Monthly Market Update: Will European residual values continue to fall in 2025?

01 July 2025

Residual values (RVs) suffered yet another drop across major European used-car markets in June. But is this trend expected to continue in the second half of the year? Autovista24 journalist Tom Hooker explores the topic with Autovista Group experts.

Average RVs of used cars after 36 months and 60,000km, expressed as a percentage of original list price (%RV), fell again across major European markets in June. Switzerland, Italy, Spain, France, Austria, Germany and the UK all saw values drop year on year, continuing a declining trend.

Used-car values in Austria were down by 2.5pp to 48.8%, as Germany recorded a %RV of 48.2% after a 1.7pp fall. The UK was the most resilient market, dropping by 1pp to 50.5%.

Switzerland suffered the largest fall compared to June 2024, with %RVs dropping by 4.7 percentage points (pp) to 42.8%. Italy also endured a steep decrease, falling by 4.4pp to end the month at 47.9%. %RVs in Spain sat at 55.5% after declining by 3.7pp, while France saw a 3.5pp drop to 52.5%.

Negative European RV outlook?

Unfortunately, this trend is not expected to slow down this year. %RVs are forecast to keep falling over the next three years in all seven of the observed European used-car markets. However, these declines vary across each country.

Italy is predicted to see the largest drop in values out of the seven markets in 2025. Values are expected to drop by 8.2% by the end of the year. In 2026 and 2027, significant declines are also predicted, with %RVs projected to fall by 5.6% and 5% respectively.

Switzerland is also forecast to suffer a significant drop in 2025, with a predicted fall of 4.2%. This is expected to ease over the next two years, with decreases of 1.5% and 0.4% in 2025 and 2026, respectively.

On the other hand, %RVs in Austria are forecast to remain relatively resilient. A 0.2% fall in 2025 is predicted, followed by a 0.7% drop in 2026 and a 0.6% decline in 2027. Spain is expected to see steady values, with a 1.4% decrease forecast this year. This will drop will change marginally to 1.3% in 2026, then 1.2% in 2027.

Rising European list prices

So, what is influencing these negative outlooks? One factor which can impact values is new-car list prices. If this metric rises without an increase in used-car transaction prices, RVs can experience downward pressure. In June, six out of the seven markets saw list prices rise compared to 12 months ago.

The most significant rise was recorded in Austria, which saw this metric grow by 8.4% year on year. Germany and Spain recorded a 6.9% and 6,8% increase in list prices, respectively. France also posted significant growth of 5.5%. List prices in the UK were up by 4.9% and Switzerland recorded a 4.8% rise.

Italy was the only country to see stable list prices compared to one year ago, with this metric falling slightly, by 0.6%.

Falling European supply

Supply levels, measured via the active-market volume index (AMVI), are also putting pressure on RVs. Apart from Italy, where the AMVI improved by 16.1% year on year, all other observed countries endured a decline.

The steepest drop by some distance was recorded in Spain, with used-car adverts down by 45.4% compared to June 2024. Switzerland also suffered a notable AMVI decrease of 10.5%.

France saw supply fall by 8.4% year on year, followed by the UK, which posted a 7% drop. Then came Austria with a 4.8% decline, as used-car supply in Germany decreased by 2%.

Demand grows in Austria

‘The sales-volume index (SVI) in Austria increased in June, after a double-digit drop in May. The number of observed sales increased by 11.9% compared to the previous month and by 7.1% compared to June 2024,’ noted Robert Madas, Autovista Group’s regional head of valuations.

The AMVI of two-to-four-year-old passenger cars remained stable in June compared to May. On the other hand, the supply volume of passenger cars in this age bracket was down by 4.8% compared to the previous year.

The average amount of time needed to sell a used car increased slightly to 68.3 days. Diesel vehicles continued to be the fastest-selling powertrain, taking 59 days to sell on average. This was followed by full hybrids (HEV) at 64.7 days, plug-in hybrids (PHEVs) at 64.9 days and petrol vehicles at 75.7 days. Battery-electric vehicles (BEVs) took the longest amount of time to sell at 84.7 days.

Overall %RVs increased to 48.8% on average last month. This was a 1.5pp increase compared to May but a 2.5pp decrease from June 2024.

HEVs retained the greatest amount of trade value in June at 53.1%, followed by petrol cars at 51.2%. Then came diesel models with 49.3% and PHEVs with 46.1%. BEVs again held the lowest amount of value, at 39.8%.

