Checkaco Consumer Retail News: Cazoo deny they will go bust this year as customers fear losing their money
By Harry Mottram: There have been consistent media reports that the online car dealer Cazoo is in serious financial trouble sparking fears they could be insolvent by the end of the year. That spells major worries for customers who use their home delivery service for used cars since Cazoo insist on payment up front once you’ve chosen a car online. The car is then delivered to your home. If the worst happen and Cazoo did go bust then anyone who has paid for their car and is awaiting the delivery of their vehicle may lose all their cash and still have no car.
Reading the reviews online they tend to fall into two categories. Five stars from ecstatically happy customers which may or may not be genuine and one-star reviews from customers who were unhappy with faulty cars or poor after sales service. Essentially Cazoo are a second-hand car dealer – if you buy from a used car lot in your area you can take the car back to the seller and face them in the flesh – but online that is more difficult if there’s a problem. If for instance the financial situation for the company was to get worse the first thing most firms do is to make savings such as cutting staff – that too spells issues for customers. This is of course hypothetical but with numerous media reports of problems including the Daily Telegraph reporting on Cazoo’s difficulties it is best to be cautious.
In response to the Daily Telegraph’s story Cazoo issued this statement: “As we have made clear in our SEC filings, we have commenced an evaluation of potential partnerships, synergies, mergers, acquisitions, joint ventures and sales in the light of our improved capital structure.”
The firm started in 2018 selling used cars online in the UK and did well during Covid when customers couldn’t easily get out and look at used car lots. It is listed in America on the New York Stock Exchange following a deal with acquisition outfit run by Dan Och. Its founder Alex Chesterton quit soon afterwards when its value collapsed. It made an abortive attempt to expand into Europe but since 2022 has pulled out of France, Spain, Italy and Spain making hundreds of redundancies in an attempt to slash costs.
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