If Cazoo go bust how will it affect secondhand car prices?

[Mrinsignia]

Just thinking out loud, if Cazoo go bust how will it affect second hand prices. Would It be absorbed by big companies or dump loads of cars into auction for smaller dealerships, or are there other alternatives?

[MitchT]

There'll be the same number of secondhard cars overall and the same number of people wanting, or not wanting, secondhand cars overall, so I suggest it'll make sod all difference.

[KTMsm]

^^^ I agree

[Macron]

There won't be a firesale. There won't be anyone employed to do the selling.

They've also got £250M cash apparently, which is a decent runway to burn it all.

They're saving by slowing expenditure and consolidating sites. They can save more by slowing stock acquisition. Easy enough by making unattractive offers to prospects. They'll show as still in the game, just offering low sums, so won't bring in new cars. It's a fairly easy way to balance things really.

[vikingaero]

They have access to around 10,000 cars under their subscription service that they are culling. Obviously those customers have had cheap cars from Cazoo and may need to buy back those cars to stay mobile. Cazoo aren't cutting all Subscriptions overnight, but send out a certain number of emails each day to manage the flow of returns. I imagine the Cazoo brand will be dead to those 10k people.

[DonkeyApple]

Mrinsignia said:

Just thinking out loud, if Cazoo go bust how will it affect second hand prices. Would It be absorbed by big companies or dump loads of cars into auction for smaller dealerships, or are there other alternatives?

It's an interesting question. In the immediate aftermath it depends on how aggressively the stock is liquidated. What you might expect is for the stock to get stuck for some time but administrators are much more savvy these days so it would be unlikely they would simply dump the stock in a fire sale but instead first look to the debt holders to wipe out the equity holders, stump up more debt as the new shareholders and relaunch the business using what's left of the stock, premises and some of the staff. If none of the debt holders want it then they'd probably approach the other major vendors in the market for offers on tranches of the stock etc.

Longer term, it's one fewer big seller of used cars which ultimately makes retail pricing less competitive.

All in, I'm not sure one would expect their going into administration to suddenly flood the market with a load of very cheap stock which then knocks the market overall as the remaining sellers get forced to discount to momentarily compete.

[macron]

Are you OK DA?

That was a year old thread you replied to despite the main one being bounced (by me!) Like yesterday, lol!

https://www.pistonheads.com/gassing/topic.asp?h=0&...

[DonkeyApple]

macron said:

Are you OK DA?

That was a year old thread you replied to despite the main one being bounced (by me!) Like yesterday, lol!

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Just going slightly mad. Clearly.

[ACCYSTAN]

If your the liquidator, you would try and do a deal with one of the big outlets like motorpoint or Cinch and do a deal to sell them the entire vehicle fleet.

[DonkeyApple]

ACCYSTAN said:

If your the liquidator, you would try and do a deal with one of the big outlets like motorpoint or Cinch and do a deal to sell them the entire vehicle fleet.

Yes but the discount would need to be very large for a single entity to want to disrupt their own flows. And the most obvious and possibly only big outlet that would want all the Cazoo stock will be Cazoo Mk2. Conversely, you more typically invite selected bids on tranches of stock so that multiple large competitors take not just the number of units they want to put on their books but the type.

Ultimately, Cazoo's administrators may find that few want to bid at all as all that stock stuck off market isn't bad for anyone's business but also Chesterman has forged a reputation of paying the biggest money for the worst examples. A company buying a block of stock could swamp their own ability for preparing stock for sale.