Costco is widely recognized for bulk groceries and affordable hot dogs, but their offerings extend to car buying through the Costco Auto Program. Since 1989, this program has facilitated millions in finding new and certified pre-owned vehicles with member-exclusive pricing. If you prefer a less stressful car buying experience, particularly avoiding price haggling, the Costco car buying program might be a viable option.
This review delves into the Costco Auto Program to help you determine if it aligns with your car buying needs.
Understanding the Costco Auto Program and How It Works
When you utilize the Costco Auto Program, you aren’t directly purchasing a vehicle from Costco. Instead, the program serves as a bridge connecting you with dealerships within their network, offering Costco members pre-negotiated pricing and incentives. This means your vehicle selection is limited to the approximately 3,000 participating dealerships across the U.S. and Puerto Rico.
The program encompasses new and certified pre-owned vehicles. Participating dealerships also handle trade-ins, lease options, and even RV purchases through the program. A key advantage touted by Costco is not just potential savings, but also an improved dealership experience. Dealerships must maintain high customer service scores to participate. For added assurance, Costco has a Member Advocacy group to assist members who experience dealer dissatisfaction.
Step-by-Step Guide to Buying a Car Through Costco Auto Program
To access Costco member-only deals, you can’t simply walk into any dealership and declare your membership. Here are the necessary steps:
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Vehicle Selection: Begin by visiting the Costco Auto Program website. Enter your ZIP code and specify “New” or “Pre-Owned” to start your search. You can refine your search by model, year, make, and trim. The website also provides tools for vehicle research and comparison. For pre-owned vehicles, the process is similar; you’ll browse inventories at nearby participating dealerships. After selecting your vehicle, you’ll be prompted for your name, contact information, and Costco membership number.
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Dealership Appointment: Once you’ve identified your desired vehicle, a list of participating dealerships with that model in stock will appear. Choose a dealership from this list and contact them to schedule an appointment.
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Price Review at Dealership: Upon arrival at the dealership, you will be connected with a Costco Authorized Dealer Contact (a dealer representative specifically trained and authorized for Costco members). They will provide your Costco Member-Only Price Sheet, outlining the prearranged price through the program. Reviewing this price sheet does not obligate you to purchase the vehicle, but it is the only way to access the exclusive Costco deal.
Is the Costco Auto Program Actually a Good Deal? – Pros and Cons
The Costco Auto Program offers a potentially streamlined path to a new car with possible savings, but it may not suit everyone, especially if you are not already a Costco member. Weighing the advantages and disadvantages is crucial to determine if it’s the right approach for your car buying journey.
Advantages of Using Costco Auto Program
- Simplified Car Buying Process: Expect a more efficient experience at the dealership. The Costco Member-Only Price Sheet should be prepared upon your arrival. With pre-negotiated pricing, you’re likely to spend less time at the dealership compared to traditional negotiation scenarios.
- Valuable Online Resources: The Costco Auto Program website offers helpful tools, including the ability to compare specifications of up to three vehicles simultaneously. You can also access car reviews and utilize a car finance calculator to estimate monthly payments.
- Elevated Customer Service Standards: Costco Authorized Dealer Contacts are trained to uphold Costco’s renowned customer service standards. Costco also employs secret shoppers to periodically assess and ensure these standards are maintained.
- Exclusive Member Savings: While Costco doesn’t publish average savings figures, they do highlight limited-time specials and manufacturer incentives on select makes and models, adding potential value for members.
- Discounts on Maintenance and Parts: Beyond vehicle purchases, Costco Auto Program members can also benefit from savings up to 15% on car parts, service, and accessories at participating service centers.
Disadvantages of Using Costco Auto Program
- Costco Membership Requirement: A prerequisite for using the program is a Costco membership. A Gold Star membership costs $60 annually, while the Executive membership is $120 per year. This annual fee needs to be factored into your overall savings calculation.
- Lack of Upfront Pricing Transparency: The prearranged Costco price isn’t revealed until you visit a participating dealership. If you are considering multiple makes or models, this lack of upfront pricing may necessitate visits to several dealerships to compare Costco prices, adding time and effort.
- Limited Dealer Network: Costco’s stringent dealer selection process means not all dealerships qualify for the Auto Program. Furthermore, even at participating dealerships, you must work with a certified Authorized Dealer Contact, which might require waiting for their availability.
- Not Universal Vehicle Coverage: While a broad range of vehicles are available through the program, not every make, model, and trim level is included. Vehicle availability depends on the inventory of partner dealerships in your area and whether they can fulfill factory orders for your specific requirements.
- Potential for Haggling Still Exists: Although designed to minimize haggling on the vehicle price itself, dealers may still attempt to add extras like extended warranties or appearance packages. Negotiation might still be necessary to remove unwanted add-ons from the final price.
Alternatives to the Costco Auto Program
Purchasing a vehicle is a significant financial decision. Exploring various buying methods ensures you find the most comfortable approach and potentially the best deal. If the Costco Auto Program doesn’t seem ideal, consider these alternatives:
- Independent Negotiation: If you enjoy negotiation, directly haggling with dealerships can potentially yield similar or even greater savings. This approach also allows you to choose any dealership, not just program participants. However, it requires time and effort in contacting multiple dealers and negotiating prices.
- Car Brokers: Car brokers act as professional car buyers representing you, not the dealership. They can find deals and negotiate on your behalf. However, brokers charge fees for their services, which needs to be weighed against potential savings.
- Competitor Car Buying Services: TrueCar is a popular alternative, freely accessible to everyone. It allows price comparisons across dealerships and even online car purchases in some cases. AAA also offers a car buying program for its members, similar to Costco, with member-exclusive deals and the added benefit of AAA auto loans and insurance. Navy Federal Credit Union partners with TrueCar to provide a car buying service for its members, offering member-only pricing and incentives through participating dealerships, along with Navy Federal auto loan options.
Verdict: Is the Costco Car Buying Program Worth It?
Whether the Costco Auto Program is “good” depends on your individual needs and preferences. It offers a less stressful, potentially cost-saving route to car buying for Costco members who value convenience and pre-negotiated pricing.
It might be a good option if:
- You are already a Costco member or plan to become one.
- You dislike haggling and prefer a streamlined process.
- You value customer service and appreciate Costco’s advocacy program.
- You are interested in a vehicle make and model available through the program’s dealer network.
However, it might not be ideal if:
- You are not a Costco member and don’t see value in membership beyond car buying.
- You enjoy negotiation and believe you can secure a better deal independently.
- You require a specific vehicle make or model not readily available through participating dealers.
- You prefer upfront pricing transparency before visiting a dealership.
Ultimately, the Costco Auto Program presents a viable option for a segment of car buyers. Weigh the pros and cons against your personal circumstances and compare it with alternatives to make an informed decision. Consider getting pre-approved for an auto loan to further streamline your car buying process, regardless of the purchase method you choose.
