Dealers say that limited potential for online-only motor retail was the top reason for the collapse of Cazoo, according to Startline’s July Used Car Tracker which questioned 62 dealers.
Half of dealers surveyed said online-only was a problem, followed by 37% who said investors overestimated efficiencies that could be accessed through technology, and 35% said they failed to recognise that existing dealers were already good at selling online.
Paul Burgess, CEO at Startline Motor Finance, said: “The picture suggested by our research suggests there was a mixture of circumstances and a general misreading of the market by investors.
“Dealers believe that while the impact of Covid could not be foreseen, the market for online-only retail and the potential for new technology were overestimated, and the strengths of existing dealers were underestimated.”
23% felt that existing retailers raised their game in reaction to Cazoo and other online-only market entrants, and 23% said that Cazoo underestimated the strength of existing dealers.
Burgess said: “Perhaps the most interesting single response is that almost a quarter of dealers say the arrival of Cazoo caused others in the market to improve their online proposition. So, while the business may ultimately have been a failure, it has been arguably good for the sector.”