Contracts void in Carcraft collapse
Thousands of motorists could be left out of pocket after used car supermarket Carcraft collapsed into administration with the loss of 500 jobs.
Customers who have servicing, MoT, warranty or roadside assistance deals with the Rochdale-based firm will no longer be covered.
Administrators from Grant Thornton said today that they would be contacting affected customers to tell them that all or part of their contract will not longer be honoured.
Joint administrator Daniel Smith added that he would explore whether an alternative provider could provide roadside assistance cover "at a favourable rate to former customers".
The administrator added: "We are currently working to better understand the volume and nature of the impact on Carcraft's customers."
Grant Thornton announced today that Carcraft, which operated 10 forecourts across the UK, would be wound up. It is the seventh largest car dealership in the country.
The firm generated an annual turnover of £120 million, selling 12,000 cars a year at an average price of £9,000 per vehicle.
But Grant Thornton said the business was "heavily loss-making" and had posted annual losses of around £8 million for a number of years.
Mr Smith and joint administrator Joe McLean said it was no longer viable to keep Carcraft going after attempts to find a buyer for the business failed.
Last year the firm was sold in a management buyout led by chief executive Robin Bridge and backed by buyout firm Apollo Ventures.
The business was sold by brothers Darren and Noel McKee, who also founded Webuyanycar in 2006 before selling it last year.
Grant Thornton automotive advisory partner Tarun Mistry said: "The business model has failed to evolve with the changes in the used vehicle remarketing sector and regulatory environment.
"Overall, this sector is still vibrant and represents a significant opportunity for the appropriate operating model to benefit from the growing and changing used vehicle market."
Administrator Mr Smith added: "With great regret a conclusion was reached that it is no longer viable to keep Carcraft in operation. In order to prevent further losses it has been agreed with management and creditors to cease operations with immediate effect."
He said the business would retain a skeleton staff to help with selling off the assets.
Carcraft's sites across the country include forecourts in Rochdale, Sheffield, Leeds, Enfield, Trafford Centre, Newport, Lakeside, Chertsey, Chester le Street and Wednesbury.
Carcraft customers who want more information should call its helpline on 0800 923 9495 or email email@example.com.