Residual value trends and the next market shift

14 October 2025

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A tense and uncertain economic environment is increasing pressure on Europe’s automotive market. But how will this affect residual values (RVs)? In a new webinar, Autovista Group experts discussed emerging trends and used-car impacts with Autovista24 journalist, Tom Hooker.

RVs across Europe have continued to decline in 2025, amid falling used-car prices and an unstable economic environment. Meanwhile, powertrains are seeing varied performances, with one particular technology providing a surprise. But is this decline expected to continue into 2026?

Autovista Group’s latest webinar, The road ahead: Residual value trends and the next market shift, answered this questions. The panel featured Dr Anne Lange, product director, valuation apps at Autovista Group, Robert Madas, regional head of valuations (DACH and CEE)​ at Autovista Group and Javier Salgado, director of valuations and forecast experts at Autovista Group.

European market faces uncertainty

In the first half of 2025, Europe’s economy appeared to be stabilising after a period of stagnation. However, Lange showed how both inflation and the consumer price index have risen. This is mainly due to ongoing geopolitical tensions and conflicts.

These trends have hurt the automotive industry. Stagnating economies have led to affordability issues and reduced investment. Additionally, ongoing tariff negotiations have caused delays in investment and supply.

There has also been a market push for more affordable battery-electric vehicles (BEVs). Meanwhile, the market has seen battery technology become cheaper and more efficient.

‘We are in a phase of a lot of technological challenges. We have a massive electric vehicle (EV) push that is putting pressure on manufacturers to become more profitable,’ Lange noted.

Furthermore, used-car prices are still dropping, albeit at a slower rate. This is despite an apparent stabilising trend in the first half of 2025. Yet, the uncertain economic environment was just one factor affecting this decline.

Residual value decline expected

RVs presented as a percentage of new list price (%RV) in most of Europe’s major used-car markets have continually fallen. However, the pace of this descent has now slowed compared to previous years.

Madas explained that this year, %RVs remain well under 2024 levels. They are also under those recorded in 2023, 2022 and 2021 when %RVs were greatly inflated. This can be seen as a continuous market normalisation following the COVID-19 pandemic and the supply crisis.

Specifically, there is growing pressure on three-to four-year-old vehicles. This age group has seen an increasing number of stock days and price changes over the last few months across all powertrains. BEVs still sell the slowest and record the highest amount of price changes in this age group, followed by plug-in hybrids (PHEVs).

Overall, pressure on %RVs is forecast to remain across Europe’s major used-car markets in 2026. In particular, passenger cars at 36 months of age and above will be affected more than younger vehicles.

‘The market outlook for 2026 is still negative. We expect some more adjustments, but at a slower pace,’ Madas stated.

Increasing market pressure

Madas then showed how %RVs for vehicle age groups have developed differently over the last four years.

The youngest used vehicles have seen %RVs reach 2021 levels in many markets. This has been caused by supply exceeding demand. Meanwhile, %RVs of cars aged 36 months and above are still relatively high.

There is significant room for correction, as supply levels are expected to return in this age group. This is due to recovering new-car registrations in 2023, following particularly weak years in 2021 and 2022.

Madas broke %RVs down by powertrain, where he noted that BEVs have struggled. Meanwhile, PHEVs have performed significantly better. In some markets, such as Germany, younger PHEVs have developed better than BEVs, causing the gap between the two technologies to widen.

This overarching trend in Europe is caused by differences in supply. PHEVs have considerably smaller volumes in the used-car market and can be better absorbed by current demand than BEVs.

Finding the fleet recipe

However, Salgado pointed out that these trends do not necessarily translate directly into individual fleets.

‘Most market changes are already included in our forecast values. Ideally, reforecasts should stay quite stable, which would show that our assumptions were accurate when we first forecasted the value of the vehicle,’ Salgado commented.

With most leases in Europe lasting around three and a half years, the first forecast is completed long before the car reaches the used market. When conditions change, such as demand or stock levels, forecasts are updated to include those new elements.

Salgado then presented two artificial fleets of around 10,000 vehicles in Spain and Germany, with analysis completed in each quarter. The %RV of both fleets remained stable over the last year. The Spanish fleet saw the biggest change, with a small 0.5 percentage point decline.

He highlighted that every fleet is unique. Even in one country, results can change depending on the powertrain or brand perception. Salgado also showed that while PHEV %RVs have provided a surprise, they are evolving similarly to petrol and diesel models in some fleets.

Moreover, in this artificial fleet, full-hybrid values saw a comparatively larger drop at the end of the lease contract. This is despite the technology maintaining the highest %RVs of any powertrain in Europe. Enjoyed The road ahead: Residual value trends and the next market shift? Then sign up for Autovista Group’s next webinar: Global new-car market outlook 2026. It will take place on 25 November 2025 at 09:30 BST / 10:30 CET. Register for your place today.