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    The Dealer Finance Office – Amazon’s Car-Buying Pilot Falls Short in Saving Customers

    Amazon’s Car-Buying Pilot Falls Short: You Still Need to Visit a Dealer for Paperwork

    When Amazon and Hyundai unveiled their plan to revolutionize car buying through the popular online marketplace, many people expected a seamless, all-digital purchasing experience with fixed prices. However, the reality of Amazon’s pilot program is quite different.

    The program, which is currently limited to a few states and exclusively available for Amazon employees, still requires buyers to physically visit a dealership to complete the necessary paperwork. In a new video, CNBC explains that the program is far from achieving the simplified, one-click online transaction that consumers had hoped for.

    Jim Appleton, President of the New Jersey Coalition of Automotive Retailers, doubts that this program offers any significant benefits beyond existing lead-generator programs such as Autotrader or Cars.com. This highlights the challenges that Amazon will face in meeting consumers’ expectations and obtaining buy-in from dealers. Customers are looking for fast, transparent transactions with fixed prices, all of which require addressing various obstacles.

    One major obstacle is that Amazon lacks a license to sell new cars directly. Many states have franchise laws that mandate new-car transactions to go through licensed dealerships. Franchise agreements with automakers also impose geographic restrictions on who can sell new cars. Therefore, Amazon is partnering with Hyundai dealerships to procure the vehicles and legally execute the transactions. This reliance on dealers poses a significant challenge to disrupting the traditional dealer model.

    In addition, several states mandate “wet signatures” on new-car transactions, making it impossible to complete the transaction digitally. This requirement forces customers to visit the dealership’s finance office, where they often encounter add-ons, hidden fees, and aggressive upselling tactics.

    While Amazon’s long-term goal is to provide fixed-price transactions entirely online, with customers picking up their vehicles from designated Amazon sections in participating dealerships, dealers are reluctant to abandon high-pressure sales and negotiation tactics. These tactics generate profit, as skilled negotiators may not secure the best deal for the dealership.

    Although the current pilot program is yet to address these structural issues, it would be premature to dismiss Amazon’s ambitions. The company often modifies its offerings between pilot programs and final releases. If fixed-price Amazon transactions become the primary way to reach consumers, dealerships may adapt their practices.

    For now, consumers seeking fixed pricing, liberation from high-pressure sales tactics, and fewer pitfalls in the finance department will have to resort to companies like Tesla or Rivian, where online sales are an integral part of the business model. Until then, attempts to modernize the traditional dealer experience will likely encounter similar roadblocks.

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