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European demand for used cars experiences significant decline

Analysis of European Used Car Market Trends – January 2025

The European used-car market is experiencing a decline in demand, but how does this affect supply and residual values? Let’s take a closer look at the trends in major European markets.

In January, major European markets such as Spain, Germany, Austria, Italy, Switzerland, and the UK reported double-digit drops in demand for two-to-four-year-old cars. This decline in demand was also reflected in the supply of used cars, with active-market volume indexes (AMVI) showing a decrease compared to December 2024.

Despite the decline in both supply and demand, the balance between the two means that there is no additional pressure on residual values (RVs). RVs are already forecasted to decline across many European markets in the next three years.

In Austria, the SVI continued to fall in January, with a year-on-year decline of 10.7%. The average time needed to sell a used car decreased significantly, with diesel vehicles being the fastest-selling powertrain.

Germany also saw a significant decline in the SVI in January, with a year-on-year drop of 26.6%. The average number of days needed to sell a used car decreased, with BEVs being the fastest-selling powertrain.

Italy, on the other hand, saw an increase in %RVs in January, but this is expected to be a seasonal effect. The market is expected to face challenges in the coming months, including new CO2 emissions targets and competition from new manufacturers.

Spain, with a good macroeconomic situation, saw price resilience in January despite increasing stock days. The Renault Arkana was the fastest-selling model in the Spanish used-car market.

Switzerland experienced a significant decline in the SVI in January, with RVs dropping slightly. The market is expected to see a trend of relatively stable supply and low demand in the coming years.

In the UK, the average three-year-old car retained 52.7% of its list price in January. The market is expected to see a balanced supply and demand dynamic this year, with RVs expected to fall by approximately 3% by the end of the year.

Overall, the European used-car market is facing challenges in terms of supply and demand, but the balance between the two is helping to mitigate pressure on residual values. It will be interesting to see how these trends develop in the coming months and years.