CarRush Bills Itself as ‘Groupon for New Cars’. Is This A Good Idea?

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If you thought the application of the Groupon sales business model could not extend any further you could well be wrong. CarRush.co.uk launches today billing itself as ‘Groupon for New Cars’. It’s essentially a consumer front-end for FinanceAcar.co.uk. The idea is to provide exclusive weekly deals with discounts of up to 40 per cent on brand new cars on a monthly financing arrangement. This could hit a sweet spot for the 80 per cent of car buyers that purchase a new car based on a monthly payment. But will they run into the same problems Groupon participants have experienced. Let’s see…

CarRush aggregates new car deals and offers these (limited in time and number) to its members each week. Consumers purchase a refundable ‘CarRush Coupon’ (£99 to £199) to secure one of the deals with discounts of up to 40 per cent. If the finance is approved, the vehicle is delivered to the customer’s door by a franchised dealer with the full manufacturer’s warranty and servicing available from the local dealer.

If car buyers are looking for vehicles that aren’t on CarRush they can specifically request a deal on a specific car using ‘reverse group buying’. In this scenario, CarRush sources the vehicles in bulk, getting a discount from dealer and manufacturer partners. Various other deals and competitions will be run.

FinanceaCar claims research by Redshift Research amongst 1,000 motorists (March 2012) shows that a discount of 10 per cent off the list price of a car usually almost doubles the number of consumers who would buy a new car in the next three months. Furthermore they say the amount of people looking to buy a new car quadruples if the discount off the list price is 30 per cent.

Co-Founder Mark Peatey says the era of austerity is “increasing the use of finance to buy cars because of the increased availability of more flexible low cost finance options.”

Carrush claims “There is no risk that customers will be unfairly charged” as all stock is guaranteed genuine and is offered by franchised dealers. Customers are not charged for the CarRush Coupon until they have spoken with the CarRush customer services team; have their order and stock confirmed; and have stated that they want to proceed.

CarRush is also not deviating from industry norms. The say all of the finance deals on the set are based on the same finance product that most car buyers use to purchase a new car from a dealer at the moment.

It’s interesting how recessions seem to create these kids of businesses huh? What do you think?