# Costco Is Selling More Cars Than Ever Before By Offering One Key Perk (Cost)



## MULTIZ321 (Feb 21, 2018)

Costco Is Selling More Cars Than Ever Before By Offering One Key Perk (Cost)
By Kate Taylor/ News/ Stocks/ Markets Insider/ Business Insider/ businessinsider.com

C*ostco's auto program sold more than 520,000 cars in 2017. *

*The budget retailer grew car sales by 6% in a year when the industry's sales slumped. *
*Costco's biggest advantage over competitors is that it has fixed prices, meaning customers don't have to bargain when making their car purchase.*
Costco's car business is thriving thanks to a perk that sets it apart from the competition. 

On Tuesday, Costco announced that its auto program sold more than 520,000 vehicles in 2017. That's a 6% increase over 2016 sales figures, during a year when total sales dropped across the wider auto industry. 

Costco's auto business has quietly skyrocketed over the last decade.  In 2008, Costco sold roughly 200,000 cars a year — a figure that the retailer has more than doubled since then. 

Despite the growing business, Costco doesn't make any money on the auto sales.

The vehicles are sold through partnerships with auto dealers, meaning that, technically, Costco itself does not sell the cars. Instead, the retailer uses the program as a way to attract new members and maintain existing members' interest.

Costco has one major perk that traditional car dealerships lack: fixed prices. That means customers can skip the bargaining and upselling that is expected at traditional auto dealers...."





Reuters


Richard


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## MOXJO7282 (Feb 21, 2018)

I've purchased several cars through Costco. Another great perk is the 15% discount you get on services and accessories which brings dealer price down to 3rd party pricing so for us that is a big value as well.


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## Gaozhen (Feb 21, 2018)

Agreed - I bought my most recent vehicle through Costco at a local dealership, the price was well below what was advertised but was fixed, there was a gift card and discount for accessories, and a fairly substantial Costco cash card. It was a great experience.


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## jackio (Feb 21, 2018)

We leased a GM car, and the dealer asked if we were Costco members. When we replied that we were, she gave us a number to call, and we ended up getting a $700 Costco gift card.


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## Mosescan (Feb 21, 2018)

I got $1500 off my truck for being a Costco member.


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## VacationForever (Feb 22, 2018)

I went to Costco website to figure how it works and I am a little confused.  It does not show you the dealer's price.  Does it mean that you show up at the dealer and just tell them that you are a Costco member and they will give you the perks or whatever lower price?  It sounds like you need to trust that the dealer will give you a "good" price, or that Costco will issue a gift card.  The details are not spelt out on the Costco site.


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## Passepartout (Feb 22, 2018)

Mosescan said:


> I got $1500 off my truck for being a Costco member.


Off WHAT? Sticker price? Invoice? How do you know? I suppose that if the $1500 was off a price that you'd already negotiated with a dealer, and there was no 'smoke & mirrors' deal involving a trade-in it would be a verifiable good deal, but the above statement reminds me too much of timeshare salesweasels' pages of circles and boxes and arrows.

Jim


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## Mosescan (Feb 22, 2018)

maybe a little of column a and a little of column b! LOL! I was negotiating with the dealer. I got $1500 on a trade in, $3000 military discount and once we had settled on a price then I brought up the Costco membership and got the extra $1500 off as I new that was a standard offer from Ford Canada and Costco.


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## VacationForever (Feb 22, 2018)

Passepartout said:


> Off WHAT? Sticker price? Invoice? How do you know? I suppose that if the $1500 was off a price that you'd already negotiated with a dealer, and there was no 'smoke & mirrors' deal involving a trade-in it would be a verifiable good deal, but the above statement reminds me too much of timeshare salesweasels' pages of circles and boxes and arrows.
> 
> Jim


Precisely how I feel when I navigated through the Costco website.  I doubt it is any better than the typical "internet" pricing.


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## klpca (Feb 22, 2018)

We bought our last car through them and if nothing else the time saved by not haggling was worth it. In our case it was the starting point, then there were manufacturer rebates and zero% financing on top. We looked at 15 different cars before buying and we felt that the Costco price was very good.


