Used car prices: Leveraging the trend for affordable car financing
30/04/2025
8
Minutes
Katrin Straub
Managing Director at nextsure
Used-car prices have stabilised after the record years, while loan interest rates are showing signs of a turnaround. This market situation opens a window of opportunity for savvy buyers to secure particularly favourable car finance and save hundreds of euros.
The topic in brief and concise terms
Used car prices have stabilised at a high level in 2024/2025, while falling key interest rates are making affordable car loans possible.
Choosing the financing option (instalment loan, three-way financing) and the right timing can reduce the total cost by hundreds of euros.
The residual value forecast is crucial: used electric cars lose significantly more value, at 48.5 per cent, than petrol cars, at 36 per cent, over three years.
Market analysis 2025: Stable prices meet falling interest rates
Used car prices started 2025 on a stable footing and averaged 27,059 euros, just 1.2 per cent below the same month last year. This stability after the turbulent previous years provides a solid basis for planning for buyers. At the same time, the European Central Bank (ECB) cut its key interest rate to 2.0 per cent by June 2025, making refinancing cheaper for banks. This combination of predictable vehicle prices and potentially falling borrowing rates creates an ideal environment. Buyers who act now can secure attractive terms before demand and therefore possibly prices rise again. Financing for nearly new used cars is therefore becoming particularly attractive. The right strategy now depends on cleverly combining these two market factors.
Optimise timing: Determine the best time to buy for maximum savings
The right time to buy a car can have a significant impact on your overall costs. Historically, the summer months are often marked by promotional offers, as demand declines somewhat for seasonal reasons. A simple example: A discount of just three per cent on a used car worth €20,000 means a direct saving of €600. Even more important is the trend in interest rates when financing over four years. If the effective annual interest rate falls from six per cent to five per cent, for example, you save more than €400 in interest costs over the term on a loan of €20,000. Anyone who wants to calculate financing quickly should examine current interest offers carefully. The key is to align a favourable purchase price with the low point in interest rate trends.
Use financing options strategically: Three ways to low monthly instalments
Choosing the right financing option is crucial for your monthly outlay and the total cost. According to a study by the Bankenfachverband, 55 per cent of car finance agreements are traditional instalment loans. Here are the three most common models at a glance:
Classic instalment loan: With fixed instalments and terms, it offers maximum planning certainty. Ideal for buyers who want to own the vehicle at the end.
Three-way financing: Allows low monthly instalments thanks to a high final payment. At the end of the term, the car can be returned, purchased or refinanced.
Balloon financing: Similar to three-way financing, but the final payment must be settled in full at the end, which often requires follow-on financing.
Our expert tip: A flexible three-way financing is suitable if you are unsure whether you want to keep the car in the long term. However, pay close attention to the terms for the final payment to avoid cost traps.
Maximising negotiating room: How price analysis strengthens your position
Sound knowledge of the current market situation is your strongest lever in price negotiations. Prices for used cars are stable, but there are regional differences of up to 2,000 euros for the same model. Use online valuation portals to determine the exact value of your desired vehicle. A well-informed buyer who appears as a cash buyer can often negotiate an additional discount of three to five per cent. This is made possible by taking out the car loan directly with a bank rather than through the dealer. Another option is to trade in your old car, which can further improve your negotiating position. This ensures that you benefit not only from overall market trends, but also from individual negotiating skill.
Residual value forecast: Safeguarding the value development of electric cars and combustion engine vehicles
Residual value development is a decisive factor in a vehicle’s total cost. There are particularly large uncertainties when it comes to electric cars. Three-year-old petrol cars still achieve an average of 64 per cent of their list price, whereas battery electric vehicles (BEVs) reach only 51.5 per cent. This loss in value of more than 12 percentage points compared with petrol cars represents a significant financial risk. Premium electric cars such as the Porsche Taycan even lost 38 per cent of their value over three years, which corresponds to around 50,000 euros. Our expert tip: Take the Total Cost of Ownership (TCO) into account, which includes all costs over the period of ownership. A lower purchase price for an electric car can quickly be offset by higher depreciation. Anyone who prioritises value stability could find an interesting alternative with a loan for a classic car. Careful model selection minimises residual value risk and secures your investment in the long term.
Creditworthiness and contract details: Laying the foundation for top terms
Your personal creditworthiness is the key to the best interest rates. A good Schufa score signals to the bank a low risk of default, which is rewarded with lower interest rates. You can improve your chances by requesting a free data copy from Schufa before applying for a loan and having any errors corrected. Combining several small loans into one can also improve your score. Even an improvement in the effective annual interest rate by one percentage point can mean savings of several hundred euros over the term. It is therefore advisable to review your own financial situation before requesting quotes. Even a car loan with average creditworthiness is possible, but preparation is crucial for fair terms. This lays the foundation for really affordable car finance.
The current market situation offers a rare opportunity to set the course for advantageous vehicle financing. Stable used car prices combined with a tendency for loan rates to fall create an ideal environment for car buyers. As shown, careful planning, the right timing and the appropriate financing strategy lead to significant savings. Your creditworthiness and negotiating skills are the decisive tools here. Use this knowledge to achieve your personal goals, whether that is the lowest possible monthly instalment or the fastest repayment.
Request an individual risk analysis now: Have your insurance situation checked free of charge and receive specific suggestions for optimisation.
More useful links
Statista offers statistics on average used car prices in various German cities.
Statista provides data on average prices for used and new vehicles in Germany.
DAT offers an article on purchase prices when buying a used car.
DAT provides the DAT report on this page.
DAT Group offers a short report of the DAT Report 2025 in PDF format.
Statistisches Bundesamt provides an interactive graphic on prices in the car and transport sector.
Statista offers the consumer price index for used passenger cars in Germany.
Deutsche Bundesbank publishes statistics on interest rates and yields for consumer loans relevant to car financing.
FAQ
What is the difference between balloon financing and three-way financing?
Both financing types are characterised by low monthly instalments and a high final instalment. However, with three-way financing you have three options at the end of the term: return the car, pay the final instalment or take out follow-up financing. With balloon financing, the final instalment usually has to be paid in full.
How can I improve my credit rating for a car loan?
Check your Schufa entries for accuracy. Also, if possible, consolidate several small loans into a single one to reduce the number of your creditors. A higher down payment also improves your negotiating position and the loan terms.
Is it more sensible to take out the loan through the dealer or with a bank?
By taking out a loan with an independent bank, you can present yourself to the dealer as a cash buyer. This often gives you greater room for negotiation and can lead to discounts of three to five per cent. However, always compare the total cost of both options.
What loan term is recommended for a car loan?
A shorter term, for example up to five years, leads to higher monthly instalments, but lower overall costs, as you pay interest over a shorter period. Longer terms reduce the monthly burden, but increase the total interest paid.
Do electric cars really depreciate so much?
Yes, current analyses confirm this. A three-year-old electric car has an average residual value of just 51.5 per cent of its new price, whereas a petrol car stands at 64 per cent. This is due to rapid technological advances and uncertainty about battery life.
What does credit-independent interest rate mean?
An interest rate independent of creditworthiness means that all customers with sufficient creditworthiness receive the same interest rate, regardless of their individual SCHUFA score. This creates transparency and makes it easier to compare loan offers.
