In a market saturated with choice, consumers want clarity and ease when making a purchase that will best align with their needs. The automotive industry is a good example of where comparing products and deals is of great value. Traditionally, customers wanting to purchase a new or used car would shop around at different dealerships to assess their options and then spend time deciding what to purchase and how to sell their old car. A number of new players have been disrupting this business model and the marketplace for car sales is heating up. Cazoo, which helps people buy and sell cars, achieved unicorn status in 2020, and yesterday Motorway announced a Series B fundraise of £48m. In breaking news, carwow, which is a car buying comparison leader, has also just announced their acquisition of digital used-car-buying platform, Wizzle.
Making the car buying and selling process seamless and cost-efficient for dealers and customers has been needed for some time. It seems that carwow and Wizzle’s integration will provide a welcome solution.
carwow was launched in 2016 by James Hind, as the world’s first new car comparison site, with the mission of making the process of purchasing a car easier and simpler for consumers. Since then, the company has 12.5million car buying users and has sold over £5 billion worth of cars from the largest manufacturers, dealerships, and franchises in the UK, Spain, and Germany. Customers are able to search for and compare cars and offers from dealers on carwow’s site or app and then purchase directly from dealers. The company has been backed by leading technology and automotive investors including Vitruvian Partners, Balderton Capital, Accel, Episode 1, and Daimler. Wizzle, on the other hand, is a digital platform where consumers can list their current car, compare offers from dealers who wish to buy their cars, and sell directly to their chosen dealer. The company was set up by Sébastien Duval and now has more than 2,000 dealers using their platform, who are buying more than 1,500 cars per month.
As both companies work on different sides of the consumer marketplace, this acquisition makes perfect sense. carwow’s users will now be able to find their dream car and also sell their old car, all in one place and from the comfort of their homes. carwow plans to integrate Wizzle’s used car selling service into its new car buying experience. In doing so, they will be able to provide multiple offers to customers and prioritise offering cars to dealer partners directly. Hind states that “partners have told us that they want better direct access to high quality used car inventory and this acquisition will allow us to do just that quickly. Wizzle is already powering over 1,500 vehicle sales per month, which we’re aiming to grow exponentially by integrating the service into the main carwow platform.” Duval, also expressed his enthusiasm at the acquisition, explaining that “With carwow’s reach, scale and the expertise of its 245 person team, we’re in pole position to build the biggest used car aggregator in the market, providing dealers with easier access to more in-brand, local and quality cars…Our companies are two sides of the same coin, with the shared vision to deliver trust, transparency, and high-quality services that gives dealers an advantage in the digital world.”
Dealers will also benefit as they will be able to buy used cars directly from carwow’s 12.5 million users, 79% of which have a used car. Additionally, carwow has developed a new pricing model, which means dealers that are buying from and selling to the same customer will only pay for a new car enquiry.. According to Hind, this gives dealers “the best of both worlds; if they’re buying and selling to the same customer, they pay the same enquiry fee they’ve always paid.” Partners will also get fee-free access to a buyer’s vehicle if they also sell them a new car on the platform. Furthermore, carwow’s reach of 130 million views per month across Youtube will provide dealers with access to a large volume of high-quality used cars that they can buy directly.
The acquisition is big news for the UK scaleup, which has a wide audience and customer base. In comparison to Motorway, carwow has approximately ten times more monthly visits. This is positive for the automotive industry that has been badly hit in recent years due to Brexit and Covid-19. Making the car buying and selling process seamless and cost-efficient for dealers and customers has been needed for some time. It seems that carwow and Wizzle’s integration will provide a welcome solution. It remains to be seen what this means for incumbents and whether they can innovate in line with changing customer requirements.