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How Cartime's Matt Kay went confidently into the unknown


Most independent retailers usually cut their teeth in the trade before going it alone, but Matt Kay, Cartime’s 38-year-old managing director, ripped up the rule book and learnt on the job.

His business, which employs 67 people including five apprentices, stocks 700 mostly premium vehicles aged two-and-a-half to five years old expects to finish the 2017/18 financial year in May with turnover of £34 million.


Creating the Cartime brand

When his father died during the final year of his business degree, Kay didn’t want to be a financial burden on his mother and made £160 buying and selling his first car, a ‘J’ reg Ford Fiesta. He decided to operate as a sole trader and at one point had 20 cars parked between his mother’s house, a local pub car park and a nearby petrol station forecourt.

In 2004, a 50-car site near Blackburn became available. With his 20 vehicles and the outgoing owner’s 30, which he sold for a commission, Kay had his first limited business, M65 Cars, aged 24.

“I was going into the unknown, I had no automotive qualifications, but I was motivated, I wasn’t afraid of risks and I believed in my ability. I didn’t have enough money, cars, knowledge or experience,” he said.

With the help of one of the site’s former employees, Andy Scott, who still works for him, Kay built up his stock of five- to seven-year-old, high-mileage premium vehicles until there were 70 cars on site and he was selling 40-50 units a month.

In 2011, Kay bought a showroom in Bury with a Seat dealer as a sitting tenant, who moved on a year later following a break in the lease. Kay moved in and the Bell Lane site is now the ‘hub’ of the business.

Kay said: “I had to make a difficult decision, do I look for another tenant or do I move from M65 Cars to here? That was probably the biggest decision I made. At that stage I hadn’t set up my brand, I had 50 old cars with 100,000 miles on the clock, four staff, no telephones and I didn’t have any signs outside.”

Kay decided at that point that it was time to invest in creating the Cartime brand: “I wanted a name and concept that I could roll out nationally even though I was at the stage when I didn’t have the right cars and no investment.”

He credits his degree with giving him much of his business acumen: “Without doing a four-year degree course, I don’t think I would have been able to push it forward as quickly and as smartly as I did.”


Investing for growth

Eighteen months ago, Cartime secured a £5 million stocking loan from Alphera, but it became apparent operations needed to improve.

Kay said: “We were buying more cars, but we couldn’t sell or prep them as quickly and we didn’t have the right infrastructure and managers in place.  We had created a good solid business where people would lend to us, but the money came before we were good enough.”

Matt Kay CartimeCartime has invested in its buildings and operations, extending when land became available behind its site and  acquiring both the unit next door and a site opposite its current premises where it stores part-exchanges. It also

developed a 12-ramp preparation centre at Oxford Mill, within walking distance. The 70,000 square-foot site can house 300 cars and employs 14 technicians.

Cartime also invested about £50,000 in Keytracker, an electronic key management system. Kay said a £30,000 turntable picturing system at Oxford Mill has improved the quality and speed of its vehicle photography. Cartime uses

iControl to help control its over-age stock and spot strong market performers.

After Kay found leads were being missed and conversions could not be tracked, Cartime introduced a new lead management system, SLM, last year to better manage the increased number of enquiries coming through multiple platforms. Sales conversion rates have risen to 15% from below 10%.  The business has also installed call monitoring system Calltracks.


Rebuilding the Sales team

Kay split his salespeople into three six-person teams – each with a sales manager, four salespeople and a finance/compliance administrator – under newly appointed director Daniel Wood.

Kay said the change resulted in better control and measurement. Weekly sales management meetings track progress and individual conversion rates, and areas where improvement is needed are spotted quickly.  

Cartime uses a traditional sales pay structure of basic salary plus commission and a new sliding scale reflects customer complaints and good reviews.

As an incentive, Kay and Wood took their top-performing salesperson to the National Automobile Dealers Association (NADA) conference in Las Vegas earlier this year.


‘We don’t chase retail work’

Cartime offers a three-year aftersales package that includes a warranty and routine servicing. That is not unique in the independent sector, but where it does differ is that it is its own product and Kay’s service facility is purely set up to manage aftersales for the vehicles he has sold.

He said: “The garage supports our car sales so we don’t chase retail work, we do in-house prep and warranty.”

All vehicle preparation is done in-house, including a 62-point check. The company operates a ‘filter’ system, so if a car or part-ex has signs of high prep requirements, it will be put back to the trade.

Kay said: “It’s better for us to lose on a part-ex than to retail what isn’t right for Cartime.”

About 40% of sales customers opt for the three-year package, he said.

“I don’t want to make money from service and not be able to provide a good mechanical check for the car. All my mechanical and prep unit supports my retail business, there’s probably not many used car operations that would have something of that size without the back-up of retail customers.

“We have got enough manpower that if a car broke we could go and pick it up and probably fix it the same day. We can throw two or three mechanics on one car, we have got good resource in there and that provides confidence to the customer.”

Tailored to each customer, the cost of the Cartime package depends on factors such as model and mileage, but the average price is £1,200-£1,500. It can be incorporated within a car’s finance and any remainder can be transferred if the customer changes their car.

Kay said the key driver to creating his own warranty product was to give the business more control and offer a better service to his customers: “We used other warranty providers, but we found when a customer went to claim there were so many terms and conditions, there was so much they didn’t cover, that we ended up looking bad.

“I’ve got the final decision, so if someone isn’t covered, but is local and may have bought two cars from us, I would probably fix it because I want to keep his business.

“We don’t need too many terms and conditions, basically we cover everything apart from wear and tear. We don’t tend to argue with the customers too much. If your car has broken down, we usually say just bring it in and we’ll do it.”

Cartime’s Black Friday offer was a free upgrade to lifetime cover on the three-year product. Kay said: “If you have your car for 10 years, you never have to pay to have it serviced or fixed again.

