FORT LAUDERDALE, Fla. �� AutoNation, the nation's largest auto retailer, is investing in Vroom, one of the largest online retailers of used cars.
Fort Lauderdale-based AutoNation said Tuesday that it invested $50 million in New York-based Vroom, which gives it an ownership stake of 7 percent and further extends AutoNation's focus on preowned vehicles.
"We think it's a good investment as a first step, and we'll see where it leads," CEO Mike Jackson said on CNBC Tuesday.
Jackson said while AutoNation also sells online, "there's plenty of opportunity for both," with a preowned market of about 40 million vehicles a year.
He also said AutoNation's used vehicle business "was up significantly" in the third quarter that ended Sept. 30, and he expects that trend to continue as interest rates rise.
"There's an affordability issue that's on the table, and many customers are choosing preowned rather than new," said Jackson, who also is chairman of the Federal Reserve Bank of Atlanta.
In 2016, AutoNation began moving to a "no haggle, one price" strategy at its nationwide dealerships and expanding its brand with new auto service centers and a focus on used vehicles.
Last year, AutoNation announced a maintenance partnership with Alphabet's self-driving startup Waymo, and recently expanded it to offer Phoenix, Ariz., customers the use of a Waymo self-driving vehicle while their cars are serviced at an AutoNation dealership.
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