Autovista Group’s 2025 residual value outlook
30 January 2025
After a tumultuous 2024, what will happen to automotive residual values (RVs) in Europe this year? In a new webinar, Autovista Group experts outline their outlook for 2025 with Autovista24 editor Tom Geggus.
How did Europe’s used-car market conclude 2024, and what trends were established across the 12 months? Will values follow a similar course in 2025? What will this mean for certain segments, brands and powertrains, such as battery-electric vehicles (BEVs)?
A panel of Autovista Group experts set out to answer these questions in a new webinar. This included Autovista Group’s chief economist Dr Christof Engelskirchen, director of research and innovation, Dr Anne Lange, regional head of valuations for Southwest Europe and Poland, Ana Azofra, and regional head of valuations of DACH and CEE regions, Robert Madas.
The current market
Engelskirchen outlined four key factors that defined Europe’s used-car market in 2024. Firstly, many new-car markets grew across the region last year. Secondly, this volume is entering the market via short-cycle channels, which is worse for the used-car market.
Third, while consumer confidence remains at a similar level to 2023, it remains below levels recorded in 2019. Finally, there has been subdued economic growth across many European economies.
These wider market trends saw RVs continue to fall in 2024. ‘This does not mean that residual values are below pre-pandemic levels. We are still in a situation where used cars sell at higher prices than in 2019,’ Engelskirchen explained.
Azofra pointed out that residual values were hugely inflated between 2021 and 2022. Then, new-car availability improved in 2023, meaning greater stabilisation and used-car stock levels.
‘Since 2023, prices have started to readjust as the balance between supply and demand has improved,’ she said. ‘On average, we are still above pre-pandemic transaction prices, and we see all these movements as part of a market normalisation process.’
The 2025 outlook
Autovista Group expects RVs of three-year-old cars at 60,000km to fall by 2.5% on average across observed European markets. Azofra pointed out that this ranges from a 0.7% year-on-year drop in the Netherlands to a 4% fall in Belgium.
‘Several factors will influence residual values and explain this negative outlook. On the one hand, the depreciation of BEVs and then of course the impact of CAFE regulation,’ she explained. On the other hand, the macroeconomic conditions and price pressure from new competitors will also play a role,’ she outlined.
This decline is expected to ease in 2026. Countries like Sweden, Finland and the Netherlands are even forecast to record positive figures next year. In 2027, European RVs are expected to decline by around 1% on average.
Powertrain outlook
Madas confirmed that BEV RVs experienced a difficult 2024, particularly in countries like Italy and France. Austria, Switzerland and Germany were also affected. Meanwhile, Spain and the UK saw slightly more stability.
This overall negative trend is expected to continue across Europe into 2025. The outlook for 2026 is similar, only with slightly smaller adjustments. So, what is the reason for this?
Madas explained that CO2 targets are putting pressure on OEMs as they look to avoid penalties. This prompts discounting on the new-car market, which puts pressure on RVs. This trend has already been observed in some European countries.
‘Another interesting effect comes from the supply side,’ he noted. ‘We have talked about the supply being quite low compared to previous years, but for BEVs, the supply actually increased in recent years.’
In 2021 and 2022, BEVs took a greater share of European new-car markets. These models are now entering the used-car market. This increased supply has been met with weak demand.
In comparison, internal-combustion engine (ICE) powered models recorded far more stable RVs on average. However, they did still see a slightly negative decline across 2024. ‘ICE models generally perform better when it comes to RVs for three-year-old vehicles or even older vehicles,’ Madas explained.
Indicators versus outlook
So, how does Autovista Group track the market’s behaviour when constructing these outlooks? Lange revealed market observation data, covering the age, stock days and price changes of vehicles sold by dealerships. These indicators can be used as early warning signs for future trends.
‘The average car age has risen over time,’ Lange stated. ‘That goes very much in line with what Anna and Robert have been saying about supply shortage. There have not been very many young cars coming into the market over the last years.’
The BEVs on offer have also been far younger than the petrol and diesel-powered models. However, the amount of time all-electric vehicles spent in stock has been climbing as the used-car market saw the supply of this powertrain increase.
Lange also explored the price change count, which notes how often a price needs to be adjusted before a sale is achieved.
‘There was quite a lot of price adjustment for battery-electric vehicles over the last two years,’ she highlighted. This means it is much more difficult for BEVs to be sold compared to ICE models. Combining stock days and price changes, it becomes clear how much work is needed to sell these models.
During the webinar, the panel also discussed Spain’s exceptional automotive performance and the impact of weaker registration years.
Azofra considered the complexity of BEV forecasting, Madas explored the performance of small cars, and Engelskirchen analysed the impact of new-brand strategies. These insights, as well as a question-and-answer session, are available in the webinar recording.
Enjoyed Autovista Group’s 2025 residual value outlook? Then sign up for the next webinar: Transition to EVs – Has Europe already peaked? It will take place on 12 March 2025 at 9.30am GMT / 10.30am CET. Find out more and register for your place today.
