Buying a car is almost always a huge pain in the ass. But these days, there are more and more ways to buy a car online, and for many people, that’s a good thing. For example, when buying a Tesla, the price is the price – there’s no dealer markup, and you can finance the car directly from the Tesla website. But most of the time, you still have to go to your local dealer, sometimes paying thousands of rupees more than the list price of the car – simply due to the fact that the car is in high demand.
Amazon, seemingly, wants to change the way we buy cars – and has announced that it will be selling cars directly from Amazon.com starting next year. At first, it will only sell Hyundai cars, but Amazon clearly wants to play a bigger role in the car buying process, and it’s very likely that other companies will join in as well.
But don’t get your hopes up just yet. Amazon can certainly start selling cars from its website, but don’t think the experience will be painless right away.
how to buy a car
There are a few ways to buy a car these days. Many new companies are taking a direct-to-consumer approach. That is to say, you will go to the company’s website, or sometimes a local storefront (this is different from the dealer as the companies directly own these storefronts), and pay a set price for the car. You won’t haggle on pricing, and you won’t be surprised if you’re paying more than you expected.
But sales of these types of cars make up a small percentage of new cars sold in the US – most of them are still sold through dealerships. And dealerships are more sensitive to the laws of supply and demand – where they can raise prices when supply is limited and demand is high.
Buying a car on Amazon won’t be like buying cat food. You won’t be able to click “Buy It Now” and get free shipping through your Prime membership, the same way you would if you bought anything on the website.
So, how would this work instead? Well…through local dealers.
In Amazon’s announcement, the company said it would only serve as a way to “build awareness of their selection for dealers and provide convenience to customers.” In other words, Amazon will seemingly have a storefront just for local dealers — not a storefront for companies to sell directly to consumers. This is very unfortunate, but not necessarily all that surprising.
And while haggling with a dealership is always an awesome experience, it can really limit how much markup you’ll pay. Purchasing through Amazon completely eliminates the ability to bargain, meaning you’re more likely to pay a higher price than necessary.
It’s not all bad
Of course, there are still advantages to the way Amazon is approaching selling cars. Dealerships will still be able to set prices on their Amazon portal, but beyond that and choosing the car yourself, it appears Only You will have a conversation with them. Customers will be able to search for the exact model and trims they want, and find out where the nearest model or models are. Sure, you can usually do the same on manufacturer websites – but automaker websites are rarely any good. Amazon isn’t perfect, but at least most people are used to navigating the Amazon website.
It’s also possible that you’ll be able to window-shop a little more easily – although the exact process for finding a car on Amazon hasn’t been revealed yet. If dealerships do indeed continue to set prices on Amazon, hopefully you’ll be able to see prices from different dealerships near you – ensuring you’ll pay the smallest dealership markup you can. It’s a good thing.
future of car buying
None of this is to diminish Amazon’s role in the car business. Increasingly, Amazon is looking to enter the automotive industry – and beyond the announcement that it will sell Hyundai cars on Amazon, the company also said it will power Hyundai’s cloud infrastructure with Amazon Web Services, and Alexa will be able to power Hyundai cars. Will be available in the future.
But hopefullyIn fact the future of car buying rests directly on the consumer. Again, local businesses are great – and we should support them. But local dealerships are an extremely poor experience for consumers, not to mention how much money they routinely charge consumers on cars that should be priced much less. Maybe there’s a middle ground – more rules about how dealerships can sell to consumers. But in the meantime, buying directly from the company is a much better experience.
Of course, Amazon could play a role in this. Companies could theoretically sell their cars directly to consumers through an Amazon storefront. It’s a little hard to imagine that car manufacturers would give up this much control to a company like Amazon – but if Amazon could seriously improve the car buying process, perhaps that would be enough to convince them.