Amazon announces online car sales for the first time, starting with Hyundai
theverge.com
theverge.com
The current dealership model creates and tolerates incentives for dealers to rip me off at sale time. It also injects a set of complexity into the model, where if I choose to buy a car of brand X, I then have to comparison shop for the exact same car at multiple dealerships.
I've bought two Teslas, and the nice thing about the process is that it doesn't matter where I pick up the car, I get the same price, and the exact same experience. Tesla also won't try to rip me off on buy-ups like tire protection and seat protection. (Then again, Tesla really needs price protection because they significantly dropped the price of the Model Y shortly after I bought it.)
One of the most annoying situations was a Subaru dealer that made me sit through a pitch for various upsells (that were rip offs) and then sign a form that I listened to them.
I really hope the Amazon car purchases explicitly prohibit upsells and other nonsense. Just bring me the car, give me the keys, and stay long enough to make sure that the car works. No BS upsells.
I honestly wish I could just order a Tacoma straight from Toyota, pay for it to be shipped to me, and avoid the dealership rigamarole altogether. I'm okay waiting my turn in line from the factory. I don't want to deal with artificial dealership "market adjustments." I don't understand why we haven't deregulated the car sales industry to allow (and even require?) manufacturers to directly sell to consumers, circumventing dealerships entirely. It would upend that industry and force them to prove they actually are a value-add service.
Dealerships are local jobs programs in some sense and they got State laws enacted to secure their positions. Tesla went up against them and won I guess.
My guess is the Amazon program will be similar to the Costco program.
[0]https://www.porsche.com/usa/motorsportandevents/deliveryprog...
Not only do dealerships provide local jobs but generally their owners tend to be well to do and donate prolifically to local elections, where dollars are normally otherwise scarce because of their lower participation rates.
Which is a terrible reason to keep predatory businesses around.
> but generally their owners tend to be well to do
You can always make a lot of money when you're ripping off the public
> and donate prolifically to local elections
"Bribes local politicians". Car dealerships seem like some kind of mob racket. They are a third party that managed to insert themselves in the middle of transactions that shouldn't involve them, they extract a ton of money from the public while providing no value, and then bribe lawmakers to make sure they can keep the rigged game going.
The sooner we can get rid of them the better.
Lost them a sale from me, as that was a big point in their favor. Without it I ended up somewhere else.
This is setting aside the scope for direct to consumer sales exploiting uninformed customers. Remember: safety regulations are written in blood.
The current model increases safety. People have bought dangerous devices on Amazon before. And people have used these dangerous devices irresponsibly. We shouldn't encourage their proliferation.
You mean humans will do a racism/sexism/classism when deciding whether or not to sell to someone or rip them off.
Dealerships exist in general because early 20th century people liked buying from specialized stores instead of department stores or mail ordering them. Dealerships exist today because of regulatory capture.
Dealerships in the US do not play any role in determining the ability of the purchaser to operate the vehicle. It is legal and possible to purchase a vehicle without a drivers license in all 50 US states.
How? Are Tesla's more dangerous as a result of direct sales? Do you have data to show this?
"Written in blood". No.
> The current model increases safety
How, specifically? Would a Tesla be more safe if it were bought from a middleman dealership as opposed to directly from the manufacturer? Would Toyotas be less safe when purchased directly from Toyota?
Similarly, is there any evidence that a used car purchased from an independent seller is statistically less safe than one purchased from a dealership?
> If you cannot articulate the reason for why dealerships exist, you are not equipped to argue for their deregulation.
How about you focus on the argument, rather than an ad hominem? Or is that your only argument?
If someone without a license wants to buy a tacoma and look at it sitting in their driveway what's the problem exactly? It's not like they'll get a license plate without a driver's license and they won't get very far driving without plates.
Car dealerships are leeches that trive on obscure pricing schemes and partial information, the idea that we need them in the name of security is an extreme stretch.
As to direct sales somehow uniquely exploiting customers: Have you ever tried to actually buy a card from a dealership?
The same can be said for whoever will deliver a car from Amazon.
