What happened to Carzam? Everything you need to know

Carzam was supposed to transform online car buying, but the business no longer exists. It was one of the UK's best-known online used car retailers, offering customers the chance to buy, finance and have a car delivered without ever visiting a dealership. Launched in 2020, it arrived at a time when online shopping was becoming the norm for almost every major purchase, including cars.

The business grew rapidly during the COVID-19 pandemic as buyers switched to online buying, attracted by fixed pricing, home delivery and the convenience of completing the entire purchase online. However, despite its early success, Carzam entered administration in 2022 and ceased trading.

Although the brand has disappeared, its approach helped accelerate the shift towards online car buying. Today, many manufacturers, dealer groups and finance providers offer a similar online experience alongside traditional dealerships.

We explain what Carzam was, why it closed and what today's buyers should look for when purchasing a car online.

Carzam at a glance

2020: Carzam launches as an online used car retailer.

2020–2021: Demand for online car buying grows rapidly during the pandemic.

June 2022: Carzam enters administration and stops trading.

Today: The brand no longer operates, but online car buying has become a mainstream way to purchase a vehicle.

What was Carzam?

Carzam was an online-only used car retailer that aimed to make buying a vehicle as straightforward as ordering almost anything else online. Customers could browse thousands of cars, arrange finance, complete paperwork digitally and have their chosen vehicle delivered directly to their home.

Unlike a traditional dealership, there was no need to spend hours visiting forecourts or negotiating prices. Vehicles were listed with fixed pricing, allowing buyers to compare different models before completing their purchase entirely online.

The company also offered part-exchange services, nationwide home delivery and a money-back guarantee, helping reassure customers who were buying a car without seeing it in person first.

While these ideas were relatively new at the time, they've since become commonplace across much of the automotive industry.

Why did Carzam close?

Carzam entered administration in June 2022 after facing significant financial pressures during a challenging period for the automotive industry.

During the pandemic, shortages of new vehicles pushed used car prices to record highs, encouraging retailers to purchase large volumes of stock. As supply gradually recovered, used car values began to stabilise, reducing profit margins.

At the same time, businesses faced rising operating costs and increasing interest rates. Retailers holding large inventories of vehicles suddenly found it much harder to operate profitably.

Carzam wasn't alone in experiencing these challenges. Several businesses in online vehicle selling faced similar pressures as market conditions changed following the pandemic boom.

Its closure showed that while car buyers clearly embraced buying cars online, building a sustainable business in a highly competitive used car market remained far more difficult than many had anticipated.

Is Carzam still trading?

No. Carzam ceased trading after entering administration in 2022 and no longer sells vehicles.

Anyone searching for a car today will need to use an alternative seller. Fortunately, buying a car online has become much more established since Carzam launched, with many manufacturers, dealer groups and retailers now offering online purchasing alongside traditional showrooms.

What happened to Carzam customers?

Customers were affected in different ways depending on where they were in the buying process when Carzam entered administration.

Many finance agreements continued as normal because they were provided by third-party finance companies rather than Carzam itself. Likewise, manufacturer warranties remained valid.

However, customers with outstanding orders, aftersales queries or warranty issues handled directly by Carzam often had to work through the administration process or contact the relevant finance provider, warranty company or vehicle manufacturer instead.

The situation also highlighted the importance of understanding who is responsible for different aspects of a vehicle purchase, particularly when buying online.

What should you look for when buying a car online?

Buying a car online is now a well-established option and, for many people, it's more convenient than visiting multiple dealerships. However, it's still important to do your research before placing an order.

When comparing online retailers, consider:

• Vehicle preparation: Has the car been inspected, serviced and professionally prepared before sale?

• Finance: Is any finance agreement provided by an FCA-regulated lender with clear terms and transparent costs?

• Warranty: Understand exactly what's covered and who provides the warranty.

• Returns policy: Check your cancellation rights and whether there's a money-back guarantee.

• Customer support: Make sure help is available after you've taken delivery if you have questions or need assistance.

• Reviews and reputation: Look for established retailers with positive customer feedback and a strong track record.

Spending a little extra time checking these details can help make buying online every bit as straightforward as buying in person.

Buying a car online today

Online car buying has evolved since Carzam launched. Today, many manufacturers and dealer groups allow customers to browse stock, value a part exchange, arrange finance and complete much of the purchase process online before either collecting the vehicle or having it delivered.

What this means for you

Carzam helped show that buying a used car online could be quick, straightforward and convenient. While the company itself no longer exists, many of the ideas it introduced have become standard across the industry.

Today, buyers have more choice than ever when purchasing a vehicle online. By choosing an established retailer, understanding the finance agreement and checking the warranty and returns policy before committing, you can enjoy all the convenience of buying from home with confidence.