8:39 am, August 27, 2024
As a father of two young children, I watched with the sense of inevitability that only a parent can share, a mum repeatedly telling her daughter to sit still at McDonald’s last week, only for it to end with a Coke flying across the floor and ending over another diner’s feet.
Only painting the rolling-eyes emoji on the surface of the sun would demonstrate the look of pure exasperation on said mum’s face.
I said Cazoo wouldn’t disrupt the used car market. I said Tesco wouldn’t disrupt the used car market. I even said Virgin wouldn’t disrupt the used car market, but they all tried it.
Cazoo didn’t just spill its Coke on the floor, it drowned the floor with ice cream from the McFlurry machine and proceeded to lick every Chicken McNugget in the restaurant and throw them down the toilet.
There has been no sympathy for its demise beyond that which you’d expect for the poor staff members, but a few months on, there are some positives for the overall used car market that Cazoo will leave as a legacy.
Despite championing itself as the dealer for the consumer, it didn’t half sell a lot of tat.
As someone who makes a living predominantly buying cars from private individuals, I can say that Cazoo sold a lot of cars with no or flaky service history and a lot of those cars are being recycled into the market now.
However, as it disclosed all the service history details at the point of purchase, there was no issue for Cazoo post-purchase.
This is also true of its ‘minor imperfections’ appraisal, which highlighted any points of concern to the buyer.
This has meant used car consumers are much more willing to accept commensurate damage than before Cazoo existed.
Granted, it is harder for prestige brands or main dealers to adopt this policy, but providing independents and supermarkets have a Cazoo-like openness to condition reports, preparation costs can be reduced.
(There is a whole other story about main dealers using OEM used car standards to their advantage, but that can wait for another day.)
Fixed-pricing models such as Cazoo’s are also more widely accepted now by used car buyers.
While Auto Trader’s used car price markers were heavily criticised at their inception, they have significantly enhanced a dealer’s ability to fix a price.
A ‘good’ price marker appears broadly acceptable to most used car buyers, even in competitive markets, as consumers accept the independent and less arbitrary nature of price evaluation.
One of Cazoo’s key marketing messages for consumer confidence was its money back guarantee. What it failed to appreciate, though, was that returning a car isn’t the same as returning a pair of jeans.
There is a financial burden to returning a car, whether it be loss of tax, insurance or time off work.
Many mainstream car buyers just want to buy a car and be done with it.
Therefore, if a consumer can find a suitable car with a suitable price marker within a sensible distance, buyers would rather not have the faff and will buy it.
Kids will not sit still and drinks will be spilled.
Disruptors will think they can change the used car market and will be left disappointed.
Dealers who have solid fundamental processes in acquisition, preparation and disposal will continue to succeed.