Then you just buy from another company and market works.
The issue (for many) is things like negotiating, financing, trade-ins, and car availability.
Aside from the availability thing (especially the past couple of years), you can largely make the rest go away by no-haggle cash on the barrel and deal with your own trade-in. But most buyers don't actually want that.
When I bought a car the summer before last, it took a while to get the car delivered (and the dealer wasn't exactly candid that "in transit" actually meant "not actually built yet"). But I was paying cash and they actually offered a ridiculously good trade-in and a few upsells were mostly about saying no a bunch of times and ultimately getting the price of "factory options" added to my trade-in. It took a couple hours and a few phone calls while waiting for the car to be delivered, but honestly not a big deal for an expensive, rare purchase.
We still had to sit through videos and the standard sales pitches for the undercoat, etc. Can I shout now? Lasting an hour. For the last Prius they said well this particular vehicle has an optional security registration or some such that is installed in the car. I said remove it. Maybe two minutes of harrumphing about how I am exposing myself and I got quite acidic actually. Well whatever they actually did the price I wrote a check for was exactly what we had agreed to over email.
Now I don't actually care if what you like to do in your non-work time is to sit through car dealership sales pitches for nonsensical stuff, but I don't. And I want the option not to have to burn my time for this. It really is a wonder how normalized for many people it is to feel how pleasant it can be to sit through add on advertising while doing some sort of necessary activity where at the conclusion I'm going to write a check for tens of thousands of dollars. They're so helpful! Rather than what it is, which is time theft, condescendingly done.
Old house sold for cash, "new" house bought for cash.
Does anyone spending tens of thousands of dollars not value their time? I think they do!
The process might be onerous but it's far from a "rip off" or some sort of scam. Every car I've bought dating back 20 years had very helpful sales and finance people willing to explain everything. In one case they even disclosed their profit margin in the case of the GAP insurance (6%).
By contrast, my Tesla experience was the exact opposite. Schedule a test drive, walk into the store, get the car for 30 minutes, then run the numbers. When I told them I wasn't prepared to buy, I felt absolutely no pressure. In fact, the only pressure I felt the entire time was a statement that the federal tax credit is likely going to end and deliveries are mid-December. Even then, it was clear they were telling me for _my benefit_ (to not miss savings) rather than trying to get me to sign immediately.
I absolutely want that buying experience.
I tried going to four separate Hyundai dealers in my area about a year ago as my lease was ending. Every Elantra was marked up at least $5K and the dealers tacked on some other interior protection plan and other crap. I visited one of the dealers again recently and they are still doing the markups. Sorry, but I am not going to pay $33K for a car that should be $23K. It’s really sad I can not buy a car at MSRP…
Those will become "in-app" purchases before long. Tesla already has this with self-driving. Many car companies are charging to enable features with a software switch now, which are more what I mean by "in-app", i.e. they will move them from sale time to prompt you for seat warmers on a really cold day, then charge you monthly to keep it. It's the idea that I need to pay a subscription for a car feature that irks me
Sure, you can do other kinds of upsells, but those tend to be less scummy and when you don’t have a salesman breathing down your neck pressuring you it’s going to be less effective.
You filter by category: Automobiles. You still need to scroll through 15 pages of miscategorized vinyl wraps and seat covers, but eventually you see a few actual car listings.
One has lots of good reviews, but the reviews seem to be praising a completely different product, like a phone charger.
You shrug and click buy. Two days later, you receive a rebadged Geely Panda delivered from commingled inventory by a seller called JGLEWYU.
You fill out the return form and drop it off at the nearest Whole Foods parking lot.
Doesn't get rid of dealerships. Still interesting though.
Highest priority is to take down the ~5 US medical cartels. After that, I imagine only real estate matches anything that has anti-consumer and pro-business as US medical. Then.... after that, dealerships?
That was nice, but the main assurance is that I know who sold me the car and there will be no passing of the buck on warranty service or anything else. Amazon has no place in the transaction - even if they offered some or other thing, I don't trust them trying to weasel into the deal. I'd probably wind up with an expensive Armor All subscription I need to cancel.
