If you want to buy a second hand car, you have a number of options. The classic one is to head to a dealership and see what they have to offer. Alternatively, you can look online or try car broking. There is a well established offering here, so people can find what they are looking for.
One of the most interesting ways to buy a used car between 2019 and 2023 was to use Cazoo. They launched an online platform where people could do everything, including buying and selling. Their goal was to shake-up the industry, giving people an alternative to working with traditional dealers.
Early success
Initially everything was looking great for Cazoo. The value of the company soared, reaching $7bn in 2021 when it was listed on the NY Stock Exchange.
A big part of the early success of the company was the restrictions stemming from the Covid pandemic. It meant that people could not go to dealerships and buy used vehicles the traditional way. As a result, a service where buying and selling could be done entirely online was perfect. People could buy and sell vehicles without having to leave their home, arranging delivery or collection.
Cazoo also did a really good job early on of building brand recognition. By 2021 you could see their name everywhere. A major part of this was sports sponsorships. They got into everything from rugby to horse racing and golf, including sponsoring many major events. Football was also a massive market for them, with shirt sponsorships for Everton, Aston Villa, Marseille, and Valencia among others.
Downfall
Sadly, while there was a great feeling around Cazoo at first, it did not last. The company reportedly never made a profit. In fact, it had massive issues with losses, recording £544m in 2021 and £704m in 2022. The value took a nosedive, losing over 97% and falling to $30m.
With covid restrictions easing, people could go back to buying and selling at dealerships, choosing car broking, and other ways to buy and sell cars. In addition, many dealers chose to launch their own e-commerce services, emulating what Cazoo was offering.
Another issue was Cazoo chose to expand into Europe in 2021. They began offering services in Spain, France, Germany, and Portugal. However, this has been blamed as the company expanding too far.
Sadly, they had to make redundancies in 2022 and had to close services in Europe. They then had to close showrooms across the UK and make further redundancies in 2023.
In March 2024 Cazoo moved away from the buying and selling model, instead offering an online marketplace. However, it did not save the company, and earlier this month they went into administration. It is likely now that they will cease to exist.
On the bright side, Cazoo’s impact on the market is easy to see. Sadly, the business model was not sustainable and it will always be difficult for new players to take on established dealers. Cars are also different from other goods in that people will generally always want to have the chance to see them before they commit to buying.
Step into the world of car broking
While it is tricky for new businesses to find success here, one type of business that can do well is broking. Dealers need to source vehicles to fill their forecourts and fulfil orders. Sometimes they need some help to do this. That is where a broker can come in. They can handle the vehicle search then report suitable vehicles to the dealers. The latter can then negotiate a deal and, if successful, will pay the broker a fee for their service.
If you want to find out more about car broking, you can have a look at our website. Then, if you want to give it a try, we can help you with our fantastic products. You can also contact us if you have anything to ask us.
