Checkaco Consumer News: online used car firm beloved by those who like their next car delivered to the door like an Amazon parcel enters administration
By Rupert Bridgwater: Checkaco has been warning consumers to avoid the online used car company Cazoo due to fears they would go bust. Well now the worst has happened, and the digital only dealership has entered administration throwing into doubt any money paid up front for cars, the invoices of suppliers and lenders and whether they will be paid. Administrators Teneo have sacked more than 700 workers leaving just 200 or so to negotiate the firm’s demise or resurrection if a buyer can be found.
The firm rose to prominence during the pandemic when it was difficult to leave the home and look at used cars at a traditional car lot. Instead Cazoo would deliver your chosen used car to your door like an Amazon parcel. Once the pandemic ended so did their USP and customers once again went out to look at used cars instead.
Pervis Chapel of Checkaco said: “We have had concerns about Cazoo for some time and published a warning to consumers that if they go bust deposits are at risk. If you had run a Checkaco credit check on them last month you would have immediately stopped from buying from them. Never part with cash until you have double checked the firm isn’t about to go bus or have a poor credit rating.”
Things began to go wrong at Cazoo as sales fell away and their ambitious expansion plans to conquer the European market ran into cash flow problems. Plus, spending on deliveries was no longer viable since it was expensive to pay for single trucks to transport a car to just one customer when rivals could simply drive their new vehicle away from a car lot. Add to that trouble at the top of the firm with a change of CEO and the fact the company had never made a profit and it was only a matter of time the business would go bust.
The wider question is whether the business model is sustainable for its main rival Cinch. There have been widespread rumours this year over Cinch’s future is in question after a string of bad news reports from the BBC’s Rip-off Britain programme over defects on the cars they sell to The Consumer Action Group reporting on poor customer service. In the USA Carvana who had a similar business to Cazoo collapsed while rivals Carzam also hit the buffers.
The Daily Telegraph have reported: “Teneo will now seek a buyer for Cazoo in an effort to safeguard its 200 jobs. The company has attracted interest from possible suitors including German car giant BMW, as well as industry rivals Motorpoint, Car Gurus and Motors.co.uk, Sky News reported. Earlier this week, Cazoo’s wholesale arm was sold to rival G3, while other assets including its vehicle fleet have been sold to Constellation Automotive, the parent company of Cinch.”
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