Staff at its seven sites are this morning waiting for the administrators to attend and explain whether the business will be liquidated or sold as a going concern.
"We’re in the dark right now. All we know is that we’re still employed until 7pm tonight," one employee told AM.
The move comes only two months after Carshock opened its seventh outlet in Hartlepool.
Mike Porritt, Carshock’s founder and managing director, has now registered a new company called Carshock North East.
Porritt denied that the company was administration but also admitted that he was in discussions with administrators.
A CarShock shareholder, who wanted to remain anonymous, told The Northern Echo last night: "It's finished for CarShock. If they can't make it work, no one else is going to buy the company."
CarShock is thought to owe a large amount of money to customers across the region who have put down deposits on new cars. It is not known at this stage how much money will be paid back. One man, who did not want to be named, told the Newcastle Echo he paid £4,100 on a debit card two weeks ago for a 07-registered Renault Scenic.
"I feel absolutely gutted. I could be just one of any number of creditors, so I don't know how much money, if any, I'll get back," he said. He also hit out at CarShock for the 'insensitive' message which was posted on its website.
He said: "Talk about rubbing our noses in it - it is absolutely disgusting. It is just a horrendous situation."
The welcome message on Carshock's homepage has now been replaced with a password lock.