Headquartered in Rochdale, Greater Manchester, the company is the UK's seventh largest second hand dealership chain with an annual turnover of £120m and 500 employees across 10 sites nationwide, according to administrators Grant Thornton UK LLP. The group sells over 12,000 used vehicles per annum at an average price of c£9,000 per vehicle.

In a statement, Grant Thornton said: “The group operates in a competitive market and has suffered from poor market reputation, lack of investment, a high cost base, expensive loan note financing and an insolvent balance sheet all of which have hindered investment. The group also has legacy PPI claims.

“The group is heavily loss making recording losses of c£8m per annum for a number of years.”

Tarun Mistry, automotive advisory partner at Grant Thornton, commented: "The business model has failed to evolve with the changes in the used vehicle remarketing sector and regulatory environment. Overall, this sector is still vibrant and represents a significant opportunity for the appropriate operating model to benefit from the growing and changing used vehicle market."

A sales process has been ongoing since February 2015 which was ultimately unsuccessful.

Carcraft will cease trading and all employees have been informed and have been made redundant. All employees were paid on 30 April 2015 for the month of April.

Due to the nature of the situation, Carcraft customers with Drive Happy Plans (DHP), a warranty, MOT, servicing and roadside assistance product will no longer be covered and all elements of the policy will not be fulfilled by Carcraft.

Daniel Smith, also a partner at Grant Thornton, added: “With great regret a conclusion was reached that it is no longer viable to keep Carcraft in operation. In order to prevent further losses it has been agreed with management and creditors to cease operations with immediate effect.

"Carcraft will retain a skeleton staff to assist with the realisation of assets. In the event there are any approaches from interested parties post appointment we will react to these accordingly. It is our intention to explore with an alternative provider whether they could provide the roadside assistance element of the DHP cover at a favourable rate to former customers."