Why Automakers Are Shifting to Online Car Sales

Online vehicle sales continue to increase yearly, with companies like Tesla (TSLA -1.15%) leading the charge. Now, several other manufacturers have partnered with the e-commerce giant Amazon (AMZN -3.23%) to try to stay ahead of the trend. Here’s how online options continue to reshape how people and dealers think of car sales and what it could mean for car prices in the future.

Convenience is King

When you think of buying a car, you likely envision a dealership lot packed with new and used cars, and sales staff eagerly ready to try and close a deal. While this method of sales is still the most prominent, it continues to see a growing percentage lost to online sales.

Online car sales eliminate the face-to-face interactions you normally find at dealerships. For many people, dealing with pushy or sly sales staff is a big negative, enough so that they are willing to fully forgo seeing and even test-driving their vehicle to avoid the hassle. It’s this type of client that continues to fuel the online market.

Consumers Turn Towards Online Options

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These findings all point to one trend: more buyers want to complete as much of the car-buying process online as possible.

A recent ConsumerAffairs study revealed facts about the recent expansion of online auto sales platforms. The researchers found that the online car market is on track to reach $722.79B by 2030, representing an annual growth rate of 17.5% over the next ten years.

Source – Federal Reserve Bank of St. Louis

Another McKinsey & Company study showed that 39% of dealers now support a completely online buying experience for their customers. This statistic goes hand in hand with the revelation that a growing number of future car buyers would consider buying their vehicle online.

Why Many Buyers Still Prefer Dealership Visits

However, the majority of car purchasers still want to go into a local office and have a face-to-face buying experience. Specifically, 23% said they would use the internet for preliminary purchase tasks but would want to go into the dealership directly to complete the deal.

Even more telling is that 42% of those surveyed stated that they would consider switching brands if the online purchase experience was mishandled, inconvenient, or simply failed to meet their expectations. These final statistics have led many dealerships to partner with already established e-commerce providers.

Amazon Auto Sales

Amazon, one of the world’s largest and most successful e-commerce platforms, continues to benefit from this shift in consumer spending habits. The company added support for car sales in 2024 after competitors like Carvana (CVNA -0.89%) and CarGurus (CARG +0.16%) reported record sales.

Amazon, which already has the trust of millions of users across the globe, is seen as an efficient way for manufacturers to enter the market without having to make massive investments into online platforms. This maneuver is much safer as dealers acknowledge that they could drop the ball in terms of providing a comfortable customer experience when shifting priorities to online sales strategies.

Streamlined Auto Sales

Amazon Auto Sales streamlines the entire process, making it easier than ever for you to browse and purchase new or used vehicles. The company provides everything needed to complete the entire sales process. This strategy enables dealers to leverage Amazon’s large customer base and its years of experience in providing a streamlined e-commerce experience.

Interestingly, Amazon has taken a unique approach to partnering with dealerships in that it doesn’t take any percentage of the car’s selling price. Instead, the company focuses its revenue-generating efforts on advertising. Notably, Hyundai was the first to integrate Amazon sales into its business model and has seen great success.

Ford Motor

This week, Ford Motor Company announced that it would strategically partner with Amazon. The company stated that clients can now browse and purchase certified used vehicles using Amazon Autos.

The move enables interested parties to browse used cars, look up reviews, and avoid pushy dealership staff. Speaking on the decision, Ford executives commented that the maneuver will help to drive sales and meet customer expectations, especially in regards to selling EVs.

Why State Laws Limit New-Car Online Sales

In the United States, direct-to-consumer vehicle sales are regulated at the state level — not federally. Many states still enforce franchise laws that prevent legacy automakers like Ford and GM (GM +0.28%) from selling new vehicles directly to consumers. As a result, most traditional manufacturers can only offer used vehicles online through platforms like Amazon, while new vehicle sales must still be completed through a licensed franchise dealer in states where these restrictions apply.

Consequently, only those seeking used Ford vehicles can shop, finance, and buy their next car without ever leaving their home. The process has been streamlined. Once the buyer makes their purchase, they can go to the closest dealership to pick up their ride. This strategy will shorten the sales cycle for many people and should help Ford compete with new automakers like Tesla and Rivian (RIVN +0.86%), who both offer their cars to consumers directly, enabling them to save thousands on each vehicle sold.

Ford Blue Advantage

To start off, Ford will only offer Blue Advantage certified used vehicles to customers. These vehicles have undergone a rigorous inspection to ensure that they drive smoothly and are without any major defects. Notably, there are 3 levels to this certification.

