Car buyers have been left without the vehicles they paid for after the collapse of an online buying platform.
Carconnect has entered voluntary administration, leaving some customers up to tens of thousands of dollars out of pocket and unable to collect their vehicles.
The business, which started in the early 2000s, was one of the first online car platforms in the Australian market, connecting buyers with dealers.
Customers could use the platform to compare models and have Carconnect negotiate on their behalf.
On February 26, the Sydney-based platform entered voluntary administration, appointing RSM Australia, with the first creditors’ report released on Monday.
“The Company has ceased trading and processing orders. The Voluntary Administrators are currently undertaking an urgent review of the Company’s affairs and will provide updates to stakeholders as soon as practicable,” read a statement on Carconnect’s website.
Customer left without $40,000 car
Darrin Martorana used Carconnect to buy a Hyundai Kona Hybrid after reading some positive reviews about the car-buying platform online.
“We got a quote from the dealership near us and thought we’d go through Carconnect and maybe save a little bit of money,” he told the ABC.
Darrin Martorana spent nearly $40,000 on a Hyundai Kona Hybrid, which has not been delivered to him. (Supplied: Darrin Martorana)
He paid the $1,000 deposit at the start of January and the remaining $38,449 10 days later, once he was told his car had arrived and was ready to pick up from a dealership in Ryde, in Sydney’s northern suburbs.
“I then got in contact with the dealership at Ryde, and they told me, ‘Yes, the car is here ready to go, but we have not received any funds from Carconnect, so we cannot release the car.'”
Mr Martorana said he went back and forth between Carconnect and the dealership before Carconnect arranged for him to visit another dealership.
“Then the same process happened, the day before they organised the car, they told me, ‘Yes, it’s ready to pick up,'” he said.
“The day before I was supposed to pick it up, that dealership contacted me again and said that they hadn’t received any funds from Carconnect, so they’d be unable to release the car to me until that was paid.
“Once that happened, I sort of knew, ‘Okay, there’s something pretty major going on here.'”
Mr Martorana then requested a refund and said he was initially told it would take two to five business days to land in his account.
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“I really didn’t trust [Carconnect] at all, so I basically called them every single day in that period, and it changed from two to five days to seven to 10 business days, and I kept trying to say to him … what is the actual date that the refund is coming? Like, I have no paperwork from you.”
He said he was then told it would land in his account at the end of February — the same time the business then entered voluntary administration.
“[I’m] extremely stressed; it’s definitely affected every part of my life, to be honest,” he said.
“I’m a shift worker, I need a car to get to work, I start work at 1am.”
Nearly $40,000 out of pocket, he has contacted his bank and started the process of requesting a chargeback, as well as making a complaint to the Australian Competition and Consumer Commission and Fair Trading.
About 200 customers affected
About 200 Carconnect customers have been affected by the collapse, according to administrator RSM Australia.
RSM said 181 customers had paid deposits, and 23 had paid in full for their vehicles and were awaiting delivery.
Carconnect has entered voluntary administration, leaving hundreds of customers out of pocket. (Supplied: Carconnect)
Others have also been identified who placed orders but have not yet paid deposits.
Billy Xu is another customer who had paid more than $40,000 to Carconnect, buying a 2025 Geely Starray for his dad at the start of February.
But when the car delivery was 10 days overdue, he requested a refund for his purchase, unaware that the company was entering voluntary administration at the same time.
“[I’m] very upset … [this car was] for my whole family because I don’t have any car to drive. I have to take a bus to go to the work,” he said.
Billy Xu paid more than $40,000 for a car from Carconnect in February that has not come. (Supplied: Billy Xu)
He said he was disappointed he was not told about the company’s financial troubles earlier.
“This is where it’s not acceptable, because for some people, it was already happening in the middle of January, they reported it to the Fair Trading, and the government didn’t do anything with us,” he said.
“No recommendations, no warning us, ‘Don’t do deals with this company.'”
Not in a position to pay refunds: administrator
RSM Australia partner Jonathon Colbran said in a statement: “We are endeavouring to connect customers who have not received vehicles with the relevant dealers to discuss the completion of orders.”
“Where people have made payments, and orders cannot be filled, these orders will convert to creditor claims as the company is no longer trading and is not in a position to pay refunds,” he said.Bedford to go into voluntary administration
Customers left without cars and their money will end up among those owed funds by the collapsed firm, and will have to wait until at least next Tuesday to learn where they may rank on the list of creditors.
Mr Colbran said their focus was to find a buyer for the business in the short term and encouraged customers who had paid deposits using credit cards to discuss their situation with their bank immediately.
“We fully appreciate that there will be impacts in the short term for people who have not yet taken delivery of their vehicles and for dealers who have not yet been paid,” he said.
“We will be working through these circumstances as a matter of urgency and hope to achieve a positive resolution.”
The first creditors’ meeting is scheduled to be held virtually on March 10, at 9:30am AEDT, and customers may be eligible to submit a claim through the motor dealers and repairers’ compensation fund.