Revolutionizing Car Buying with Amazon Autos

What Happened?

On Tuesday Amazon (AMZN) expanded its online empire.

It now includes car sales with the launch of Amazon Autos.

The new e-commerce venture lets customers find, order, and buy an array of vehicles from dealerships.

To kick off the new auto enterprise, Amazon partnered with Hyundai. The service will be available in 48 U.S. cities, including New York, Los Angeles, Atlanta, and Boston.

Late last year the online retail giant announced its plans to begin selling vehicles on their platform by the end of 2024. They have promised to add even more cities and auto manufacturers in 2025…

Why it Matters

Amazon Auto is expected to function in a similar way to how the rest of the Amazon e-commerce platform works. Prospective car buyers will be able to search for available cars, trucks, and SUVs from participating auto dealers using filters for models, trim, color, and additional features.

In addition to buying vehicles, customers will be able to secure financing and e-sign any paperwork along with it on the site, making Amazon Autos a one-stop shop. After payments are finalized, customers simply schedule a time to pick up their vehicle from the dealership they ordered from.

Just as Amazon shifted consumer shopping habits away from brick-and-mortar stores to predominantly online, Amazon Autos is expected to shake things up in the auto industry as well. Although the vehicles sold will be from local dealers (just Hyundai for the time being), the entire process will take place on the e-commerce platform. Amazon Autos will even handle any trade-ins.

While the lion's share of companies in the online auto sales market — companies like AutoTrader and Carmax — primarily sell used vehicles, customers browsing Amazon Auto's inventory currently only offer brand-new vehicles. Amazon has also laid out plans to add leasing and additional financing options for vehicles sold on their platform in 2025.

Amazon forever changed the habits of modern customers. But up until now, this was almost exclusively focused on retail. However, with their new venture into the auto market, they seem poised to shake up the auto sales industry as well.

Amazon is an e-commerce titan and has the type of reach that auto manufacturers like Hyundai may find attractive. The Amazon platform is also a familiar platform to consumers, with over 310 million users worldwide, 80% of which are in the United States.

How it Affects You

Prospective buyers may be won over by their promise of transparent pricing from local dealers, which eliminates any need for any negotiations. No haggling is certainly an appeal for many, as the price listed at checkout will be the price paid, including all taxes and fees, so customers won't need to worry about any hidden costs.

Amazon Autos' jump into the auto industry represents a bold new venture into what has traditionally been a complex market.

Simplifying the car buying process on their platform could redefine and revolutionize the industry by combining convenience, transparency, and the reputation of their widespread platform. As its service looks to expand to even more cities in 2025, Amazon has set itself up to once again be a disruptor.

It will be worth keeping an eye on how consumers, dealerships, and their competitors adapt to this new era of online auto sales. That’s particularly so if you're looking to purchase a new vehicle in the upcoming year.

If Amazon's track record is any indication of the future, the new venture for the e-commerce conglomerate may be set up for success.