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## Elan (Feb 22, 2018)

My experience with Costco is that if one has no desire or ability to negotiate, their prices are ok.  Otherwise, not at all competitive.


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## davidvel (Feb 23, 2018)

VacationForever said:


> I went to Costco website to figure how it works and I am a little confused.  It does not show you the dealer's price.  Does it mean that you show up at the dealer and just tell them that you are a Costco member and they will give you the perks or whatever lower price?  It sounds like you need to trust that the dealer will give you a "good" price, or that Costco will issue a gift card.  The details are not spelt out on the Costco site.


From Costco website:
*Locate & Contact*
Select a new vehicle and locate a participating dealer near you. Shortly after submitting your request, anAuthorized Dealer Contact will follow-up to schedule an appointment at the dealership. We will also provide you with the Authorized Contact’s information, should you prefer to connect with them at your convenience.

*Visit & Save*




Meet with the Authorized Dealer Contact and have them help you select a new vehicle. View the special Costco Member-Only Price Sheet which shows your exclusive prearranged price on the vehicle you selected.

An Authorized Dealer Contact will present the “Costco Member-Only Price Sheet,” displaying your prearranged pricing. The savings can be displayed in one of two ways: one version lists pricing for all models available at the participating dealership; the other will show a VIN-specific price based on the vehicle you select, including any applicable manufacturer incentives or rebates.
-----
I agree its a bit shady, and likely makes people NOT negotiate, when they probably could get a better price doing so (remember Saturn?)  Especially with this little puffary nugget:
*
It’s always a good idea to see the vehicle’s invoice and MSRP too so you can see how much you save as a Costco member!  *(Ok, I added the emojis)​
As if the MSRP and invoice tell you anything about what you are saving.


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## Bucky (Feb 23, 2018)

Elan said:


> My experience with Costco is that if one has no desire or ability to negotiate, their prices are ok.  Otherwise, not at all competitive.



Exactly. After several years in the auto business I can guarantee you that you can get a better deal if you are willing to do your homework in advance and know what to pay before even walking into a dealership. From a sales side of the deal we used to love having a Costco customer walk through the door. First of all we knew we weren’t going to get played for days and then have the customer go to another dealer just to save another $100. These buyers already knew what they were going to pay and for the most part ready to buy. Secondly, since salespeople are always paid by commission it frees them up to move on to the next customer quicker. From a dealers standpoint we knew we were going to make more from a Costco customer than we would from a well informed internet customer.


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## alwysonvac (Feb 23, 2018)

davidvel said:


> From Costco website:
> *Locate & Contact*
> Select a new vehicle and locate a participating dealer near you. Shortly after submitting your request, anAuthorized Dealer Contact will follow-up to schedule an appointment at the dealership. We will also provide you with the Authorized Contact’s information, should you prefer to connect with them at your convenience.
> 
> ...


It was our first time using Costco’s Auto Program last year. That’s how it worked for us. After completing the request online, we were contacted and the dealer provided the Costco Member-Only Price Sheet once we got to the showroom. It was quick and easy which is what we wanted.

Just to give you an idea, here’s the COSTCO prices from our local dealership back in November 2017. We were given a separate price sheet for each.

- *2017* Honda CRV *AWD* EX _ (This is the one hubby purchased)_
   MSRP $29,035 /  COSTCO price $26,815 (Savings $2,220)
- *2017* Honda CRV *2WD* EX
   MSRP $27,925 /  COSTCO price $25,778 (Savings $2,147)
- *2018* Honda Accord Sedan 1.5T *EX *
   MSRP $28,360 /  COSTCO price $26,320 (Savings $2,040)
- *2018* Honda Accord Sedan 1.5T *Touring*
   MSRP $34,690 /  COSTCO price $32,245 (Savings $2,445)
- *2017* Honda Accord Sedan 6cyl *Touring*
   MSRP $35,350 /  COSTCO price $29,845 (Savings $4,005 + Limited-Time Disc $1,500)


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## MOXJO7282 (Feb 23, 2018)

Bucky said:


> Exactly. After several years in the auto business I can guarantee you that you can get a better deal if you are willing to do your homework in advance and know what to pay before even walking into a dealership. From a sales side of the deal we used to love having a Costco customer walk through the door. First of all we knew we weren’t going to get played for days and then have the customer go to another dealer just to save another $100. These buyers already knew what they were going to pay and for the most part ready to buy. Secondly, since salespeople are always paid by commission it frees them up to move on to the next customer quicker. From a dealers standpoint we knew we were going to make more from a Costco customer than we would from a well informed internet customer.


