How super are used car supermarkets?

Perhaps it has bypassed your attention, but car supermarket Carcraft is to close, with the loss of about 500 jobs.

The dealership, based in Rochdale, Greater Manchester, has 10 showrooms around the country. Carcraft was the UK’s seventh-largest second-hand car chain. It sold more than 12,000 used vehicles a year, according to the administrator, Grant Thornton, which said the group had suffered from “poor market reputation, lack of investment, a high cost base, expensive loan note financing and an insolvent balance sheet”.

More than 20 years ago, I remember spending a day at one of their branches, kicking tyres and talking to staff about the car supermarket revolution.

What I’ve always liked most about car supermarkets is the choice. However, the mass-market selling of cars in a supermarket setting is problematic.

The easy finance can be less than easy. Then there can be strong pricing and cars that aren’t strictly warrantable. Indeed, a spokesman warned customers that Carcraft policies, including breakdown cover, would no longer be valid.

So some car supermarkets have exploited the needy and those with CCJs, who may not get mobile otherwise.

Everyone has to take care, of course, and look out for themselves, but the condition of some cars I’ve seen really isn’t that impressive. They are often bought in blocks at auction on price and certainly not condition.

To keep profits firm, the minimum amount of remedial work is done. What you don’t spot, they won’t draw to your attention.  Capping it all off is a warranty that may be full of holes.

Of course, not all supermarkets are like that, whereas some of the bigger independent dealers can be. However, there are those that get it absolutely right: family run, with nice facilities, and devoid of the cheap stuff. They stick to the properly warrantable, fairly new stuff.

There is a place near me that is clean and tidy and its stock is hard to fault. The prices are firm but fair and you understand why families go back repeatedly for their hatches, SUVs and people-movers.

What about the really interesting stuff? Sports cars, supercars and performance cars? If the supermarket has them as part-exchanges, chances are they’ll be decent buys.

Getting back to the bankrupt supermarket in question, the rumour is that Carcraft managed to rack up losses of about £8 million per year. And I thought there was money to be made in flogging used cars...