Costco, famous for bulk groceries and affordable food courts, also offers a car buying program. Since 1989, the Costco Auto Program has aimed to provide members with a less stressful car buying experience, offering exclusive pricing on new and certified pre-owned vehicles. If you’re someone who dreads negotiating car prices, the Costco car buying program might seem appealing.
This Costco Car Buying Program Review will explore if it truly delivers a better car buying experience and if it’s the right choice for you.
Understanding the Costco Auto Program
It’s important to clarify that the Costco Auto Program isn’t about buying cars directly from Costco warehouses. Instead, Costco partners with a network of dealerships. The program connects Costco members with these participating dealerships, offering pre-negotiated discounts and incentives. This means your vehicle purchase will be through one of the approximately 3,000 dealerships in the U.S. and Puerto Rico that are part of the Costco Auto Program network.
The program offers access to both new and certified pre-owned vehicles. Participating dealerships also handle trade-ins. You can even utilize the program for leasing a car or purchasing an RV.
The potential benefits of the Costco Auto Program extend beyond just price savings. Costco emphasizes customer service, partnering only with dealerships that maintain high customer satisfaction scores. For added peace of mind, Costco provides a Member Advocacy group to assist members who experience issues with a participating dealer.
Step-by-Step: Buying a Car Through Costco
To take advantage of Costco member deals on cars, you can’t simply walk into any dealership and flash your membership card. There’s a specific process to follow to access member-only pricing:
1. Choose Your Vehicle
Begin your search on the official Costco Auto Program website. Enter your ZIP code and specify whether you are interested in a “New” or “Pre-Owned” vehicle. The website allows you to refine your search by model, year, make, and trim level. You can also use the platform to research different vehicles and compare specifications.
For pre-owned vehicles, the process is slightly different. Instead of selecting a specific vehicle, you will browse the inventories of participating dealerships in your vicinity.
Once you have identified the vehicle you’re interested in, you’ll be asked to provide your name, contact details, and Costco membership number.
2. Connect with a Participating Dealership
After selecting your desired vehicle, the website will display a list of dealerships in your area that participate in the Costco Auto Program and have the car you want in stock. Choose a dealership from this list and contact them to schedule an appointment.
3. Visit the Dealership and Review Costco Pricing
At the dealership, you will be assisted by a Costco Authorized Dealer Contact (a dealer representative specifically trained and authorized to work with Costco members). This contact will provide you with a Costco Member-Only Price Sheet. This sheet details the pre-arranged price available to you through the Costco Auto Program.
Reviewing the Costco Member-Only Price Sheet doesn’t obligate you to buy the car. It simply provides you with the exclusive Costco member pricing. This step is necessary to see the potential savings you’re eligible for.
Costco Auto Program: Weighing the Pros and Cons
The Costco Auto Program offers a potentially smoother car buying experience and possible savings. However, it may not be the ideal solution for everyone, especially if you are not already a Costco member. Consider these advantages and disadvantages to determine if it aligns with your car buying needs.
Advantages of the Costco Auto Program
- Simplified Car Buying Process: Upon arrival at a participating dealership, your Costco Member-Only Price Sheet should be readily available. Since the price is pre-negotiated by Costco, the transaction is often quicker than traditional car buying that involves extensive negotiation.
- Online Research Tools: The Costco Auto Program website provides helpful tools for car buyers. You can compare specifications and features of up to three vehicles simultaneously. Additionally, you can access car reviews and utilize a car finance calculator to estimate monthly payments.
- Enhanced Customer Service Standards: Costco Authorized Dealer Contacts receive specific training to meet Costco’s customer service benchmarks. Costco also conducts periodic secret shopper evaluations to ensure these standards are maintained at participating dealerships.
- Exclusive Member Deals: While Costco doesn’t publicize average savings amounts, they frequently advertise limited-time specials and manufacturer incentives on specific makes and models, adding potential value for members.
- Discounts on Maintenance and Parts: The benefits of the Costco Auto Program extend beyond vehicle purchases. Members can also receive discounts of up to 15% on car parts, service, and accessories at participating service centers, offering ongoing savings.
Disadvantages of the Costco Auto Program
- Costco Membership Requirement: To use the Costco Auto Program, you must be a Costco member. A Gold Star membership is $60 annually, and an Executive membership costs $120 per year. This membership fee adds to the overall cost and should be factored into your savings calculation.
- No Upfront Price Disclosure: You won’t know the final purchase price until you visit the dealership and receive the Costco Member-Only Price Sheet. If you are considering multiple car brands, this lack of upfront pricing transparency may require visits to several dealerships to compare Costco prices.
- Limited Dealership Network: Costco has a rigorous selection process for dealerships participating in the Auto Program. Not all dealerships qualify. Furthermore, even at participating dealerships, only certified Authorized Dealer Contacts are authorized to handle Costco program sales. You may need to wait for an available Authorized Dealer Contact at your chosen dealership.
- Vehicle Make and Model Limitations: While the Costco Auto Program offers a wide selection of vehicles, not every make, model, and trim level is available through the program. Availability depends on the inventory of partner dealerships in your area and whether they can order your specific configuration from the factory.
- Potential for Haggling on Add-ons: While the Costco program aims to provide a no-haggle price on the vehicle itself, you might still encounter pressure to purchase add-ons at the dealership. Dealers may try to include extras like extended warranties or appearance packages. Removing unwanted add-ons from the final price might still require some negotiation.
Alternatives to the Costco Auto Program
Buying a car is a major financial decision. Exploring different options can help you find the best approach for your comfort level and potentially secure the best possible deal. If the Costco Auto Program doesn’t seem like the perfect fit, consider these alternatives:
Independent Negotiation
If you enjoy negotiation, or are willing to try, you might achieve similar or even greater savings by negotiating the car price yourself at a dealership of your choice. Direct negotiation provides flexibility in choosing any dealership, not just those in the Costco network.
However, negotiating on your own can be time-consuming. It requires contacting multiple dealerships to compare prices and investing time in the negotiation process itself.
Car Buying Brokers
A car broker acts as your personal car buying representative. They work for you, not the dealership, and can negotiate on your behalf to find the best deals. Brokers typically charge a fee for their services, so consider this cost when evaluating potential savings.
Competitor Car Buying Programs
Several other car buying services exist. TrueCar is a popular platform that is free for all users. TrueCar allows you to compare pricing from various dealerships and even offers online car buying options in some cases.
AAA also offers an Auto Buying Program, similar to Costco’s, providing exclusive deals at participating dealerships for AAA members. AAA extends its services by offering auto loans and car insurance as well.
Navy Federal Credit Union partners with TrueCar to provide a car buying service exclusively for its members. Like Costco and AAA, it offers member-only pricing and incentives through participating dealerships. Navy Federal also provides auto loans for members.
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