Not to be argumentative but I disagree.  I've researched thoroughly whiled purchasing several new cars and in my experience Costco beats them easily.  It's was very easy to determine as well.  Get the Costco price and shop it. We did that to non-participating dealers and they couldn't touch the price.  I told them beat it and the deal is yours and not one of them could.  I'd like to hear from those that did what i did and got a dealer to beat Costco apples to apples.

Anyone?


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## Elan (Feb 23, 2018)

MOXJO7282 said:


> Not to be argumentative but I disagree.  I've researched thoroughly whiled purchasing several new cars and in my experience Costco beats them easily.  It's was very easy to determine as well.  Get the Costco price and shop it. We did that to non-participating dealers and they couldn't touch the price.  I told them beat it and the deal is yours and not one of them could.  I'd like to hear from those that did what i did and got a dealer to beat Costco apples to apples.
> 
> Anyone?



  I suspect it's dependent on where one lives, how competitive the overall local auto market is, and how many local dealers are participating in the Costco program.  Regardless, all we're going to get here is anecdotal accounts -- there won't be nearly enough data across multiple markets to derive anything conclusive.


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## MOXJO7282 (Feb 23, 2018)

Elan said:


> I suspect it's dependent on where one lives, how competitive the overall local auto market is, and how many local dealers are participating in the Costco program.  Regardless, all we're going to get here is anecdotal accounts -- there won't be nearly enough data across multiple markets to derive anything conclusive.


I don't know I live on Long island which is a huge car market and I negotiate very complex multi-million dollar technology deals for a living and as negotiations go cars are very easy to negotiate really so not sure why it would be any different anywhere.   I would be surprised to hear someone do what I did and they got a better deal than Costco gave them.   I guess my 3 Honda cars could be not the norm but I can tell you it was the case for me but I do get the sense it's true for all because Costco just knows what they're doing and has tremendous buying power, up there with Amazon, but not quite i'd say.


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## Elan (Feb 23, 2018)

MOXJO7282 said:


> I don't know I live on Long island which is a huge car market and I negotiate very complex multi-million dollar technology deals for a living and as negotiations go cars are very easy to negotiate really so not sure why it would be any different anywhere.   I would be surprised to hear someone do what I did and they got a better deal than Costco gave them.   I guess my 3 Honda cars could be not the norm but I can tell you it was the case for me but I do get the sense it's true for all because Costco just knows what they're doing and has tremendous buying power, up there with Amazon, but not quite i'd say.


You're making my point.  If you live in a huge car market, the dealers are inherently competitive because cross-shopping is a given.  You're likely going to get near the cross-shoppers price from the Costco service. Not so everywhere.  Where I live one can only cross shop domestics and even that's a stretch.  Generally speaking, you have to be willing to travel 400+ miles to get a really good deal on a new car.  If you want a good deal locally, you're likely in for a lengthy afternoon of negotiating.  

BTW, I don't think buying power has anything to do with Costco's car buying service. I could be wrong, but I'm pretty sure it's just a perk of membership.  Like cheap hot dogs. 

Sent from my Moto G (5S) Plus using Tapatalk


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## cgeidl (Feb 23, 2018)

C*ostco's auto program sold more than 520,000 cars in 2017. *

*The budget retailer grew car sales by 6% in a year when the industry's sales slumped. *
*Costco's biggest advantage over competitors is that it has fixed prices, meaning customers don't have to bargain when making their car purchase.*
Costco's car business is thriving thanks to a perk that sets it apart from the competition.

On Tuesday, Costco announced that its auto program sold more than 520,000 vehicles in 2017. That's a 6% increase over 2016 sales figures, during a year when total sales dropped across the wider auto industry.

