The arrival of the Costco Auto program is tempting: “Buying a car made effortless!” Who among us would not respond positively to such a proposition?
Since 1989 Costcowholesale giant, offers members special pricing on recent and used vehicles through Costco Automatic program. The company says shoppers typically save $1,000 by using the service (a yearly Costco membership costs $60).
There are advantages and disadvantages to using this method, and potential buyers must be aware that Costco does not operate it as a charity: it works with “selected” dealers to which customers are directed; the US dealer network has approximately 3,000 participants. Ostensibly, both Costco and dealers want to make money when a deal is struck: dealers pay Costco a fee and make money when they close a deal.
Prices are set in the program, which is an advantage for those who do not like to haggle. Costco offers customers a research tool to check out vehicles by type and compare specifications and features. At some point, after entering a number of details online about the car you’re considering, you’ll actually visit the dealership of your choice, speak to an “authorized dealer contact” and discuss the fine print.
Regarding the “no negotiation” provision, it is possible to negotiate if you are trading in a car. As most of us know, this almost always involves haggling.
After speaking with a salesperson, shoppers can view the “Costco Members Only Price Sheet,” which, according to the Costco website, “displays pre-determined prices. Savings can be viewed in one of two ways: one version includes prices for all models available at a participating dealer; the second will display the VIN-linked price based on the vehicle selected, including any applicable manufacturer incentives and rebates.
Vehicles can be obtained by swapping dealerships with other stores or by placing special orders, although dealers are usually more willing to offload those cars that are already in stock to avoid paying monthly interest.
You don’t have to exploit Costco to get the incentives or rebates offered on a specific vehicle. Additionally, not using Costco means you can go to any dealership to purchase, or even pit them against each other, instead of going to the circumscribed stores that Costco works with.
The program itself does not offer financing, lending or leasing options, so this is usually arranged through the dealer or the buyer can go to the bank or lending institution of their choice. In many cases, the vehicle manufacturer may offer financing offers.
When it comes to dealer add-ons – a common tactic you can expect when purchasing a recent car – Costco says its members are not required to sign up for any, such as an extended warranty.
When it comes to used cars, Costco says under the program that “they are rigorously inspected and refurbished for quality. They are usually sold with a factory extended warranty. These vehicles can only be purchased from franchised dealers that adhere to manufacturer certification standards.
Here’s the list Frequently asked questions about the Costco Auto program.
