Cinch: Revolutionizing the Online Used Car Market

In 2020, the motor trade witnessed a seismic shift with the emergence of online used car dealers. These new players, armed with catchy names and glitzy advertisements, quickly captured the attention of consumers. While Cazoo’s rise and fall dominated headlines, another significant player that emerged was Cinch, backed by the esteemed Constellation Automotive Group. Launched in 2019 as a classified website, Cinch has since transformed into a direct seller of used cars, disrupting the traditional dealership model. In this article, we delve into the rise of Cinch, explore its innovative approach to car sales, and examine its profitability.

The Cinch Difference: Cars without the Faff

Cinch’s marketing strapline, “cars without the faff,” succinctly captures its mission to simplify the car-buying process. The company’s website boldly claims to remove all the hassle for customers, making it easy to find, buy, and own the perfect car. With a strong focus on customer confidence, Cinch offers a range of assurances, including a six-month MOT with no advisories, a 90-day free warranty, three days’ free driveaway insurance, and a 14-day money-back guarantee. While these guarantees are standard practice in the UK, Cinch aims to provide a seamless and worry-free experience for its customers.

The Constellation Automotive Group Connection

Cinch is part of the Constellation Automotive Group (CAG), a powerhouse in the industry. CAG boasts a portfolio of brands that includes BCA, WeBuyAnyCar, and the renowned Marshall Motor Group. This strategic alignment allows Cinch to tap into a vast network of used cars, giving customers access to a wide selection of vehicles. By leveraging the resources and expertise of CAG, Cinch has positioned itself as a formidable player in the online used car market.

Cinch’s Evolution: From Classified Website to Direct Seller

Cinch began its journey in 2019 as a classified website, partnering with dealers and used car supermarkets. The platform aimed to address consumer concerns, as research at the time revealed that 26% of car buyers lacked confidence when purchasing a second-hand vehicle. Cinch’s initial approach was similar to that of Auto Trader, offering a curated selection of cars from trusted dealers. However, in 2020, the company pivoted its business model, transforming into a direct seller of used cars. This shift allowed Cinch to compete directly with traditional dealerships and differentiate itself from other online platforms.

Streamlined Car Buying Process

Cinch’s website provides a user-friendly interface for customers to browse and select their desired used car. With an extensive inventory that includes SUVs, hatchbacks, EVs, coupes, estates, and MPVs, customers can choose from a wide range of options. Car listings feature comprehensive details, including multiple images, 360-degree views, options, service history, and running costs. To cater to different payment preferences, Cinch offers both full payment and monthly payment options. Additionally, the platform provides a part-exchange quoting tool, allowing customers to trade in their current vehicles. For customers looking to sell their cars, Cinch offers an integration with WeBuyAnyCar, streamlining the process further.

Car Finance and CinchCare

Cinch understands the importance of flexible financing options for customers. Each car listing on the platform features a finance calculator, enabling customers to customize their finance deal and check eligibility. Monthly payments or a “pay in full” option are available to suit individual preferences. Moreover, Cinch offers an upsell option called “CinchCare.” This plan encompasses a lifetime warranty, servicing, and breakdown cover, providing customers with additional peace of mind. CinchCare plans start from £34.99 per month, offering comprehensive protection for buyers.

Rivals in the Online Used Car Market

Cinch faces competition from other online used car dealers who also made a significant impact in 2020. One such competitor is Carzam, launched by industry veterans Peter Waddell and John Bailey. Carzam initially showed promise, with £50 million invested in its establishment. However, the business eventually went into voluntary receivership in June 2022. Another fierce rival for Cinch is Cazoo, which experienced rapid growth through extensive advertising campaigns. Unlike Cinch, Cazoo focused on acquiring various businesses within the motor trade. However, Cazoo has faced challenges, including selling off acquired firms and making difficult decisions regarding site closures and job redundancies.

Profitability and Financial Performance

As of the latest filing with Companies House, Cinch Cars Ltd reported a substantial pre-tax loss of £149.1 million for the year ended April 3, 2022. After tax, the loss stood at £126.7 million. This marked a significant change from the previous year’s £22 million loss. While the company’s revenue reached £815.6 million, the cost of sales resulted in a loss of £810.1 million. Despite these financial challenges, Cinch remains a prominent player in the online used car market.

Media Attention and Partnerships

Cinch has garnered significant media attention since its inception. The company’s headlines have spanned a wide range of topics, including financial performance, sponsorships, and expansion plans. Notably, Cinch faced scrutiny on the BBC’s Rip Off Britain, highlighting the importance of transparency and trust in the industry. The company has also ventured into sports partnerships, sponsoring football clubs and major tennis tournaments. Additionally, Cinch secured a headline partnership with the British Motor Show, solidifying its presence within the automotive industry.

Conclusion: Cinch’s Impact on the Automotive Landscape

Cinch has undoubtedly made waves in the automotive industry, revolutionizing the online used car market. With its customer-centric approach, comprehensive guarantees, and streamlined buying process, Cinch has positioned itself as a trusted and convenient platform for car buyers. While profitability remains a challenge, the company’s affiliation with the Constellation Automotive Group and its extensive brand portfolio provide a strong foundation for future growth. As Cinch continues to navigate the competitive landscape, its innovative strategies and commitment to customer satisfaction ensure its relevance in the evolving automotive landscape.

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