Amazon's Car Sales Bet Is Getting Bigger With New Brands and More Cities -- WSJ

Dow Jones04-13 17:30

By Sean McLain

Now you can buy a brand-new Corvette on Amazon.com.

The e-commerce giant has quietly expanded its car sales business over the past year and a half. What started as an experiment with Hyundai Motors has grown in recent months to include vehicles from Kia, Mazda, Subaru, Chevrolet and Jeep.

The service, called Amazon Autos, is active in over 130 cities, including Los Angeles, Dallas and New York, the company said.

In expanding the program, Amazon is now tackling one of the biggest retail businesses in the U.S. and one of the last major purchases that is still difficult to make online: new cars. Around $1.3 trillion worth of cars were sold by dealerships in the U.S. last year, according to the National Automobile Dealers Association.

The Amazon Autos program launched at the end of 2024. It allows customers to browse and purchase a car from nearby participating dealerships. The aim is to let customers complete much of the purchase and financing paperwork from home, cutting down on the amount of time spent in a physical store. Dealers pay a fee to have their cars listed on Amazon, but shoppers don't incur additional costs if they pull the trigger.

Car buying is another traditional business that Amazon, whose recent expansions include healthcare, groceries and big-box retail, has the potential to disrupt. Yet Amazon says it doesn't plan to cut out dealerships -- even if it could upend the traditional car-buying process.

For dealers, the benefit is getting their vehicles in front of buyers while they are scrolling through their phones on their couch.

"I think it's a really innovative product," said Matthew Phillips, who owns a Kia dealership in Glendale, Calif., that recently began listing new vehicles on Amazon.

Thus far, Phillips has sold only one vehicle on Amazon in the past month and a half, a $55,000 Kia Carnival minivan. He expects the business to grow. "Customers have a level of comfort with Amazon, but it's definitely just in the starting phase," he said.

Amazon said it had signed up hundreds of dealers thus far. "While still early days, we are seeing a strong response from customers and dealers and we continue to expand vehicle availability across the country," said Fan Jin, the director of Amazon Autos.

The potential payoff for Amazon extends beyond grabbing a chunk of the auto sales business.

Car companies are some of the biggest advertisers. This year alone, they are projected to spend over $30 billion promoting their products, according to Emarketer.

Advertising is one of Amazon's fastest-growing and most lucrative business segments, said Sky Canaves, a retail and e-commerce analyst at Emarketer. "Amazon is making a big push for advertisers who don't typically advertise on Amazon," Canaves said. With Amazon Autos, the company can attract more ad spending from carmakers and dealers.

First, Amazon has to prove that people want to buy their cars not only online, but from the same place they buy toothpaste.

While companies like Carvana have popularized purchasing a used car online, the way Americans buy a new vehicle hasn't changed much. Buying a new car is a complex financial transaction and heavily regulated by state and federal law. Generally, it must be done at an actual dealership and by signing reams of physical paperwork.

Dealers say that the current means of buying a car, painful as it is, remains mostly an in-person process because of necessity. Vehicle purchases are complex, involving lenders, a web of manufacturer discount programs and credit checks, which aren't easily replicated online.

Customers also usually want to see a car in person before they spend, on average, $50,000 on one. As a result, many dealers are skeptical that Amazon or anyone else will ever move the majority of car sales onto the internet.

Alex Ruiz, general sales manager at South Bay Hyundai in Torrance, Calif., an early participant in the Amazon program, has seen some of the pitfalls firsthand.

"Before it was click, click, click and then the buyer would show up, sign four documents and leave with the car," Ruiz said of the early days of Amazon Autos. As its user base grew, he said, "we started to run into issues."

Ruiz said customers were showing up with incomplete or incorrect paperwork, or tried to trade in vehicles registered in a spouse's name rather than their own. At times, the vehicle the Amazon buyer wanted had already been purchased by someone who showed up at the physical dealership. (Amazon said it sometimes provides "guided support" on some car purchases made on the website.)

The dealership sold around 10 vehicles a month in the early days of the Amazon partnership; now it is closer to five. "I think it will take off, but it will take time," Ruiz said.

Dealers, and even automakers, have tried various methods to sell new cars online, particularly during the pandemic when many physical stores shut down. Most of those efforts have had limited traction with buyers.

The overwhelming majority of new cars and trucks are bought by people going to an independent, franchised dealership. The lone exceptions have been electric-vehicle newcomers such as Tesla, Rivian or Lucid Motors, which sell directly to customers online and have their own store locations. This model has been challenged in court by traditional dealers in several states.

Still, there is evidence that many of us would skip the hassle of the dealership, if we could. The complex and time-consuming ordeal has even spawned a cottage industry of consultants to help people navigate it. Making car buying more seamless through Amazon could mitigate some of that pain.

"One car survey showed customers would rather have a root canal than negotiate a car at a dealership," said Jesse Toprak, a former automotive analyst who now runs OptiCar.AI, an online marketplace for cars.

Moreover, dealer websites aren't especially known for being user-friendly, nor do they always accurately list what is in stock.

Toprak said he has seen firsthand how dealers have tried and failed to sell vehicles online for over a decade, working as a consultant or analyst on some of these projects. "You went to the website, put a deposit down, they guaranteed you would be out the door in 30 minutes. It didn't scale that well at the time," Toprak said.

Yet Americans are accustomed to buying things online now, Toprak said. That expectation could extend to car buying, especially as millennials continue to grow their families.

"A suburban parent buying a Kia is a digital native," Toprak said. "It's the new baseline."

Write to Sean McLain at sean.mclain@wsj.com

 

(END) Dow Jones Newswires

April 13, 2026 05:30 ET (09:30 GMT)

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