“There will be that handful of people who come in every week and cost me thousands, but I deal with good customers and we’re a straight, honest company, I’m going with the majority of people.

“The additional business that generates will outweigh those two or three people who try and milk your business. The person who comes back and has his car fixed all the time is going to recommend that people buy a car from me.”


Growing the business

To facilitate its rapid growth, Cartime has identified a second 1.6-acre site, which it hopes to finalise soon. A former supermarket in a neighbouring town, it will eventually house 220 vehicles and Kay plans for it to be operational by summer.

Rather than increase the number of units, Cartime will move some of its stock to the new site with one of the experienced sales teams and will redevelop the storage space across the road from the Bell Lane sales hub to create a collections centre. Meanwhile, Kay is actively looking for a third site, which he envisages opening in 2019 in the south Manchester and Stockport area.

He said: “This site has taken me five years to get where I want to be but now it’s different because we’ve already got the money, the staff, the infrastructure and we are well known. The vision is to have three or four sites in a triangle or rectangle around the M60.”

Cartime has also been approved by Lombard for stocking loans of £5m providing a combined £10m stocking facility with the Alphera backing. Currently, the business is only utilising 50% of the provision and both have

promised to extend the stock funding as the business grows.

Kay said: “In the market, people don’t really see how much we have grown – 700 cars could be 10 sites quite easily. We have done all this on one site. We have created a good, solid foundation. I didn’t want to go into other towns until I was strong enough at the base.

“Eighteen months ago, we could have bought another site as soon as we got the funding, but we left the money in the bank and didn’t start looking for opportunities until the business was stronger.”

With two sites up and running, Kay is confident the business has the potential to reach £50m in turnover in 2018/19, increasing to £80m by 2020, with three sites stocking 1,000 cars at any one time.


Marketing and customer care

Offers are shuffled every three months with a focus on 0% finance and a 50% deposit.

As well as its website and social media channels, Cartime does extensive radio advertising. Communication channels include 24-hour live chat, which is outsourced to an external company.

A customer care executive calls each customer following a vehicle purchase and any issues are passed to the management team.

Reviews are forming a big part of Cartime’s marketing and online reputation management and it has partnered with JudgeService. Of people who leave reviews, 94% recommend the company, which has an overall satisfaction rate of 91% and 4.7 out of five stars from 888 reviews. Google rates Cartime as 4.1 stars, with 385 reviews, and Trustpilot gives it four stars from 108 reviews.

In March, Cartime’s various channels provided 1,700 leads.

It has dabbled with videos on YouTube and Facebook and its turntable provides 360-degree views.

Kay said: “Our ads show a lot of the car, we have up to 80 shots of the car, a video and an internal video, there’s not much that can’t be seen. We look at supplying all the information at the first point of contact so we don’t have to do additional work later.”

Auto Trader is a key channel for Cartime accounting for 50%-60% of leads and sales. Kay’s teams team continually compare their cars with competitors as well as measuring page views and click-through rates, but he thinks the site is expensive and is not afraid to experiment.

Using technology provided by its DMS provider Click Dealer, Cartime rotates the 700 vehicles it has in stock about five times a day to advertise 500 vehicles at a time, saving up to £15,000 a month.

Kay said: “If we have 30 Audi A3s, we don’t need to show all of them on Auto Trader. It works for me because I have a lot of vehicles and a lot of the same stock. At Christmas, Auto Trader offered to put all my stock on for the same price, so we put everything on for six weeks, but we sold the same amount of cars when we went on stock rotation, if not more.”

Half of all the units Cartime sells are funded with finance, the majority on HP and 5% on PCP. Its warranty conversion rate is currently 40% and GAP 20%.

Cartime has signed up with MotoNovo’s Find and Fund, a car dealer platform that enables a car buyer to find a vehicle and apply for finance.

While Cartime’s website does have a finance calculator, Kay said long-winded online finance provision had a high drop-out rate and instead it now uses a simple finance template to gather basic information, which is then followed up with a phone call.


An eye for opportunities

Being agile and not afraid to take a chance form part of Cartime’s success, said Kay.

“When snow was coming, I increased the number of 4x4s, we put out social ads and we created specific offers. Our 4x4 sales increased, but this was done overnight because of the weather conditions.”

Cartime sold six 4x4s from 14 enquiries on Sunday, March 11, accounting for 50% of the day’s business. On an average day, only about 20% of sales would be a 4x4 model, reflecting the possible rewards for a quick reaction to market or seasonal conditions. Kay will next focus on convertibles, expecting interest to rise due to the warm weekends.

Rising demand has prompted Kay to increase the number of EVs in stock, but although EVs account for 5% of his current business, he has no immediate plans for additional technician training or installation of charge points until the consumer dictates otherwise.

Kay is keeping an eye on online developments and hints at the possibility of a new website and rebranding once he has established his second site. He said he may even consider incorporating a click-and-collect service, but he does have reservations about not seeing the customer on site.

Kay said: “Other dealers would say ‘we haven’t done well, it’s Mother’s Day’ or ‘we haven’t done well, it’s snowing’, but all these to me are opportunities.

“You have got to be proactive and be ready to change, not be frightened of investing, marketing, advertising or changing things.

“People say to me ‘you’re making good money why would you do something which could muck it up?’.

“If I always did the same I wouldn’t be where I was today.”

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  • Graham Smith - 15/06/2018 20:26

    ** edited for legal reasons ** My wife bought a 6k car that was a complete wreck. Twice they took it back to ‘fix it’ which consisted of measures such as cable ties to hold the exhaust in place. When confronted for a refund, this man just had threats of violence in response before winding up his business whilst court cases were in progress. Do your research before creating a picture of success.