Cazoo, a new platform transforming the purchase of used cars, has launched recently, having raised an additional €29 million of funding, consequently breaking the record for pre-launch funding at over €90 million. Funding was led by venture capital firms General Catalyst and Mubadala Capital, and will be used to both grow the team and further invest in marketing and operations.
Cazoo, founded in 2018, aims to transform the way people buy used cars in the UK by providing better selection, transparency, convenience and peace of mind. They aim to make car buying no different than buying any other product online today, where consumers can simply and seamlessly purchase a used car entirely online and have it delivered to their door in as little as 72 hours. With no forecourts or sales people, Cazoo passes the savings on to its customers, effectively ‘Amazon-ing’ the used car market.
Cazoo is the latest venture from Alex Chesterman, who previously founded LoveFilm and Zoopla, and is set to transform how 8 million used cars are bought each year by putting the entire process online and offering home delivery, much like buying any other product today.
Buyers can inspect high quality, 360-degree images from the comfort of their home as well as the cars features and history. Prices are fixed, so there is no haggling and customers can simply and seamlessly purchase or finance a car entirely online and have it delivered directly to their door in as little as 72 hours. Every car comes with a 7-day money-back guarantee, destined to replace the traditional 7-minute test-drive around the block. And if customers don’t love their car, Cazoo will collect it for free, no questions asked.
Cazoo cars must pass a thorough 150-point inspection and have been fully reconditioned before being sold. All cars have recent MOTs, full-service history, 7 days free insurance, a free comprehensive 90-day warranty and RAC roadside assistance. Cazoo offers all standard forms of car financing as well as collecting any part exchanges at the time of delivery for added convenience.
Alex Chesterman, Founder & CEO of Cazoo said: “Used cars are one of the last remaining consumer markets yet to benefit from any digital transformation. Cazoo makes used car buying simple and convenient like buying any other product online today. We take away the need to travel, to haggle, to spend countless hours at a dealership and to risk any buyer’s remorse. With Cazoo, you can purchase or finance a used car entirely online, have it delivered to your door in as little as 72 hours and have 7 days to make sure it fits your lifestyle. And if you don’t love your Cazoo car, we’ll come and collect it for free.”
Insurance Edge Comment;
It is a tempting concept, but it faces one big hurdle; the tricky issue of taking a PX vehicle. Most used car buyers already own a vehicle and if the only way to sell it quickly is to let Cazoo `collect’ it for a sum below market value, then some will not make the step up the car food chain.
Cazoo has to offer a fair and transparent online valuation service – and make that price stick to within say 5% or £500. Fact is, buying a car is the second biggest purchase that most people make every few years, bar a luxury holiday or second property. The deal has to be right for both sides and vehicles need to be inspected professionally to arrive at fair market values.
Then there’s the tricky issue of people renting, or leasing cars, not buying them. Especially woke city kids, who see car ownership as somehow `evil.’ How do you sell used cars to them? Maybe younger people want PAYG rideshares, not a car that sits on the drive depreciating by the week? Perhaps owning a car in a city by 2025 will incur a daily toll, branded a green ULEZ charge, and that may put urban dwellers off the whole idea of owning a vehicle, whatever bells and whistles come with the deal?
Big questions ahead, and that’s without the revolution that is well underway in car insurance as PAYG via smartphone replaces boring old Fully Comp.