‘%RVs are expected to decrease in the coming years, but at a slower pace. This is due to weakening demand and unwavering supply. By the end of 2025, %RVs are forecast to decrease by 0.2%. In 2026, a slightly bigger year-on-year drop of 0.7% is also predicted,’ he outlined.

EVs heavily impacted in France

Across the first half of 2025, BEVs and PHEVs have been the most impacted technology in France’s used-car market.

Used-car volume increased slightly in June. However, this was still below pre-COVID-19 levels. Advertising prices have decreased since the beginning of the year. But it still needs to decrease more to help the average days to sell drop.

Petrol %RVs continued to be stable last month, while the quickest sales came from low-cost and small cars. Diesel-powered vehicles remained stable again. This was helped by a lower volume on the new car market, with fleets transitioning to other powertrains, such as HEVs and BEVs.

‘Many new-car buyers in France have transferred from PHEVs to HEVs as the latter technology is cheaper. In turn, this increases volumes on the used car market,’ explained Ludovic Percier, Autovista Group’s senior RV analyst for France.

In June, HEVs recorded a marginal %RV decline, as more expensive vehicles are entering the used-car market. These models do not hold value as well as the first hybrid vehicles. Yet, HEVs were the quickest powertrain to sell this month.

PHEV values were stable in June after a long period of marginal decreases. The technology’s used-car supply is higher than demand. This caused the powertrain to suffer RV declines over the last few months.

‘New PHEV models are now coming with better electric-only ranges and more premium models. This helps to stabilise RVs. List prices on the new-car market remain high, which explains the powertrain’s significant drop in values in the past months,’ he said.

BEVs combat declining RV trend

BEV values increased in June. However, this was because more of the all-electric vehicles sold belonged to the premium sector. These vehicles can retain values comparatively well. However, BEV models took the longest time to sell in June, taking 84.1 days to sell on average, up by 4.3 days on May.

‘BEVs have endured a decreasing RV trend for two years now. In contrast, new-car buyers are willing to pay for BEVs, even if the vehicle is more expensive than internal combustion engine (ICE) models. This is due to tax purposes that benefit companies and employees with company cars,’ highlighted Percier.

However, used-car buyers do not benefit from any similar advantage. So, they are not willing to pay such a high premium compared to ICE vehicles.

Higher driving ranges have helped to maintain RVs but rising prices have had a huge impact on values. Social leasing, Corporate Average Fuel Economy (CAFÉ) regulation and fleet buyers have led to low RVs on this powertrain. However, the situation improved compared to a period when Tesla and BYD operated large discounts on their vehicles.

Germany’s increasing demand

Following a significant decrease in May, Germany’s SVI showed a strong increase in June. Compared to the previous month, this metric was up by 11.8%, and by 3.2% year on year.

‘Meanwhile, the AMVI of two-to-four-year-old passenger cars improved slightly compared to May, with a 4.9% rise. The supply volume of passenger cars in this age bracket dropped by 2% compared to the previous year,’ outlined Madas.

The average number of days needed to sell a used car increased by two days to 60 days in June. Diesel models sold the fastest at 56.2 days, followed by PHEVs at 57.9 days. Then came HEVs at 60.2 days, trailed by petrol cars at 61.6 days, while BEVs took 64.7 days to sell.

The %RVs of 36-month-old cars at 60,000km showed another increase in June. Models held an average %RV of 48.2%. This was a 0.4 percentage point (pp) increase compared to May but a 1.7pp decrease year on year.

Petrol cars led the market with a %RV of 49.9%. Then came diesel cars at 49.1% and HEVs at 49%, followed by PHEVs at 42.9%. BEVs again retained the lowest level of value at 37.1%.

‘Although RVs have stabilised recently, demand remains rather weak. Therefore, RVs can be expected to remain under pressure. In 2025, %RVs are forecast to decrease, down 2.7% when compared with December 2024. Pressure will probably ease in 2026, with RVs forecasted to decline by 1.4%,’ he stated.

RVs drop in Italy

The decline in RVs for three-year-old vehicles continued as expected, down 4.4pp in June compared to one year ago. RVs also suffered a 0.2pp drop compared to May, although this was mostly due to seasonal factors.

There was a slight improvement in the average number of days it takes to sell a used vehicle. Models left the forecourt 1.3 days quicker on average when compared to June 2024.

