Would You Buy Your Next Car on Amazon?

You might be able to buy your next car alongside your groceries.
Updated April 11, 2024
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buying goods in the Amazon online store using a smartphone and laptop

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Imagine scrolling through Amazon, not for the usual array of gadgets or books, but for your next car. This vision might soon become a reality as Amazon, the e-commerce giant, aims to disrupt the traditional car-buying experience. 

In a bid to tap into the colossal U.S. market for new and used car sales, estimated at a staggering $2.5 to $3 trillion, Amazon has embarked on a pilot program, challenging the norms of an industry often perceived as complex and highly regulated. But the question remains: "Would you actually buy your next car through Amazon?"

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Amazon aims to give you a seamless car-buying experience

One of the biggest benefits for users will be the site itself. While car manufacturers also sell cars on their websites, their sites are hardly as easy to navigate or well-known as Amazon’s. The average consumer is already familiar with the Amazon platform, meaning it will be a seamless shopping experience for most who know all the popular Amazon hacks.

The other major benefit for many consumers will be limited dealer contact. You can complete the entire shopping experience up until it's time to physically go pick up the car.

The only potential drawback to limited human interaction is the limited haggling opportunity. In a traditional dealership, shoppers have the opportunity to negotiate prices, whereas on an online platform, that might not be possible. This is especially true with Amazon which is likely to just offer its best price at the onset if it chooses to follow its current strategy on other products. 

Amazon initiated its pilot program recently, partnering with a select number of Hyundai dealers to test the waters. This move follows a pattern seen in Amazon's previous forays into sectors like travel, grocery, and healthcare, indicating its intent to conquer new frontiers.

Will you save money buying on Amazon?

The prospect of buying a car on Amazon raises the inevitable question of whether it will lead to cost savings for consumers. As the behemoth enters the automotive realm, it aims to cater to the desires of its approximately 150 million Prime customers. With up to 40% of consumers wanting to complete some part of the car-buying process online, this might be a great opportunity. 

However, the savings may not come in the form of direct-to-consumer sales, at least initially. Amazon's plans to sell cars reveal a unique approach compared to the typical "Buy Now" experience associated with other products on the platform. 

Contrary to expectations, Amazon won't facilitate direct sales, but instead, it positions itself as a middleman for dealers to showcase their selections. Consumers are expected to still buy and interact with the dealerships, as you would any other non-Amazon seller on the site. 

While this might streamline the search process, eliminate haggling, and offer transparency, it leaves some lingering doubts about whether it will translate into substantial cost reductions for buyers. If Amazon doesn't get control of the pricing, then dealerships aren't as likely to drive prices downward in a way consumers might be hoping. 

Only time will tell if you will be able to save money shopping for cars as Amazon's strategy evolves. 

Bottom line

Amazon's venture into the car market signals a potential paradigm shift in how we buy automobiles. The e-commerce giant's ambitious pilot program with Hyundai dealers is a testament to its commitment to exploring new frontiers into additional products or industries. 

While the initial focus is on acting as a platform for dealers, the long-term implications could reshape the future of car-buying so it's something we all need to pay close attention to.

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Author Details

Georgina Tzanetos Georgina Tzanetos is a former financial advisor who has been active in financial media for the past six years. She holds a master's in political economy from NYU, where she studied distressed labor markets.