Comment: Why does Cazoo wind the motor trade up so much?

There has been little love lost between traditional car dealers and Cazoo, but why is that? Car Dealer editor in chief James Baggott poked around a few Cazoo sites while filming our video special (above) and tries to work out why the motor trade and the online disruptor haven’t really seen eye to eye

Time 7:47 am, April 1, 2022

There are few businesses that provoke quite such a fierce reaction as Cazoo – but why is that? 

Ask anyone in the motor trade what they think of the online used car disruptor and I can guarantee they’ll have at least something to say.

Maybe it’s because they’ve arrived on the scene amid a blitz of publicity and jibes from its founder that car dealers are currently ‘flawed on every level’.

Perhaps it’s the huge budgets it’s been able to splash about – hoovering up motor trade businesses across Europe, blowing millions as it increases its reach.

Or then it could be the fact it’s got even more millions to append its name to pretty much every sport you can think of – premier league football teams, golf, snooker, darts, rugby, horse racing and more have got used to Cazoo branding.

The motor trade has never seen anything like it. 

While traditional car dealers get on with selling cars, Cazoo has told investors it has torn up the rule book as its founder Alex Chesterman aims to change the way it sells cars forever.

I think the real reason Cazoo has riled up dealers is that really they know Cazoo isn’t doing much different to anyone else.

It’s selling used cars online, delivering some to people’s homes and handing others over in car dealerships it bought up from Imperial very early after its launch.

Most car dealers look at Cazoo and compare it to their own set up and ask themselves ‘what do they really do that’s different to me?’

And the answer is – not very much. 

The real difference is the billions it has managed to raise. With a promise to disrupt the used car market not just here in the UK, but across Europe, it has convinced investors to plough in millions.

Shares may have fallen 70 per cent since it launched on the New York Stock Exchange by reversing into an SPAC, but it’s still worth billions while comparable listed dealer groups are worth hundreds of millions.

The big differentiator between Cazoo and the rest of the motor trade, then, is its bank balance.

So is it jealousy? Are car dealers jealous of what Chesterman has managed to achieve in such a short space of time? Maybe.

Since the firm launched in late 2019, I’ve been covering the disruptor’s every move – and pretty much every one of them has provoked a reaction.

It’s the main reason I wanted to produce the closer-look video and podcast into the company that we’ve published on our platforms today. 

You can watch it above and find it on your favourite podcast platforms by searching for ‘Car Dealer Investigations’.

It can’t be denied that Chesterman has done his best to wind up the motor trade. 

Poking it at every opportunity with derogatory comments in the national press, he’s stirred up a lot of hatred for his brand from traditional dealers.

But he probably doesn’t care. He’s made his mark, reportedly cashed out multi millions already and will likely soon be on to the next thing.

We asked Chesterman for an interview for our piece, but he declined. 

That was a shame because there was actually a lot of respect for what the firm has achieved from those we spoke to for the video and it would be good to tell his side of the story.

I’d like to know if he really believes the things he’s said about car dealers. 

Most experts we chatted with were impressed with the way Cazoo has grown so quickly. One of them even labelled Chesterman a ‘genius’. 

No one could deny he’s managed to build a business worth many hundreds of millions more than some car dealers that have been operating for decades.

Inside a Cazoo dealership

Cazoo Centres

For the feature I visited a number of different Cazoo handover centres for filming. We hadn’t asked to film them – it was unlikely they’d have said yes – so we were shooting them from outside.

Most were former Imperial Car Supermarket sites that rebranded after Cazoo bought the business in July 2020 and I couldn’t resist poking my nose around a few of them. 

The first was in Southampton where I popped in and chatted to one of the staff. He didn’t know who I was.

I asked him how it works and he said Cazoo was trying to ‘get rid of the image of slimy salesman’ and make buying a used car easier. 

I joked he must have to know a huge amount about cars to work there too.

‘I don’t know anything about cars,’ he said. ‘But we don’t have to. It’s about guiding customers through the website.’

He pointed me towards a bank of touch-screens mounted in the middle of the sparsely furnished showroom. 

There you could poke around and search the website’s inventory. I tried two of them which didn’t work, but I understand the concept.

He offered me a Coke for my journey. 

‘It’s free,’ he said. ‘It’s like an airport lounge here.’

Cazoo Acquisitions

I continued to wander around. There were little offices set up with TVs and sofas for people to browse the Cazoo website, or work while they wait for their car to be serviced. 

There were few staff. A couple of people were sat behind the reception desk, but there wasn’t much going on.

‘You pick your car online and can have it delivered home or here,’ piped up the staff member as I peaked around the corner where a row of cars were lined up.

‘Those are the ones people have chosen to pick up here and we’ll hand them over when they turn up and explain how they work.’ 

There were four cars ready to go

However, for what many members of the public would think is a car showroom, there was a distinct lack of cars to browse. 

But then that’s not really the point. Cars are supposed to be bought on their website after all, and my visit proved they stick rigidly to that.

I must say I was pretty impressed with the Cazoo centre overall. 

It certainly looked good, was welcoming and I liked the free Coke – but the only difference I could see between it and a ‘normal’ car dealer was that the Cazoo site wouldn’t actually sell me a car if I wanted to drive one away there and then.

If I was a member of the public looking to see a car in person I would have been rather disappointed.

Cazoo handover centre Southampton

Online future

No one in the motor trade will deny that the internet will play a growing role in car sales in the future. 

The pandemic helped push many dealers online that never would have dabbled had it not been for lockdowns.

But pure online car sales taking over completely? I can’t see it and neither could most of the experts I chatted to on camera.

All point towards a hybrid future – one where parts of the sales journey are completed online, and the rest in a physical dealership. 

This gives consumers the best of both worlds, the chance to save time and absorb important information at home and the option to kick the tyres of their potential purchase on a forecourt if they want to.

At the heart of it, Cazoo really isn’t really doing anything that much different to the rest of the motor trade. 

I can’t help thinking that if it hadn’t been for some misguided comments about the rest of the motor trade from its founder, car dealers would have a bit more admiration for what Cazoo has achieved.

James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

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