back to top

How does Cazoo work?

how does cazoo workCazoo, the UK’s leading online car retailer, is based in London, England. It was founded in 2018 by Alex Chesterman, a serial entrepreneur. It has a highly experienced management team and is supported by some of the leading global technology investors. The company is one of Europe’s fastest-growing digital businesses, growing 300%+ each year, with expected 2021 revenues approaching $1 billion. Cazoo is on a mission to transform the car buying experience for customers across Europe by offering vast options, better quality, transparency, convenience, and peace of mind. Its services make buying a car as simple as any other online purchase today. Here, consumers can simply purchase, finance, or subscribe to a car completely online with delivery or collection in just the next 72 hours. In this article, we will be diving deep into the Cazoo business model and try to get in-depth answers to the most asked query- “How does Cazoo work?”.

Cazoo Business Model

A larger number of people today are opting to use their own cars instead of taking public transportation in the UK as a way of ensuring COVID 19 protocols. Taking the advantage of this requirement, one of the startups in the UK has built a more efficient way of selling and buying cars online in an easy way. This startup is named Cazoo and is backed by huge funding.

Cazoo has a world-class team of over 2000 people across the UK, Germany, France, and Portugal which is led by Founder and CEO, Alex Chesterman. The Cazoo team is passionate about delivering a great customer experience. The company offers a web and app platform to allow people to browse and buy used cars. Also, people can easily sell out their own cars on this platform. The company sells used cars online and delivers the order to the buyer’s door with a seven-day money-back guarantee.

The Chief Customer Officer of Cazoo, Dareen Bentley is on a mission to create a mass appeal brand that brings trust and transparency to the used car market. To accomplish this, he is aiding a comprehensive marketing plan with high-profile investment in TV and outdoor.

“The best way to build a brand is to have a campaign led by TV, supported by highly targeted performance marketing.” – Darren Bentley, Cazoo

On 29 March 2021, Cazoo Holdings Limited and AJAX I, a publicly traded special purpose company, announced the signing of a business combination agreement.

AJAX is an $805 million (around €684 million) SPAC, founded by renowned US investor Dan Och in partnership with Glenn Fuhrman and a team of diplomatic advisors including the founders of Chipotle, Instagram, Square, and 23andMe. Upon closing of the deal, the merged company will be named Cazoo and will be listed on the New York Stock Exchange under the new ticker symbol “CZOO”.

This agreement will help Cazoo to boost its performance as it continues to transform the car buying experience for customers across Europe. Cazoo is launching a shift to online car buying in Europe and since being founded in 2018, the company has successfully delivered over 20,000 cars to consumers across the UK who applauded the work process and services of the company because of the transparency and convenience of buying the quality of used cars that too entirely online.

Alex Chesterman OBE, Founder & CEO of Cazoo, commented: “This announcement is another major milestone in our continued drive to transform the way people buy cars across Europe. We have created the most comprehensive and fully integrated offering in the largest retail sector which currently has very low digital penetration. This deal will provide us with almost $1 billion of further funds to fuel our growth and I am delighted to be partnering with Dan and his team at AJAX to rapidly expand and deliver the best car buying experience to consumers across Europe.”

Dan Och, Founder of AJAX said: “We are incredibly excited to have the opportunity to partner with Alex and the exceptional team at Cazoo. Alex has proven to be one of Europe’s most successful serial entrepreneurs and we are proud to be supporting the growth of this world-class team, brand, and platform. With their constant focus on innovation, data, and customer satisfaction, I have no doubt that Cazoo is going to continue to lead the way in this massive, untapped market opportunity, and am looking forward to joining the Board of Cazoo and working with Alex and his team.”

Daniel Sundheim, Founder & CIO of D1 Capital Partners said, “As a long-term investor in Cazoo and believer in its leadership team, we are pleased to continue supporting Cazoo’s growth as a public company. While Cazoo had many options for funding its strategy, its decision to merge with AJAX and join with Dan Och and other renowned partners was a good one that will have positive implications for the company and its future.”

Since Cazoo’s recent acquisition, it has now become Europe’s leading car subscription player with over 6000 subscribers across the UK, France, and Germany. It has developed a market-leading online platform and trustful brand with a fully integrated model where it owns and recognizes all the used cars before offering them for sale on the website. The company has already begun its international expansion as it seeks to overpower the used car retail market, digitally.

