So, after months of speculation, it has happened. Tesco is taking us on and I, for one, am not worried in the slightest. The talk of Tesco bringing about a revolution in the used car world is nonsense.
Can anyone remember Virgin Cars? Do Chevrolet still sell from Halfords? No. This business is unique. Tesco is just Carsite rebranded. Carsite operated in a similar fashion to the recently departed Autoquake.
For those who are not aware, essentially TescoCars.com will be a remarketing channel for leasing companies who are able to return improved residuals on end of contract cars. The benefit to Tesco will be a handling fee but most importantly the opportunity to up-sell finance and insurance.
In theory the buying process is easy, effective and allows Tesco to tap into the millions of customers they have stored on their database. So why am I not worried? Well, because the purchase process allows for no test drive, no inspection or no part exchange. Three of the most fundamental parts of the used car buying decision. I know there are descriptions and virtual test drives and this will be good enough for some buyers, but enough to change the market? I think not.
‘The talk of Tesco bringing about a revolution in the used car world is nonsense.’
The used car business has, is and always will be about the cars. They are unique, one of a kind. After a week of ownership from new, no two identical cars will ever be the same again. Therefore, Tesco will only ever be as good as their stock, which in their case is limited purely to ex-lease, Motability returns and daily rentals.
Then there is the post-purchase experience. I thought the website was a little ambiguous but from what I gather there is a seven-day cooling off period. If you don’t like the car just send it back, less your £99 deposit plus the delivery fee. Great from a customer’s perspective but what will leasing companies think when they have had a car returned three times and are still awaiting payment? You can never understimate the power of being a local garage in a local town. If you have the same car as Tesco (it may even be £250 more), the fact that the person can touch, feel, drive and part exchange their car will be enough to make it a futile exercise.
Who is James Litton?
James runs theinternetcarlot.co.uk. He’s been in the business for 12 years and always has something to say about the industry he loves.