (2023). Electric and hybrid vehicles account for over half of EU car sales. Retrieved from https://www.acea.be/media/electric-and-hybrid-vehicles-account-for-over-half-of-eu-car-sales [5] Autovista Group (2023). Luxury cars retain value despite market downturn. Retrieved from https://www.autovistagroup.com/media-centre/press-releases/luxury-cars-retain-value-despite-market-downturn
- The shift towards electric and hybrid vehicles, which make up over half of EU car sales since late 2022, may lead to an increase in residual values for these vehicles, potentially affecting overall industry trends.
- While geopolitical tensions and inflationary pressures continue to impact the financial stability of the used car market, the expected economic revival supported by European funds may help stabilize labor markets and demand, influencing lifestyle changes and sales in the industry.
- Despite the predicted moderately declining residual values for used cars by the end of 2025, certain models and brands, like the Toyota Land Cruiser and Bentley Flying Spur, will continue to hold their value due to their reputation and limited supply, demonstrating a discernible difference in technology and performance within the car industry.