Used cars is the largest retail market with a total size of £500 billion across the UK and Europe. As per experts, Cazoo is expected to achieve revenues approaching $1 billion in 2021 which is a growth rate of more than 300%. With the unique customer offering and fully integrated digital business model, Cazoo is well-positioned to take advantage of the people’s preference to make purchases online and to disrupt the huge European used car buying market/ new car buying market.

Company values

Cazoo aims to make the buying process of your next car no different from ordering any other normal product online where consumers can simply and seamlessly choose from hundreds of options and order their favorite choice. People can easily buy, finance, or subscribe to a car entirely online at Cazoo. The delivery or collections is also very fast i.e., as little as 72 hours. The company works to provide the best online experience to its customers. To do that, Cazoo stands by its key values. These are as follows:

  • Customer obsessed – The company (Cazoo) puts its customer first in everything they do. They aim to be famous for delivering the best experience and wowing our customers.
  • Data-driven – Cata is part of the company’s DNA and drives all decision-making. Cazoo is informed, results-driven, and seeks insights to help the company improve and grow in the future.
  • Fast drivers – The company has an entrepreneurial passion for working at speed. They move fast and drive fast towards our goals.
  • Team players – They are better as a team than as individuals. Everyone counts.

Value propositions

Cazoo is supplementing core propositions to its customers with subscription prices. It has already become the largest car subscription player with 6k+ subscribers. The subscription service is increasing the total addressable audience and market of car buyers.

  • Single monthly payments
  • Flexible and Convenient usage
  • All-inclusive (Insurance, servicing, tax, and breakdown cover)

The shift of car buyers offline to online due to COVID-19

Today, 64% of consumers are now preferring to buy a used car that too online. This shift to online preference will continue and be permanent given poor legacy experience. The offline incumbent’s activity has now been permanently impaired because of high costs, limited online presence, and lack of brand awareness. Talking about the car ownership then, 44% of public transport users have reduced or are stopping the use because of the fear of COVID-19 spread, and 48% of ride-sharing and taxi users have reduced.

Cazoo has adopted a comprehensive approach towards marketing

  • Excelling in brand leadership
  • Provides retail only online
  • In-house refurb/ logistics
  • Fully digital finance
  • Market-leading NPS
  • National coverage
  • Delivery and Collection
  • Post-sales servicing
  • Subscription offering
  • New car supply

Features of Cazoo Business Model

  1. Cars at a great value: Cazoo platform offers a wide range of high-quality used and new cars.
  2. The entire buying process is online: People can buy new/ used cars entirely online from the comfort of their homes.
  3. Efficient and easy Delivery/ Collection: Cazoo provides home delivery or collection in as little as 72 hours, any day of the week.

Cazoo Advisors

Credit Suisse International, Goldman Sachs International, Numis are acting as lead financial advisors to Cazoo whereas Freshfields Bruckhaus Deringer is acting as a legal counsel to Cazoo.

Who are Cazoo’s investors?

To date, Kazoo has successfully raised a total amount of $557 million in funding over 6 financial rounds. The company is funded by 20 investors. Out of these 8 are lead investors. Their latest funding was raised on 1 Oct 2020 from a Series D round. Durable Capital Partners and General Catalyst are the most recent investors of the company.

Some of the popular Cazoo investors’ names include:

  • Durable Capital Partners
  • General Catalyst
  • Fidelity Management and Research Company
  • Dmg investors
  • D1 Capital Partners
  • Sapphire Ventures
  • BlackRock
  • L Catterton
  • Mubadala Capital | Ventures Europe
  • The Spruce House Partnership

According to Crunchbase, Cazoo has acquired 4 organizations in total. The acquiree names are as follows:

  1. Cluno
  2. Smart Fleet Solutions
  3. Drover
  4. Imperial Car Supermarkets

Cazoo’s most recent acquisition was of Cluno on Feb 23, 2021.

How does Cazoo work?

Now that you have got an in-depth understanding of the Cazoo business model let’s move on to understand “How does Cazoo work?”.

Cazoo is an online platform where people can buy, finance, or subscribe to their next car that too completely online, from the comfort of home. Quality is guaranteed in all the cars that Cazoo owns because the used cars as well as the new subscription-based cars are reviewed intensively before publishing on the website. Along with that, in subscription-based cars, the repair, maintenance, and insurance lies on the shoulders of the company itself. Let’s discuss the product and services that Carzoo offers:

  1. Used cars to buy or finance: If you are willing to buy a used car from Cazoo, you can choose to buy it outright or apply for finance and sign the agreement online. The company offers a range of finance deals from its panel of leaders that gives a decision within minutes. It’s all upon you to choose the best financial deal that fits you.

