There are rumours circulating in the motor trade press that supermarket giant Tesco could be gearing up to sell used cars online.

Car Dealer Magazine has a source that says Tesco will sell used cars – aged between one and four years old – via a website similar to car supermarket Autoquake.

If the rumours are to be believed this could be major news for buyers. It's likely the supermarket group will price its stock aggressively and undercut many dealerships.


"The sole aim of this will be for Tesco to up-sell its finance and insurance products to buyers of these used cars," said Car Dealer Magazine's source.

"It's likely they'll make very little on each sale but instead use it to make lots of revenue from their financial arm. Tesco will look to mark itself apart from the negative view it thinks its customers have of dealers by offering what it thinks will be a better car buying experience. What will worry franchised dealers the most is that Tesco has a very strong brand name and if successful it could mean supply of used cars will dry up and prices increase."

The trade magazine reports that the launch is in the final stages of planning. The likely web address will be TescoCars.com – registered to the same web-hosting firm that holds the company's Tesco.com domain.

The supermarket recently launched into the tyre market with Tesco-tyres.com – a tie up with Blackcircles.com – which promises to offer the 'best priced' rubber around. Couple that launch with the rumours currently circulating and it seems highly likely that the firm is gearing up to enter the car market.


Tesco would need to arrange a similar deal for servicing – but that could easily be facilitated by the likes of Kwik Fit, Unipart or Halfords.

What remains unclear at the moment is whether the supermarket will offer physical locations for customers to browse or whether it will all be carried out online. The Autoquake model – which would be the closest in terms of similarity – has a centre where customers can view the cars they've seen online in the metal. It's likely, especially with used cars, that Tesco would need to do the same.

The industry is understandably worried about such a big brand wading into their territory. Car sales portal Motoring.co.uk deals with a huge number of car retailers every day and says the news is a huge worry.

Director Chris Green said: "Tesco is likely to market this in a way that will target dealers and that won't be good news. This worries me, and I'm sure it worries dealers too."

It's not just dealers that are concerned, though – car manufacturers also have their doubts about the move. However most car manufacturer bosses Autoblog spoke to were confident their dealers offered something different enough to still attract customers.

"Any move by supermarkets towards online car sales would have to compete with already very sophisticated sales processes," Mazda UK chief Jeremy Thomson told us while Nissan boss Paul Willcox added: "There are still many buyers who appreciate the expertise and reassurance that can only be given at a franchised dealer."

Car supermarket Motorpoint's MD, David Shelton, said he believed it was a 'step too far' and warned supermarkets 'only have to look at what happened to Virgin a few years ago'.

When Autoblog contacted Tesco for a response, a spokesman would only say: "Tesco does not comment on rumour or speculation."

Read into that what you will, but while dealers and car makers will be hoping the rumours are false, buyers across the country will be hoping there's a glimmer of truth in it.

What do you think? Would you buy a used car online from a big brand supermarket like Tesco? Or do you prefer to visit a dealership? Let us know by posting you comment below.