What was claimed to be the UK’s largest online car retailer, Autoquake, has called in the receivers.
The company, which was established in 2005, has appointed corporate restructuring specialist MCR to oversee the administration process and search for a buyer.
Autoquake: 1,000 used car sales a month
Sourcing most of its used car stock directly from leasing companies and large fleets, Autoquake claimed to offer used car buyers a deal that was 10% cheaper than even the car supermarkets.
It did this by avoiding the cost of showrooms and associated salesman.
A £100 deposit would reserve a car for you for three days, in which time you could arrange a test drive.
However, with comprehensive online information, including 40 pictures of each car, an ‘honest’ description and a seven-day money back guarantee, customers were encouraged to buy directly from the website.
From locations in London and Leeds, Autoquake claimed to be selling 1,000 cars a month and claimed that more than five million people visited its website each year.
Autoquake demise due to a ‘financing issue’
Autoquake’s CEO, Dermot Halpin, spoke at a Google conference yesterday, saying the car retailer’s demise was due to a financing issue.
He said: ‘We came into the market and punched totally above our weight online.
‘That’s because of the way we approached customer acquisition – it was entirely online, we bought demand inline with inventory, we had acquisition costs of around £90 per vehicle, compared with around £300 per vehicle for our competitors.
‘This caught us out as we grew very quickly – and the economics of paid search are that if you want incremental traffic, you don’t pay incrementally, you pay on all of your traffic. So very quickly it became a very expensive exercise to get more reach in a hurry.’
There are rumours that Tesco plans to move into the car retailing market, and the acquisition of Autoquake could be an easy step for the UK’s biggest supermarket. However, there are no concrete reports to clarify this.
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