BEVs saw a significantly steeper RV drop than the overall average, falling by 4.8pp year on year. This trend has remained over the last few months. PHEVs also saw values slump, down by 6.7pp, however, a slight slowdown is beginning to emerge for both technologies.

‘Last month, the year-on-year gap was even wider, so we expect the decline to stabilise by December. BEVs are forecast to endure a drop of 9.9%, while PHEVs are predicted to see RVs fall by 9.1%,’ said Marco Pasquetti, Autovista Group’s head of valuations for Italy.

There are no major surprises from petrol and diesel vehicles, which continue to make up the core of the country’s used car market.

‘In particular, diesel still holds the largest market share and retains residual value better than any other fuel type. This is despite restrictions in many major Italian cities. The fuel type recorded an average RV of 52.4% in June, well above the market average of 47.9%,’ noted Pasquetti.

Although RVs were down across all vehicle types, it’s worth noting that LPG-powered cars were the fastest to sell, taking just over 40 days on average. Furthermore, the powertrain’s top performers sold in under a month.

Switzerland’s stable supply

After a decrease in May, the SVI increased marginally in Switzerland last month. The number of sales observed increased by 4% compared to May. Year-on-year, the SVI was down by 0.9%.

Meanwhile, the AMVI of two-to-four-year-old passenger cars remained almost stable in June compared to the previous month. However, the supply volume of passenger cars in this age bracket slumped by 10.5% compared to the previous year.

Values of 36-month-old cars at 60,000km dropped again in June, as %RVs fell from 43.3% in May to 42.8%. The year-on-year drop was more severe, down 4.7pp from the values recorded 12 months ago.

‘HEVs retained the most value in June by far at 48%. Then came petrol cars at 44.2%, diesel models at 41.8% and PHEVs at 40.3%. BEVs were once again the worst-performing powertrain. All-electric cars held only 36.7% of their original list price after three years and 60,000km,’ outlined Madas.

June saw two-to-four-year-old passenger cars sell slower than in May. These vehicles spent 78 days in stock on average.

‘HEVs sold fastest at 61.2 days, followed by petrol cars at 74.5 days, diesel cars at 77.7 days and BEVs at 89.5 days. Meanwhile, PHEVs needed the most time to sell at 90 days on average,’ he stated.

A trend of relatively stable supply and low demand will continue as various uncertainties shroud 2025. Therefore, %RVs are expected to decrease in the next years, but at a slower pace. By the end of 2025, %RVs are anticipated to decline by 4.2% compared to December 2024. In 2026, a lower year-on-year drop of 1.5% is expected.

The UK’s RV decline

‘The UK used car market remained relatively stable between May and June, with RVs showing only a slight decline,’ commented Jayson Whittington, Autovista Group’s regional head of valuations, UK.

The average three-year-old car retained 50.5% of its original cost-new price. This result marked a modest drop of just 0.3pp from the previous month. The figure was 1pp lower than the same period last year, indicating a subtle year-on-year fall in values.

Retail activity showed signs of improvement, as the SVI increased by 2.7% compared to May. While this uptick is encouraging, it is tempered by sales remaining 18.3% lower than in June of the previous year.

In contrast, the AMVI experienced a slight month-on-month decline of 2.3%. Dealers may be hesitant to increase stock, possibly due to a lack of confidence or limited availability of desirable vehicles. Compared to June 2024, stock levels on dealer forecourts were down by 7%, reinforcing the notion of constrained supply.

The average time it took for a dealer to sell a used car in the UK also improved slightly, decreasing by 0.6 days to an average of 36.9 days.

Seasonal impact incoming

Breaking down RVs by fuel type, petrol vehicles saw a decline of 0.8pp, bringing their average RV to 51.9%. Diesel cars fared slightly better, dropping by 0.3pp to 52.7%. Hybrid vehicles experienced a minor dip of 0.2pp to 54.3%, while PHEVs fell by 0.1pp to 49.1%.

BEVs also saw a 0.3pp fall, with their average RV now sitting at 37.2%. Notably, BEVs have only lost 0.1pp compared to last year, suggesting that their values have begun to stabilise. However, they remain sensitive to fluctuations in supply.

As the summer months approach, the UK used car market typically experiences a seasonal retraction. June reflected this trend, with activity in the wholesale market beginning to soften and hammer prices starting to decline.

‘Whether this signals a cautious approach from dealers or the early signs of weakening retail demand remains to be seen, but it will be important to monitor how these dynamics evolve in the coming weeks,’ Whittington concluded.