The gold certification is the highest level for Ford used vehicles. To qualify for this level of certification, the vehicle has to be less than 6 years old and have fewer than 80k miles. Each of these vehicles must pass a 172-point inspection.

The next level is the Blue certification, which includes vehicles up to 10 years old and less than 150K miles. These cars have passed a 139-point inspection. They also include a 4-year limited warranty on major components.

Perhaps the most interesting certification is for Ford’s EV protocols. EV certified vehicles must be under 6 years old and have less than 80k miles to qualify. These EVs must pass a 127-point inspection, which includes testing the battery for safety, quality, and performance.

The Roll Out

Ford’s Amazon maneuver will start in a few select areas. Currently, the project is active in Los Angeles, Seattle, and Dallas. Shoppers in these areas can use Amazon Auto to browse the inventory at Ford dealers within a 75-mile radius.

Keenly, they can use Amazon’s sorting features to find the exact car they want and can even complete all the financing online. However, the final pickup will need to take place at the local dealership.

Why Dealerships Are Embracing Amazon Auto

Already, Ford has seen a positive response from both buyers and dealers. The company noted that ~170 dealerships have opted into the Amazon sales strategy. These locations still hold a lot of responsibility in terms of the pricing, pickup times, and future maintenance.

Benefits of Amazon Auto for Dealerships

It’s easy to see why consumers would benefit from online automotive sales. However, they aren’t alone. Dealerships have a lot to gain from joining Amazon Auto Sales. For one, Amazon provides data and advertising tools that enable these firms to target their audience more precisely. Tools like keyword and product targeting help to enhance sales strategies without kicking up overhead.

Hyundai

Hyundai was the first to trust Amazon with online vehicle sales, announcing the partnership in 2023 and rolling out sales on Amazon Autos starting in 2024. Since then, the company has seen consistent growth in its online sales department. Currently, you can browse a full showroom on Amazon Auto, including both new and used vehicles.

Notably, Hyundai isn’t required by law to sell new vehicles through dealerships like Ford and GM, giving the company more flexibility to meet changing consumer sentiments.

Online Car Sales – The New Frontier

There are several reasons why online auto sales continue to expand. For one, people have grown tired of the pushy salespeople, and many dread spending days shopping around. These shoppers desire the convenience of seeing their local inventory from their home. Online portals seem to be the answer.

Online auto sales are on the rise. Part of this growth can be attributed to the growing number of car sales apps currently available. These platforms make it simple to scroll through and compare autos in your budget. As such, there are now a variety of options for those seeking to purchase a car in the coming months.

Hurdles to Online Sales

While the statistics show that online sales are up, there are still many hurdles that must be overcome before this method of selling vehicles can ever match the traditional approach. Studies have shown that car buyers are increasingly turning towards online tools to conduct research and comparison shopping for vehicles. However, the majority, roughly 95%, still prefer to come into a dealership for the final signing processes.

This percentage is so high because there is still a lack of trust between consumers and dealers. This trust barrier only increases as you venture into older vehicles. The majority of people still want to see and test drive cars before they make their final decision, a task that’s not possible to experience online.

Investing in E-Commerce

Amazon

For investors, Amazon’s expansion into automotive retail reinforces why the company continues to dominate global e-commerce — and why its long-term growth story remains intact. While online car sales are still a small segment of overall vehicle purchases, Amazon’s entry demonstrates its strategy of targeting high-friction, high-value markets where its logistics scale, customer trust, and platform efficiency create a structural advantage.

Automotive retail is one of the last major consumer categories still anchored in local, offline experiences. By partnering with manufacturers like Hyundai and Ford, Amazon isn’t just listing cars — it’s positioning itself as the digital infrastructure layer that traditional automakers lack. This mirrors the same playbook behind AWS, Fulfillment by Amazon, and its third-party marketplace: build the rails, then let industries run on top of them.

Critically, Amazon’s automotive initiative is designed to be margin-friendly. By taking revenue primarily from advertising rather than vehicle sale commissions, Amazon gains exposure to a massive market without the inventory risk or regulatory burden faced by dealers. If adoption accelerates, it could create a new advertising vertical comparable to its lucrative Sponsored Products ecosystem.

For shareholders, this signals that Amazon is still finding new categories to digitize — even mature ones worth trillions. As retail, logistics, automotive, and cloud computing converge, Amazon’s expanding data and distribution advantage may strengthen its moat for years to come.

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