Is my steering wheel fading or is it just grime?

That pale patch at 9 and 3 is almost never UV damage, so you were probly right to hold off on the retrim. Skin oil mixed with road dust and whatever's on your hands after fuelling up builds into a greasy film that actually reflects light differently, so it reads as faded or bleached. The dead giveaway is exactly what you found: a black microfiber after one pass. Real UV fade doesn't come off on a cloth, ever. And grime absolutely can make leather look permanently lighter, even after years, because the oil layer sits on top of the pigment and dulls it. Sometimes it soaks in a bit and darkens the finish unevenly, but the colour underneath is usually fine. The dull spot water won't shift is the dried-on residue, and that's normal. Water alone can't break down skin oils, they're hydrophobic. You need something with a mild cleaner in it. What I do is a drop of gentle soap, like a hand soap or a pH-neutral interior cleaner, on a damp microfiber, work it into the grip areas in small circles, then wipe with a second cloth wrung out in clean water to lift the residue. Follow with a dry cloth. Two or three rounds of that usually shifts years of buildup.

What you want to avoid is anything with solvents or strong degreasers, anything that leaves the surface feeling squeaky and stripped, and never soak the wheel. Saturated leather gets stiff and can crack later. Also skip the armour-all style shiny stuff on the grip zones unless you enjoy the wheel feeling like a wet fish in summer. If after a proper clean there's still an uneven or greyish tone that won't budge, then you're looking at geniune wear of the coating and a retrim or a colour restore becomes worth pricing. But my money's on another couple of passes with a proper cleaner and you'll be amazed at the difference.

I did the same thing with mine a few months back, thought the leather was ruined for good. Turned out my hands were basically painting it with old sunscreen and crisps grease, came off in layers over about a week of little wipes. Thing that surprised me was how much the colour changed day to day, like it kept getting better after I thought I was finished. When yours is all cleaned up, does the wheel still feel the same as before, or does it feel a bit diffrent under the hands?

Second reply nails it about the colour keeping improving after you think you're done, same thing happened on mine. I gave up one evening thinking that was the best it'd get, then next morning in proper daylight the whole grip zone looked a shade darker again. Also the stitching along the seam held way more muck than the flat part of the rim, a soft toothbrush worked over the stitch line pulled out another load of black on my third session. Gave the wheel a proper once over with a barely damp cloth before my commute each day and it was done inside a week.

Not buying 'real UV fade doesn't come off on a cloth, ever' from the first reply. When a topcoat breaks down from sun it goes chalky, and that chalky residue lifts onto a cloth just fine. My old hatchback's wheel did exactly that, greyish powder on the towel even though the colour underneath was genuinely gone. So a dirty cloth proves there's dirt, but it doesn't prove the sun hasn't also had a go underneath. Six years of parking outside, both things can be true at once. Clean it properly first, sure, but if it still looks patchy afterwards don't be shocked that the retrim quote wasnt wasted after all.

Funny how this goes the other way for some of us, my wheel got darker not lighter from years of hand grime, a shiny black ring basically baked on. What finally broke it loose for me was a dedicated interior detailer spray with a short boar's hair brush, the small palm sized ones meant for vents. Spritz the cloth or the rim lightly, work it in with the brush, and the stuff that had gone hard as varnish just let go. Took three sessions over a week. If you find your wheel feels dry and grabby after all this cleaning, a tiny bit of leather conditioner on a cloth sorted that out for mine.