Tech Matters: A look into buying a new car online
Hold onto your seats, Amazon will begin selling cars next year. The company released its news at the Los Angeles Auto Show held earlier this month. Currently, the only automaker to partner with Amazon is Hyundai, but others are thought to be considering this new outlet.
Amazon’s sales model uses inventory from local dealerships that lets buyers complete their purchases online. Customers will be able to search for available vehicles by model, trim, color and features, choose their preferred car, and then check out online with their chosen payment and financing options — all within the familiar Amazon experience. The buyer can then pick up their vehicle at the dealership or have it delivered.
“You’ll be able to compare available selection at local dealerships and see transparent pricing,” Amazon VP Marty Mallick said at the show. Keeping dealerships in the sales cycle is a key part of the process for Amazon. “This new shopping experience will create another way for dealers to build awareness of their selection and offer convenience to their customers,” Amazon said in its press release.
Keeping the dealerships in the loop avoids getting into trouble with laws against manufacturers selling direct to customers. In fact, 48 states, including Utah, require new cars to be purchased through dealerships. Electric vehicle makers have had some success in winning approval to open direct-to-consumer dealerships — including Tesla in Utah in 2018 — but just a year later, the EV manufacturer decided to sell exclusively online. The move allowed the company to lower vehicle prices by about 6% on average, according to Tesla’s blog post. No pricing information has been released for the Amazon-Hyundai deal.
Buying a new car online is not new but neither is it the norm. And Amazon will not be the first to do it.
Dealerships themselves have begun catering to the car buyer who wants to avoid the hassle of buying a car in person at a dealership. Consumers are tired of playing games — going back and forth to one or more dealerships, waiting for quotes and negotiating pricing without ever really knowing if they’ve gotten a good deal. And hassles aside, plenty of consumers have become accustomed to shopping when they want to and from the comfort of their own homes. And millions of them use Amazon. You might say that dealerships have taken a page from Amazon’s playbook when it comes to alternative ways to buy a car.
I spoke with Jack Furbush, director of digital sales at Utah-based Ken Garff, who told me about Remote Start, the company’s tool for buying a car online. Using Remote Start, you could avoid a visit to the dealership altogether. In addition to seeing all available vehicles across their dealerships, you can see financing options from the lenders the company works with whether you’re financing, leasing or paying cash. You can also get a trade-in valuation applied to your package. You can get pre-approved for financing, including instant approval from certain lenders. Once you’re satisfied with the terms of your purchase, you can sign the paperwork remotely and have the car dropped off at your home.
Remote Start was launched in 2020 during the pandemic when just about every business sector was looking for remote options to keep their employees and their businesses up and running. Some tools like menu QR codes, Zoom for meetings, vote by mail, telehealth and online car buying options such as Remote Start remain popular today.
“Remote Start is our most popular tool on our sites,” Furbush said. “However, hardly anyone completes their purchase online. Instead, they calculate their payments and then come in for a test drive.” J.D. Power recently named it the third-best remote buying option among all major dealer groups in the country.
Furbush attributes the popularity of online car shopping to the desire consumers have for transparency. “They want all of the information up front just like any other purchase they make in their daily lives,” Furbush said. “Buying a car doesn’t need to be any different than shopping for a computer.”
Leslie Meredith has been writing about technology for more than a decade. As a mom of four, value, usefulness and online safety take priority. Have a question? Email Leslie at firstname.lastname@example.org.