UK Markets close in 20 mins.

Carcraft Collapse Could See Customers Lose Cash

(c) Sky News 2015
 

Five hundred jobs are going and thousands of customers could be out of pocket after the collapse of one of the UK's biggest used cars dealers.

MoT, warranty, servicing and breakdown cover agreements with Carcraft are to be made void.

Administrators Grant Thornton said it would be contacting people to let them know that all or part of their contracts will no longer be honoured.

Carcraft, established in Rochdale in 1951, operated 10 forecourts in locations such as Rochdale, Sheffield, Leeds, the Trafford Centre, Newport (NasdaqGS: NEWP - news) , Lakeside, Chertsey, Chester le Street and Wednesbury.

It was the seventh-largest dealership in Britain

The firm sold 12,000 cars a year and turned over £120m, but administrators said it was heavily loss-making and had posted losses of around £8m for a number of years.

Chief executive Robin Bridge had led a management buyout of the firm last year, backed by Apollo Ventures.

However, attempts to find another buyer failed and it will now close immediately with just a skeleton staff kept on to help sell off assets.

"The business model has failed to evolve with the changes in the used vehicle remarketing sector and regulatory environment,” said Grant Thornton’s Tarun Mistry.

Administrators said they would look at whether another company could provide roadside breakdown customers with a new deal at a "favourable rate".

Carcraft customers who want more information can call its helpline on 0800 923 9495 or email carcraft@uk.gt.com.