My sense is that salespeople are primed by people who haven't done any research on what they want and doing all that on the spot at the dealership. They're also not exactly sure what they want and are susceptible to be convinced one way or the other. Even when they like a car, most people tend to be not sure and want to try another car or dealership. Hence the usual deal with pricing it higher, offering free accessories, offering a discount and all that jazz.
Last year I bought a used truck sight unseen from a dealer on the other end of the continent. They handled all the shipping hassle competently, working with the shipper, bank, title stuff in both states and everything else. They were 100% forthright on everything about the vehicle, including live video inspection, proof of maintenance, etc. I got exactly what I expected.
Amazon refunded every cent, sight unseen with one phone call, and placed no obligation on me to return the original unit; "dispose of it as you wish." Shortly after, the manufacturer said they were shipping me a replacement. Despite being told about the full refund the manufacturer didn't care and freighted me the replacement.
Free 9KW Westinghouse generator.
Isn't it 2 (or like 1.5) free generators, or did I get lost somewhere along the way?
- Buy faulty generator
- Get refund without return (free faulty generator!)
- Get replacement generator (free generator!)
It's also amazing how inefficient Amazon can be in some cases while still being one of the most profitable companies in history.
Maybe it's all down to being Prime for I don't know how long. Amazon just said "here's your money, kthxbye."
I bet the dealers still get to upsell you on body undercoating or whatever before the sale is finalized. Is amazon going to handle loan approval? Or do they think that people will just up their Amazon Prime chase card limits to 40K and pay for it the same as box of paper clips?
That'd be a pretty direct improvement in the modern car market.
Because now they're playing a repeated game [1].
(Say what you want about Amazon's reputation towards sellers,) but they generally swiftly handle stereotypical seller BS when it comes from sellers for other kinds of items.
"Be extremely careful and document everything - this happened to me with Amazon when I ordered a high end graphics card, and got an empty box. They said to send it back, but when they got it, forgot all about the part where I said the item was missing and claimed I didn’t complete the return. Then they claimed to my credit card company I never requested a return. Then they told the state AG that they had accepted my return when I filed a complaint (perjury!) In the end, I lost 2500$ USD."
Currently you have to manually opt-in to do this and enter the information in yourself.
I already frequently buy all of my vehicle maintenance items via AMZN.
I presume Amazon wants in on the Carvana-style predatory lending action.
But if Amazon isn't giving loans on these cars, yeah, it seems like an odd move.
https://www.autoweek.com/news/a1939026/buy-nissan-versa-note...
Unlike Amazon and the dealers on the platform, Costco is a brand I trust to do right by me and go to bat for me if participating dealers try to play games.
Amazon is simply letting Hyundai dealerships list car inventory on Amazon, Amazon isn't selling the cars.
I'll call it a win-win-win situation.
Now Aliexpress, that's where you can get it for half the price.
Automakers have been trying to coerce dealers to cut it out with the markups, threatening to allocate fewer vehicles to dealers who play games, but at the end of the day if enough dealerships refuse to comply, automakers are going to do what they have to do to keep moving metal.
Idealists have been clamoring for changing dealership franchise laws en masse and allowing automakers to sell directly, but that seems unlikely in the near term.
So if Amazon becomes a mega-dealer and forms a tight bond with one or more automakers, essentially guaranteeing good behavior (up-front pricing, no deceptive fees, etc), then the automakers can tell the PITA legacy dealerships to take a walk, sell the cars online in a high-quality, nicely branded portal with consistent pricing, and everyone is happy (except for the legacy dealerships).
This means all the hassles associated with going to dealerships, plus Amazon gets a cut and tells dealers how much to mark up cars for optimizing whatever they want to aim for.
How is this better for consumers exactly?
Peak Amazon was likely when their retail catalog was reliable, before Azure matured, and before streaming content licenses got expensive and started fracturing.
They’re still squeezing out growth in total financial position but every move has looked really slippery and scattered for a while now.
Mostly the same for Alphabet, Meta, and others in that generation.