Customers of car supermarket giant Carcraft will be left with their warranties and breakdown cover voided after administrators enter the firm’s 10 branches around the country.
Despite selling more than 12,000 used cars a year, at an average price of £9,000 a vehicle, the company is thought to have been making losses of around £8 million a year.
Over 500 staff at the firm’s head office in Rochdale and 10 sites across the UK have been left jobless today.
Customers with Drive Happy Plans (DHP), which include a warranty, breakdown cover, servicing and MOTs, will no longer be covered.
Daniel Smith and Joe McLean, partners at Grant Thornton UK, have been appointed as administrators to Carcraft, the UK’s seventh largest second-hand dealership chain an annual turnover of £120 million.
Smith said: “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.”
In a statement, the administrators said: “The group operates in a competitive market and has suffered from poor market reputation, lack of investment, a high cost base, expensive loan note financing and an insolvent balance sheet all of which have hindered investment. The group also has legacy PPI claims.”