When Amazon and Hyundai announced their partnership at the LA Auto Show, promising car purchases through Amazon’s online marketplace, many envisioned a seamless, one-click digital car buying experience, bypassing traditional dealership hassles. However, the initial pilot program is far from this ideal, especially for those hoping for a straightforward online transaction. This article delves into the specifics of the Amazon Employee Car Buying Program, clarifying what it currently offers and the road ahead for online car purchasing.
Currently, the Amazon and Hyundai car buying program is in its pilot phase and comes with significant limitations. As reported by CNBC, this program is not widely available to the general public. Instead, it is exclusively offered to Amazon employees and is limited to a select number of states. Crucially, despite the online platform, the program still necessitates an in-person visit to a dealership to finalize the purchase paperwork. This means the much-anticipated fully digital car buying journey is not yet a reality with this initial offering.
The Current Reality of Amazon’s Car Sales Ambition
Hyundai’s foray into online car retail with Amazon began in 2018 with a “digital showroom” to educate buyers. The 2023 LA Auto Show announcement signaled a significant step towards direct sales, positioning Hyundai as the first brand to sell vehicles via the e-commerce giant.
However, industry experts like Jim Appleton, President of the New Jersey Coalition of Automotive Retailers, view the current program with skepticism. Appleton stated to CNBC, “I’m really hard-pressed to understand how this is anything more than just a new lead-generator type program, no different than Autotrader or Cars.com that are well-known to consumers.”
This perspective highlights the fundamental challenges Amazon faces in reshaping car buying. Consumers desire speed, transparent fixed pricing, and an escape from high-pressure dealership tactics when considering online car purchases. Delivering on these expectations requires overcoming substantial hurdles within the existing automotive sales framework.
Roadblocks in the Digital Car Buying Experience
One primary obstacle is Amazon’s lack of a new-car dealership license. Franchise laws in many states mandate that new car sales must be conducted through licensed dealerships. These regulations, coupled with automaker franchise agreements that often include geographical sales restrictions, prevent direct manufacturer-to-consumer sales in many cases. This is why Amazon partners with existing Hyundai dealerships to supply the vehicles and legally process sales transactions. This reliance on the traditional dealer network makes disrupting the established dealership model inherently difficult.
Furthermore, numerous states have “wet signature” requirements for new car purchases. These laws necessitate physical signatures on transaction documents, preventing complete digital transaction finalization. This legal requirement forces buyers to visit the dealership’s finance department, a process notoriously associated with add-ons, hidden fees, and aggressive upselling. This in-person finance step directly contradicts the streamlined, hassle-free experience Amazon aims to provide.
Amazon’s Long-Term Vision and Dealer Dynamics
Amazon’s ultimate goal, as reported by CNBC, is to offer fixed-price car transactions entirely online, with vehicle pickup at designated Amazon-branded areas within dealerships. This vision promises a radical shift from the current car buying process.
Dealers are acutely aware of consumer dissatisfaction with high-pressure sales, price negotiations, and finance office tactics. However, these very practices are significant profit centers for dealerships. The incentive to maintain these profit streams raises questions about dealer willingness to fully embrace a fixed-price, online sales model, even if partnering with Amazon.
It is still early in Amazon’s automotive venture to definitively assess its impact. The current pilot program for Amazon employees addresses few of the systemic challenges of online car sales. Yet, Amazon has a history of significant evolution between pilot programs and final product offerings. While dealerships may resist relinquishing traditional profit-driving methods, the necessity to reach consumers through platforms like Amazon, with its demand for transparent, fixed-price transactions, could eventually force adaptation.
For Amazon employees seeking a completely streamlined, fixed-price, and pressure-free car buying experience today, alternatives like Tesla or Rivian, which have online sales integrated into their model, remain the most viable options. Until broader changes occur, modernizing the traditional dealership experience faces considerable regulatory and business model obstacles.
