Amazon, Vroom Expand Auto Financing & Selling Roles

Two events this month showed that selling cars online is expanding not just in volume, but in ways that credit unions might note.

First, Hyundai announced new features on the Korean automaker Evolve’s showroom on Amazon’s website that allow shoppers to select available new cars, pick options and contact participating dealers selling them.

Second, online used car seller Vroom announced Wednesday that it plans to buy United Auto Credit Corporation of California for $300 million, in a deal expected to close by early next year. UACC specializes in subprime borrowers, which it said will complement existing lending vendors used by Vroom. But Vroom also said it plans to integrate UACC’s technology platform to develop Vroom’s captive financing operation.

A news release from Vroom said “the transformational acquisition accelerates Vroom’s strategic objective to establish captive financing capabilities to support sales growth, improve unit economics and create long-term value for Vroom’s shareholders.”

“Competitive financing is a fundamental component of Vroom’s value proposition and adding proprietary lending capabilities unlocks significant value for our business and our customers,” Vroom CEO Paul Hennessy said.

Vroom’s website said it allows buyers to finance through its captive arm, about a dozen vendor lenders or the buyer’s own lender.

Carvana, the leader in online used car sales, has also developed its own in-house lending capability.

Meanwhile, the Hyundai Evolve showroom, launched in 2018, now allows shoppers to configure and estimate the price of their desired Hyundai vehicle, locate real-time inventory and contact dealers to complete the sale.

José Muñoz, president/CEO of Hyundai Motor North America, said its mission is “to be the leader in a seamless, digital and transparent retail experience in partnership with our dealer body.

“The events of the last 18 months have made it clear that many consumers want a car buying process that aligns with how they purchase nearly everything else in their life,” Muñoz said. “Amazon is a leading retailer and we’re excited to continue collaborating with them on digital retail experiences.”

A CU Times test of the system led it to a dealership in Connecticut, where financing through the Hyundai captive was recommended but online buyers were also allowed to buy through its lineup of indirect lenders, which at least included Navy Federal Credit Union of Vienna, Va. ($147.9 billion in assets, 10.6 million members).

The site itself provides a tool that allows shoppers to estimate their monthly payments based on the cost of the vehicle being researched, interest rates by credit score ranges and a variety of terms.

Alan Moss, vice president of global ad sales for Amazon Ads, said the company looks forward to “a deeper collaboration on new features that enhance the showroom and make it even more helpful for customers as they discover and research Hyundai vehicles.”