Online car retailer, Cazoo, has launched a new subscription service providing consumers with a new car all-inclusive of insurance, maintenance, servicing and tax for a single monthly payment.
The new development follows a recent batch of market research from Cazoo which revealed that 30% of UK consumers are interested in subscribing to a car rather than purchasing it outright or financing it.
Furthermore, some 21% of respondents now have more monthly subscriptions than before the pandemic with 44% selecting subscription services for convenience – 25% stating that it saves them money and 19% highlighting that it helps with budget planning.
Under the new offering, Cazoo offers a range of new cars for subscription terms between 6–24 months, with ordering entirely online and delivery in three days. To give the customer additional flexibility at the end of the contract, they have the option to return the car, switch it for another one or keep it on a rolling monthly contract.
The subscriptions also include insurance, servicing, maintenance, road tax and roadside assistance along with a 1,000-mile monthly allowance and a seven-day money back guarantee.
Alex Chesterman (pictured above), founder & chief executive officer of Cazoo, explained: “Subscriptions offer flexibility and convenience and it is clear from our research that a simple and comprehensive car subscription offering is long overdue.
“The launch of our subscription service allows us to now offer consumers both new and used cars and the flexibility to either purchase, finance or subscribe, all entirely online. This is another step forward in our mission to deliver the best and most comprehensive car buying experience to consumers across the UK.”
Q1 profits hit £3.7 million
The news of the subscription offering follows the release of its financial results for Q1 2021.
In the first quarter, the company made a gross profit of £3.7 million ($5.2 million), which it attributed to operational efficiencies. Revenue reached £113.9 million ($160.7 million), marking a 481% increase from £19.6 million in Q1 2020.
The company achieved 9,762 sales in the first quarter, marking a 373% increase on the same period in 2020 when the company sold 2,062 cars.
Founded in 2018, Cazoo offers a range of used and new cars online in an effort to transform the car buying experience for consumers across the UK and Europe by providing better selection, quality, transparency, convenience, flexibility and peace of mind.
Cazoo’s boosted revenue came in part from a series of recent acquisitions including:
- Drover, which led to Cazoo developing its new subscription service;
- Smart Fleet Solutions, a vehicle refurbishment company;
- Cluno, another car subscription service.
According to Cazoo, it is on course to push revenue to £700 million in 2021 and launch in Germany and France by the end of the year.
Chesterman said: “In Q1 we continued our rapid growth trajectory, delivering record revenue growth of almost 500% year-on-year, demonstrating the strength of our market leading brand and fully-integrated platform in the UK, which we intend to replicate across Europe.
“Our recent acquisitions will enable us to bring our UK vehicle reconditioning entirely in-house by the end of Q1 and to launch the full Cazoo proposition in France and Germany by the end of the year. We are hugely excited by the growth opportunities that lie ahead.”
