Amazon Enters Used Car Market with Certified Pre-Owned Vehicles

Amazon has expanded its Autos service to include certified pre-owned and used vehicles, allowing dealers to list their inventory on the platform. The service starts in Los Angeles and will expand to additional cities. Shares of Carvana are down 2% on the news. Other online auto dealers include Lithia & Driveway, Asbury Automotive, AutoNation, and CarMax.

Amazon has expanded its Autos service to include certified pre-owned (CPO) and used vehicles, allowing dealers to list their inventory on the platform. The service, which began in Los Angeles, is set to expand to additional cities in the coming months. This move follows Amazon's initial foray into the automotive market through a partnership with Hyundai in late 2024, which allowed customers to browse and purchase new vehicles directly on Amazon's site.

Amazon's new offering provides customers with transparent pricing, free vehicle history reports, and a return policy, enhancing the ease and trust of online car shopping. The used and CPO vehicles are initially sourced from Hyundai dealerships participating in the new-car program. However, Amazon plans to expand its network by partnering with additional dealerships, signaling a deeper push into online car sales.

At launch, used and certified pre-owned listings will be limited to the Los Angeles area, but Amazon plans to roll out availability nationwide in the coming months. This follows the model set by Amazon’s new-car marketplace, which currently offers listings in more than 130 cities across the U.S. Customers purchasing a used or certified pre-owned vehicle through Amazon will enjoy many of the same benefits as new-car buyers, including transparent pricing, no haggling, and a three-day or 300-mile return policy. Additionally, buyers are covered by a minimum 30-day or 1,000-mile limited warranty.

The news has had an impact on the stock of Carvana, which saw its shares fall by 2% on the announcement. Other online auto dealers, such as Lithia, Driveway, Asbury Automotive, AutoNation, and CarMax, are also likely to be affected by Amazon's entry into the used car market. These companies will need to adapt their strategies to compete with Amazon's expansive reach and customer-friendly policies.

Amazon's expansion into the used car market is a significant step in reshaping how people buy cars. By blending dealership inventory with the ease of online shopping, Amazon is positioning itself as an important player in the car-shopping space. As the program expands to more cities and dealerships, Amazon could become a go-to destination not just for gadgets and groceries, but for your next car as well.

References:
[1] https://www.motortrend.com/news/you-can-now-buy-used-and-certified-pre-owned-vehicles-on-amazon
[2] https://www.theverge.com/amazon/718352/you-can-now-buy-a-used-car-on-amazon