The Costco Auto Program has been around since 1989 and offers members-only pricing on factory certified and select pre-owned vehicles through partnerships with dealers throughout the United States.
To use the program, you can either search for a specific vehicle model or a participating dealership near you, show your Costco membership card at the dealership, and view the Costco member-only price sheet on qualifying vehicles. Costco has claimed that the typical member saves about $1,000 through the program, although the actual savings can vary.
In addition to the broad members-only pricing, the Costco Auto Program often has special incentives on certain vehicles. For example, as of this writing, Costco members can get an incentive of $1,250 or $1,500 on certain pre-owned Volvo vehicles. There are several other offers on the program's website for both new and used cars, and these can be combined with your member pricing or any other manufacturer's offers.
Not only does the Costco Auto Program claim to offer members-only pricing, but it only offers pre-owned vehicles that are either factory certified or undergo a rigorous inspection and have at least six months remaining on their original factory warranty.
One of the biggest drawbacks to the program is that to see any actual pricing, you not only need to enter a bunch of information online, but you'll need to make an appointment with a participating dealer and physically go there. Costco claims that members will not be pressured into buying, but it would certainly be preferable to be able to simply access members-only pricing online. It's also worth noting that you may still have to negotiate when it comes to your trade-in, and other aspects of buying a car such as financing and obtaining auto insurance aren't part of the program.
Does the Costco Auto Program actually save you money?
Ultimately, the Costco Auto Program is a way for dealerships to generate sales leads. Dealers pay Costco when they make a sale from the program. That's not to say that you won't get a good deal, but this isn't entirely a member perk -- it's also designed to be an additional revenue stream for Costco.
The Costco member-only price list you'll get from a participating dealer is designed to be a no-haggle price list. Could you get the same vehicle price anyway by negotiating? Maybe, or maybe not. There's no way to know for sure if the pricing you get through the Costco Auto Program is actually less than you'd be able to negotiate on your own. That's just the nature of the used car business. But not having to go back and forth with negotiations to get a fair price can be a big perk to many people.
The kind of savings you might expect
Because of the general lack of pricing transparency in the used car business, there are few definitive real-world examples of how much people save. According to Yelp reviews, here are just a few examples of specific deals members have reported:
- $500 discount and some waived add-ons
- $800 discount on a new vehicle
- $500 off the advertised price on a pre-owned Honda
Having said that, by far the most common tone of customer reviews is that the value is in the no-haggle structure, not necessarily in the discounts themselves. And it's worth noting that the average rating based on 461 customer reviews is 4.2 out of 5 stars, which indicates that members are generally quite satisfied.
The bottom line is that the Costco Auto Program can be a good way to buy a car -- especially if you don't like haggling over prices. But because of its no-negotiation nature and the fact that not all dealers participate, it's not always likely to get you the best possible price. If you're a good negotiator, you might be able to get a better deal than you'll find on the Costco price sheet.
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FAQs
You'll receive hassle-free prearranged pricing on new and pre-owned vehicles. This means you can skip the negotiations and save money just for being a Costco member!
How much do you save buying a car through Costco? ›
Costco has claimed that the typical member saves about $1,000 through the program, although the actual savings can vary. In addition to the broad members-only pricing, the Costco Auto Program often has special incentives on certain vehicles.
What does Costco do with cars? ›
Costco Auto Program narrows the search for quality service centers that consistently deliver a good experience. Save up to $500 per visit on 30K/60K/90K maintenance, wheel alignment, brakes and more! Each service center is selected based on strict criteria, including a history of excellent customer service.
What is one advantage of buying a used car from a dealership? ›
You'll be able to get a vehicle history report in most cases, and possibly a warranty of some sort. Used car dealerships can also offer a wider variety of cars than a private seller, plus financing and other financial assistance options to help ensure a smooth transaction.
How much of a discount do Costco members get on cars? ›
On average, the retailer claims, customers can save about $1,000 off a vehicle purchase, though that will ultimately depend on the customer's car choice and the dealer. The program aims to be a simple way for Costco customers to find the vehicle they want at an attractive price.
What is Costco cost advantage? ›
(Parnell, 2014) Because of the economies of scale Costco has, they can offer lower costs on name brand items in bulk for its members. Membership is a strange way to start a retail relationship, although many stores have started strong membership benefits and online shopping options following Covid-19 in 2020.
Is it good to put a big down payment on a car? ›
Key takeaways. Down payments reduce the amount of money you must borrow and, thus, the interest you pay while repaying your car loan. Experts recommend a down payment of at least 20 percent. Larger down payments may prevent becoming upside-down on your loan.
How much do you have to spend at Costco to get $120 back? ›
| Paid Executive Membership 2% Reward |
|---|
| Monthly Purchases | Yearly Purchases | Approximate Annual Reward |
|---|
| $250 | $3,000 | $60 |
| $500 | $6,000 | $120 |
| $800 | $9,600 | $192 |
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What is the best online car buying site? ›
Best Used Car Websites of 2024
- Best for Cheap Cars: CarGurus.
- Best Advanced Search Functions: Autotrader.
- Best Basic Option: CarsDirect.
- Best for Classic Cars: Hemmings.
- Best for Mobile: Autolist.
- Best for Comparing Options: AutoTempest.
- Best Auction Site: Cars & Bids.
Like all of the major tire stores, new tire installation at Costco includes static balance (not dynamic or wheel spin balance). Costco does not perform alignments but the techs may inform you of the need based on wear patterns on the tires they remove.
Can someone else use your Costco cars? ›
Costco membership is non-transferrable.
What are the disadvantages of buying a used car from a dealership? ›
Disadvantages of Buying a Used Car
- A lot of unknowns.
- More wear and tear.
- Fewer customization options.
- Most don't come with warranties.
- Higher mileage.
- Possibility of being stuck with a lemon.
Following these five tips, you can protect yourself from being scammed by dealers or private sellers.
- Get A Car History Report. Getting a car history report is an important step to take before buying a used car. ...
- Have The Car Inspected By A Mechanic. ...
- Never Buy A Car Online. ...
- Beware Of Low Ball Pricing. ...
- Check For Liens.
Used cars are less expensive and slower to depreciate, but may require compromises and can come with higher maintenance costs. When deciding between new and used, it's important to consider budget, tech needs and maintenance costs.
What are Costco ownership advantages? ›
Costco is worth paying up for
The company's competitive advantages, such as its membership model, private label, and low pricing strategy, have led to a stable economic moat that investors can rely on regardless of market conditions.
What is included in the MSRP price? ›
A car's MSRP includes the base price for its particular trim level, as well as the prices of any options, packages, or extras it's equipped with. Features are typically itemized and listed out, noting whether they're included or additional cost.
What is the Costco Auto Program? ›
Costco offers its members discounts on new and pre-owned car purchases through an affiliate network of carmakers and dealerships. 1. The idea is to offer car buyers a haggle-free experience while also getting preferred pricing.
Who benefits from Costco? ›
It pays to be a Costco Executive Member: Executive Members earn an annual 2% Reward on qualifying purchases at Costco, Costco.com, and Costco Travel. Plus, additional benefits are available on our suite of Costco Services.
