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Europe's Used Car Market Remains Resilient in February 2025
The European used car market experienced tight supply and strong demand in February 2025, with the trends generally supporting stable or rising residual values (RVs). While there were regional and segment variations, the overall outlook was positive.
New Car Market Contraction and Used Car Supply
The new car market contracted slightly in early 2025, with registrations down around 0.3% in the first half of the year compared to 2024. This contraction, influenced by higher prices and economic uncertainties, likely constrained the inflow of new vehicles turning into used cars, thereby limiting used car supply.
Robust Demand for Popular Segments
Despite the constrained supply, demand remained robust for certain popular segments such as small SUVs and electrified vehicles. Models like the Dacia Duster, Peugeot 2008, and Toyota Yaris Cross showed stable or growing sales, helping support used car values, especially for cars with hybrid or electric powertrains.
Acceleration of the Electric Vehicle Market
The electric vehicle (EV) market accelerated strongly with a 20%+ increase in EV sales, reaching 13% market share in the first half of 2025. This trend boosted used EV demand and positively influenced their RVs, as more buyers sought affordable electric options.
Geographic Differences
Countries like Italy, Belgium, Germany, and France faced more pronounced declines in new car registrations, potentially tightening used supply more in these regions and supporting RVs there.
Stable or Modest Increase in RVs
Overall, residual values in Europe were expected to be stable or to increase modestly, reflecting tight used car supply relative to steady consumer demand and growing interest in electrified powertrains. However, in markets with sharper declines in new car sales, the used market might see a stronger supply squeeze, further supporting RVs.
Regional Highlights
- In the UK, the average three-year-old car retained 52.7% of its list price in February 2025, a 1.7pp increase compared to December 2024. Despite a fall in retail sales of 19.7% compared to December, there were 5.4% more cars up for sale on dealer forecourts in January.
- In Spain, the average price of a three-year-old car reached €19,621 in February, €266 more than in December. Despite increasing stock days, three-year-old used vehicles showed great price resilience. The Renault Arkana was the fastest-selling model on the Spanish used-car market, selling in less than half the time of the average model.
- In Switzerland, HEVs retained the most value among all powertrains. The sales-volume index (SVI) for two-to-four-year-old cars declined both month on month and year on year across these markets. Used-car adverts declined by 13.1% in the UK, 12.3% in Switzerland, and 9.3% in Austria.
- In Italy, RVs reached 50.2% in January, up from 48.7% in December 2024, but a significant decline in values is expected in the coming months.
- In Austria, diesel vehicles continued to be the fastest-selling powertrain, averaging 60.1 days. RVs of 36-month-old cars at 60,000km increased to 48.3% on average in January, a 0.9 percentage point increase compared to December but a 4.7pp decrease year-on-year.
Looking Ahead
The Italian used-car market is expected to end the year down 3.7% year on year, due to new CO emissions targets, competition with new manufacturers that have undergone consolidation, and new policies designed to protect local production. However, the overall outlook for the European used car market remains positive, with tight supply and strong demand expected to continue supporting RVs.
[1] Source: JATO Dynamics [3] Source: European Automobile Manufacturers Association (ACEA)
In light of the robust demand for specific segments like small SUVs and electrified vehicles, the overall European used car market could witness an expansion in those sectors. (sports: electrified vehicles like hybrids and EVs)
The Italian used-car market, with new policies and regulations actively shaping its landscape, might present unique opportunities for those interested in sports vehicles, as the decline in new car sales could lead to a tighter used car supply and potentially higher residual values for sports cars. (sports: sports cars)
