After our family car's air conditioning went out for the third time in two years, my wife and I decided not to put any more money into it. So I started the process: beginning a list of pros and cons, doing the research, creating a short list.

Besides being extremely time consuming, that part isn't so bad. But over the weekend, we started visiting dealerships. And the first salesman we dealt with confirmed why I hate this process so much.

This guy was super dramatic--he took ten minutes to explain to me what dual-zone climate control is, as if my last car purchase was in 1980. And once we found a car we actually liked, he kept claiming to find "special discounts" to bring the price down...in a process I'd describe as far from "transparent."

It was like being in a bad reality TV show. I half-expected Ashton Kutcher to jump out and tell me I was being punk'd. (Yes, I realize that show ended 10 years ago.)

So you may understand why the following caught my attention.

Last week, reining king of e-commerce Amazon announced a new portal called Amazon Vehicles. It's described as a "car research destination and automotive community," where users can view hundreds of details on the car of your choice, including images, videos, specs, and customer reviews. There's also the possibility to pose (and answer) car-related questions.

Right now, Amazon Vehicles is simply a research tool. But it has the potential to be much, much more.

The Future of Buying Cars

Notice what he had to say:

Amazon is the 800-pound gorilla of online shopping, but the new portal doesn't allow vehicle purchases--at least, not yet. But the new site is a sign that Amazon is thinking about ways to insert itself into the car-sales process, and that has implications for a lot of players in the business of cars.

Amazon's content seems to duplicate what sites like Edmunds's and Kelley Blue Book already provide, says Rosevear. And there's no obvious revenue source for Amazon in the site as it is today.

But what if Amazon suddenly became a place to buy cars?

For comparison's sake, Rosevear cites TrueCar, an online service that matches car-shoppers with dealers that have agreed to honor a pre-set, non-negotiable price.

"TrueCar's shares dropped 14% in the wake of the Amazon Vehicles launch," says Rosevear. "The concern for TrueCar investors is obviously Amazon's scale and market power. While TrueCar is doing well with an average of 6.7 million unique visitors per month last quarter, Amazon is one of the most-visited web sites in the world with roughly 300 million active users."

"The conclusion is obvious," Rosevear asserts. "If Amazon were to decide to muscle into TrueCar's turf, it would probably be a short battle."

Disruption Is Coming

Much as Amazon has turned the world of traditional retailers upside-down, the e-commerce juggernaut seems poised to do the same for automobiles. I, for one, would be happy to find just the car I want for a decent price--no haggling required. (TrueCar's success strongly supports the idea that I'm not the only one.)

What does this mean for auto dealers and salespeople across the country?

I know what Ashton Kutcher would say.

Published on: Sep 5, 2016
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