Online used car retailer Cazoo is winding down its sales operation and will reorganise itself as a cars for sale website, according to reports. The move could leave tens of thousands of Cazoo’s customers facing uncertainty over their finance packages and warranties.
Since it was in founded in 2019, Cazoo has become a familiar name to many UK car buyers. It aimed to shake up the car sales industry, allowing customers to buy a car entirely online, including arranging finance and dealing with a part-exchange. The company expanded rapidly, setting up in-house car preparation and maintenance facilities and opening impressive customer centres. It even attempted to break into European markets.
Cazoo’s home delivery service proved popular and it quickly became one of the UK’s largest used car retailers. It also forced other large car retailers to introduce online sales. But Cazoo always faced financial difficulties and had already significantly scaled back its operations. It’s now reportedly facing closure if it doesn’t refocus – and ending car sales could save it from going under.
So, what do Cazoo’s troubles means for it’s tens of thousands of customers?
I bought a car on finance from Cazoo – how am I affected?
Cazoo provides a range of finance options to buy a car from its website, however Cazoo itself isn’t a lender. Instead, it works with finance brokers that find the best deal for an individual customer from one of dozens of potential lenders.
So, if you bought a car on finance from Cazoo, its cessation as a sales operation doesn’t affect you directly. It merely connected you with the company that lent you the money. If you’re not sure who your lender is, its name will be at the top of your finance agreement. You’ll also find it on your bank statement.
My car has a Cazoo warranty – how am I affected?
Cazoo provides 30 days of warranty coverage on every car it sells and offers extended warranty plans that can last several years. If your car is covered by a Cazoo warranty, you may now be wondering if you’ll be left in the lurch if it needs repairing.
Fortunately, Cazoo doesn’t actually provide warranty coverage itself. Instead, it connects customers with a third-party warranty company that covers the cost of repairs. Any RAC-approved garage can carry out the work. As such, Cazoo ending car sales won’t affect its customers’ ability to have their car repaired under warranty.
Having said that, the process for making a claim may change if Cazoo closes its dedicated warranty phone line. Customers should watch out for any communications informing them of any changes.
What this means for you
You could grab a bargain. A look at Cazoo’s website suggests that it’s in the process of clearing its stock of used cars. From a peak of more than 7,000 cars available to buy in 2021, there were just 800 available at the time of writing. A banner at the top of the homepage indicates that many cars have been reduced in price, so you may be able to pick up a bargain.
There shouldn’t be any issues in securing finance from Cazoo at this point – as discussed earlier, Cazoo merely connects its customers with lenders. Similarly, there are unlikely to be any issues in getting warranty claims honoured.
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