Amazon to the Recue!

Jeff Bezos Can Make Car Dealers Honest

Last week’s breaking news was that Amazon entered an agreement with Hyundai to sell their cars on www.Amazon.com. The details are sparse, but we can conclude that Amazon will offer Hyundai buyers (and probably Kia and Genesis) a transparent, out-the-door price. Amazon will deliver the new vehicle directly to the buyer, or the buyer can pick it up at the Hyundai dealership. This goes into effect this January, and you can bet that all other auto manufacturers will jump on the bandwagon.

This will afford Hyundai buyers the luxury of avoiding junk fees, dealer-installed accessories, addendum labels, and bait-and-switch advertising. You probably are already a customer of Amazon…63% of Americans are. You know how Amazon works. The price you see is the price you pay. According to last week’s press release, Amazon will also provide financing, which historically has been car dealers’ largest profit center.

You can still buy Hyundais directly from the Hyundai dealers, but now you’ll have Amazon’s out-the-door price to compare. Never in the history of auto retailing has the consumer had access to a true, transparent out-the-door price to shop and compare with the dealers’ competition.

There’s bound to be a huge hue and cry and massive litigation by the car dealers, their organizations, and probably some manufacturers who will be timid about admitting that this is really what they hoped for all along. You’ll see U.S. Senators interrogating Jeff Bezos and/or his CEO and probably the Justice Department going after Amazon, although they’ll risk the ire of car buyers/VOTERS.

All fifty states have enacted franchise laws that make it almost impossible for anyone except a car dealer to retail a new car. The details as to how Amazon and Hyundai were able to find the loophole in these state laws are unclear at this time. Tesla successfully navigated these laws and, if you’ve bought a Tesla, you know what a seamless, transparent, and pleasant experience it is.

I must comment on the irony that the two richest people in the world, Elon Musk and Jeff Bezos, will take credit for changing the retail automobile business from the worst experience to one of the best.