Amazon’s initiative with Hyundai to offer a digital sales option for dealers has introduced leasing.
Fan Jin, director of Amazon Autos, announced the leasing rollout at the J.D. Power Auto Forum on April 15, Automotive News reported.
Sales on the new website, which is only available in the U.S., were previously limited to cash purchases — secured through an online deposit — or financing through a single lender, Hyundai Capital.
However, having just one finance option deterred many dealers from participating in the program, as car loans are a significant source of profit. If a customer couldn’t get a loan through Hyundai’s in-house lender, Amazon would send them to a physical dealership to investigate other options, in which case the ecommerce site acts as a lead generator rather than a transactional marketplace.
Hyundai Capital remains the primary lender, but adding a lease option “helps cast a wider net,” Automotive News reported. It also makes buying an electric vehicle more attractive because Hyundai EVs are eligible for the $7,500 federal tax credit through leasing only, the news site explained.
Jin told the forum audience that it is seeking ways to boost dealership profits and that adding lenders and credit unions to the program will help.
“We have a whole list of experiments queued up to see how we can improve attach rates for service and protection products because that’s such a valuable area of profitability for dealers,” Jin said.
She also revealed that Amazon Autos relies on ads to make money and does not take a commission on closed sales.
“We expect dealers, and OEMs, to find this to be a valuable channel with lots of customers that they can go and target and advertise to,” Jin said. “We expect those revenues to really power our costs of the marketplace.”
After a year-long pilot test in cooperation with Hyundai USA, Amazon Autos launched publicly in December, and it has since expanded to brand dealers in 68 markets.
To date, the program has been limited to new vehicles, but in March, Jin said used-car sales would be its next milestone. He didn’t give an update on the used piece during the J.D. Power event.