Car finance can be done in two ways: Hire purchase (HP) or Personal Contract Purchase (PCP). With HP, you have to pay each month but at the end of the agreement, you own that car. It allows you to spread the cost of the car by making monthly payments over an agreed term. HP is the right option if you want to buy the car at the end of the agreement.

However, with PCP you pay fewer fees each month, and at the end of each agreement. It is a financial plan where one can make qual monthly payments over an agreed term with a larger final repayment due at the end if you decide to keep the car.

At the end of the agreement, you have 3 options:

Either you can give the car back or trade it in for a new agreement or if you want to keep that car, you can pay the final repayment, and it’s all yours.

Here is the list of advantages of financing your Cazoo car:

  • Annual percentage rates start from as low as 8.9% representative
  • The financial decision given within minutes
  • Work proceedings are completely online, from the comfort of home
  1. Subscription for a new car: Cazoo offers a new alternative to car ownership and leasing. You have an option of subscribing to a new car and payout its fully flexible monthly fees. All you need to care about is the fuel of the rest is taken care of by the company itself such as the servicing, maintenance, tax, and insurance. The subscription plan offers more convenience and flexibility as compared to car leasing. The best part is that there are no huge amounts of payments and your deposit is refundable. This monthly fee covers all your extra maintenance costs, you get fully comprehensive insurance, servicing, and maintenance, road tax, 24/7 roadside assistance, 1000 monthly miles ( Cazoo has flexible mileage options too), also you can add up to two additional drivers. All this is managed using the Cazoo Subscription app.
  2. Quality is guaranteed at Cazoo: Cazoo buys and sells only those cars which meet its company’s high standards. Each car completes a 300 point inspection and is fully reconditioned before appearing on the Cazoo website. Ever Cazoo car has never been stolen or encountered a major accident, has outstanding finance or insurance papers, and it clearly shows the number of previous owners. Before being published on the website, a car goes through a thorough inspection in Cazoo’s dedicated Vehicle Preparation Centres where technicians check everything from the car’s engine, brakes, and suspension to the electrics, sat-nav, and much more. After checking, the company spends hundreds of pounds on reconditioning the car to meet their high standards by fixing the imperfections. Once all this is done, the car goes through a 360 degrees photo session where every detail is captured to be showcased on the website. After all these procedures, the technician test drives the Cazoo car to check engine performance, steering, and brakes. If he still discovers any other imperfection, they won’t sell the car anymore.
  1. Cazoo car care:

Extended warranty- Every used car at Cazoo comes with CazooCover that protects you from any unexpected expense after the 90-day warranty has ended. Its price starts from £299 a year.

  • Cover for mechanical and electrical parts
  • 24/7 recovery breakdown from RAC
  • Car hiring and much more

CazooGuard Paint & Fabric Protection- It protects is a one-time coating that protects your car’s interior and exterior from day-to-day dirt and spills. This costs a one-off payment of £199.

  • Exterior protection: Protects the car from pollution, paintwork, and fading
  • Interior protection: It keeps the leather or fabric seats and car’s carpets safeguarded
  • There is a lifetime guarantee of smooth and invisible coating on the car.

How To Launch Business Similar To Cazoo?

If you are willing to launch an online car retailer platform similar to Cazoo, Ncrypted Technologies has the right solutions developed by our capable and innovative workforce. We offer customized and innovative features as per your requirement to let you launch a successful online car retailer platform.




Tejas Joshi
Tejas Joshi
Exploring Marketing World

Related posts

Healthcare App Development: The Complete Guide You Need to Know about HealthTech Apps

In today's digital age, healthcare app development is revolutionizing the medical industry. These apps offer a range of services that improve patient care, streamline...

Food Delivery App Development: Everything You Need to Know in 2024

In the age of convenience, food delivery apps have revolutionized the way we order and enjoy meals. Developing a food delivery app requires a...

How does Instacart make money? Powerful guide you need to know about Instacart business model

In today's busy world, convenience is more important than ever. Instacart steps in as the top platform transforming the way people buy groceries and...


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Building a Startup?

Contact our expert team for a no-obligation proposalContact NCrypted