Plan Insurance Blog

Cazoo, Cinch & Carzam – Motor Trade Three C’s Go To War

A host of new names are entering the used car market with bold claims of “digital disruption.” The UK’s independent dealers oversaw the sale of 8 million second hand vehicles in 2019 in a sector worth £50 billion a year. A very small amount of that business took place online but are things set to change?


Cazoo, Cinch and Carzam are three names that the industry will no doubt become increasingly familiar with. We look into their plans to see whether smaller scale motor traders really have anything to worry about?

Cazoo is the brain child of serial entrepreneur Alex Chesterman, who after Zoopla in property and Lovefilm in DVD rentals, is looking for his third multimillion pound success, this time in the used car market. In October 2018 he founded Cazoo and in December 2019 the company began selling used vehicles online. You may have spotted their adverts emblazoned on Aston Villa’s team shirts?

Less than 12 months after starting to trade Cazoo will achieve its ten thousandth sale. Revenues are already set to reach £150 million and it’s the best funded start up in British history having raised over £450 million, giving it a valuation in excess of £2 billion. In July some of that cash was put to work with the purchase of Imperial Cars sites that will aide Cazoo’s distribution network.

The inspiration behind Cazoo was American business Carvana that Chesterman said “was getting great traction.” After floating in 2017 the used car website’s value has increased by twenty times to $36 billion. Chesterman states that he is, “drawn to the size of the market and the complete lack of online penetration” in the UK. His belief that the market is “broken” and “flawed on every level” will no doubt antagonise his competitors. To support this comment he highlights:

  • Inconvenient processes, with prospective purchasers travelling on average 70 miles to showrooms, lack of options when they arrive and short test drives give the considerable potential outlay
  • Pricing that requires the need to “haggle to get the best deal” 
  • Lack of trust with only passionate petrol heads feeling confident that they aren’t being had over during the transaction. 
  • Gender bias as, “Women feel particularly disadvantaged in the process of buying.”

Cazoo promises to recondition all vehicles, deliver them from its 55 acre site in Corby via 12 regional hubs to a buyer’s home and provide seven days to test their purchase. After which they may return the vehicle for a full refund if they’re not entirely satisfied. He’s even gone to the trouble of ordering specifically designed delivery vans large enough to house a car, in order that the vehicle turns up in pristine condition unaffected by exposure to the elements during its trip. Cazoo’s van will also take away the old car in part-exchange at the same time.

As per traditional traders, revenue comes from the mark-up on the sale, finance commissions along with servicing and repairs. Chesterman anticipates that the pandemic may end up increasing levels of car ownership. He intends to capitalise on people’s desire for car use by introducing a subscription service from Cazoo that for a monthly fee will provide: a car, tax, MOT, maintenance, breakdown and insurance. He believes it will appeal to people, “who want more flexibility and less commitment”.

Cinch versus Cazoo

BCA Marketplace, owner of multiple car auction sites as well as being known for the We Buy Any Car brand, launched Cinch in October of this year. Their online used car platform began with 4,000 vehicles in stock and big ambitions of hitting 70,000 sales within 12 months. The digital approach clearly places it in direct competition to Cazoo. Its backed by a £25 million budget to advertise its launch. Part of this has gone towards a high profile media campaign fronted by former X-Factor contestant Rylan Clark-Neal with the tagline “Cars Without the Faff!”

BCA is certainly the more established of the two companies. In 2019 it achieved £3bn in sales with over 7,000 people employees. The firm was bought by private equity company TDR Capital for £1.9bn in September 2019. Avril Palmer-Baunack, executive chairman said, “The market has to modernise.”

Initially launched last July in partnership with a number of leading dealer groups Cinch was promoted as a jargon-free website that allowed browsers to research suitable vehicles. It promised to generate quality leads and footfall for dealerships and car supermarkets. However, its business plan seems to have altered into being an actual retailer. Though dealers can still partner with the firm and advertise the same vehicles on both their own and the Cinch website in what is being referred to as a ‘virtual showroom extension’. The dealer will receive the sale at wholesale price. BCA explain the benefit for dealers as being that they can satisfy customers requirements minus the ‘overheads associated with holding, preparing and presenting stock’.

Avril Palmer-Baunack was keen to point out that Cinch began trading with 4,000 vehicles listed on its platform, 1,000 more than its main online rival, Cazoo. This would place it 13th in the most stocked used car dealer list according to Car Dealer Magazine. All of Cinch’s refurbished vehicles will be under seven years old and will be available for free delivery in a Covid secure manner. Perhaps in another specific attempt to out-do the competition, customers will benefit from an option to return the vehicle after 14 days compared to 7 at Cazoo. Customers can also WhatsApp the Cinch team to discuss the available cars.

Industry commentators have of course pointed to potential concerns regarding Cazoo’s rise as being the reason behind BCA’s bold initiative. They also highlight that BCA is effectively becoming a direct rival of the dealers that buy their vehicles at auction and sell them to consumers. It’s all part of the radical digitalisation of BCA that is apparently set to include the shutting down of its physical auction houses. During the pandemic over 5,000 traders at a time were heading online to bid for vehicles. Hence the move to take advantage of potential cost savings and efficiencies.

Palmer-Baunack is currently searching for a CEO for the new project. They will certainly have an exciting but significant challenge on their hands.


The final C promising to offer consumers the ultimate online used car purchasing experience is Carzam. The site launched this month and if experience can guarantee success than it should be a sure thing!

Its created by Peter Waddell of Big Motoring World, the multi-award-winning Prestige used Car Supermarket based in Kent, and investment comes from John Bailey, the former International president of Cox Automotive plus Kirk O’Callaghan joins as CEO having been Operations Director at Carshop. So there’s no shortage of industry insight to draw upon.

Waddell believes that customers want to buy used cars “With the same peace of mind and quality treatment as a new car buyer.” Speaking to Car Dealer Magazine, he said, “‘Our difference is not only that we have the ability to source the absolute best used car stock thanks to our vast motor trade experience, but also that we know every single car we sell intimately thanks to our dedicated hub and preparation centre.”

The team certainly have plenty of confidence in the venture. Waddell describes the project as not just another online car ordering and delivery service but a “game changer.” And Bailey believes they are set to “take the market by storm.” With a network of collection points combined with a strategically located distribution centre, the firm is strongly positioned to fulfil those bold claims.

Despite strong competition from two well-backed rivals in the form of Cazoo and Cinch, amongst a host of other online traders, Carzam could well take advantage of the digital transition in the used car market.