Costco's auto business has quietly skyrocketed over the last decade.  In 2008, Costco sold roughly 200,000 cars a year — a figure that the retailer has more than doubled since then.

Despite the growing business, Costco doesn't make any money on the auto sales.

The vehicles are sold through partnerships with auto dealers, meaning that, technically, Costco itself does not sell the cars. Instead, the retailer uses the program as a way to attract new members and maintain existing members' interest.


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## cgeidl (Feb 23, 2018)

JUst think Last year I sold over half a million cars and didn't make a nickle. Even a measley $00 each woudl bring 5 million.


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## Elan (Feb 23, 2018)

Re: Comparing Long Island to Idaho.  Ford is pretty popular here because of their best-selling truck line.  Seems like every third vehicle is an F150 or F250.  In a 30 mile radius from my home, and I live in the largest city in the state, there are 3 Ford dealers.  If I expand to 60 mile radius, there are 6 Ford dealers, and two of those are tiny.  And then you're going quite a ways further to get to the next closest.  I don't think the dealers consciously collude, but none of them are seriously undercutting the others on price.

 Yeah, things are different out here.

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## T_R_Oglodyte (Feb 23, 2018)

I buy my cars like I buy timeshares - resale.  I let the original buyer of the car take the new buyer markup.  I'll take advantage of the 25% (or more) price drop that occurs as soon as that new car leaves the dealers lot.  I will also take advantage of the repair record that develops so I get a better idea of what cars are truly reliable.


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## davidvel (Feb 24, 2018)

alwysonvac said:


> It was our first time using Costco’s Auto Program last year. That’s how it worked for us. After completing the request online, we were contacted and the dealer provided the Costco Member-Only Price Sheet once we got to the showroom. It was quick and easy which is what we wanted.
> 
> Just to give you an idea, here’s the COSTCO prices from our local dealership back in November 2017. We were given a separate price sheet for each.
> 
> ...


"Savings" off MSRP. About 7%. If Costco doesn't get a kickback/advertising fee for driving people to those "deals", they aren't the savvy Costco we all know them to be.


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## dominidude (Feb 24, 2018)

MOXJO7282 said:


> I would be surprised to hear someone do what I did and they got a better deal than Costco gave them.


Though a lot easier said than done, this is what I did to buy a top of the line Honda Odyssey for $1500 less than the lowest price offered to me by a dealer in  Costco's program.
-I went to various websites and signed up for daily emails on what vehicles came in inventory to dealers.
-I found the invoice price of the vehicle I wanted, and was unwilling to pay over it (this is very difficult to do on very popular models)
-I set the mileage radius to 200 miles from my home, which meant  I'd get emails from any dealer within 200 miles of my home that had my desired vehicle
-whenever I'd get an email where the price seem close, I'd set up an appointment. I then had to drive to the dealer and on two occasions I had to walk out as the dealer would not come down to invoice, I had to drive about 100 miles in one of the two occasions.
-On the third try I found a dealer that had excess inventory that they wanted to get rid of right away, and i was able to buy $100 below invoice .
Tip: It helps to get a lower price if you tell the dealer that you'll get their financing. Just make sure that your own financing institution is ok with paying off the dealer's loan.
Tip: most credit unions have "TrueCar, Inc" service, which is similar to Costco's buying service, but I find that TrueCar  has way more dealers than Costco. I used TrueCar's website to find the car that I got through email at a lower price, then asked the price to be lowered further by offering to user dealer's financing.


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## dominidude (Feb 24, 2018)

MOXJO7282 said:


> I've purchased several cars through Costco. Another great perk is the 15% discount you get on services and accessories which brings dealer price down to 3rd party pricing so for us that is a big value as well.



"15% parts, service and accessories discount only applies to work done at the participating service center. It cannot be used toward the purchase of air bags, oil changes, tires, or state-mandated vehicle inspections or be combined with any other promotions or offers. "
https://www.costcoauto.com/enterzipcode.aspx

Why is this 15% discount valuable to you? I cant see why it'd be valuable to anyone.
I take my car to Pepboys, their price is lower and and their service warranty better than the dealer's and I get 15% discount off their lower price as well, including oil changes, etc.


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## Bucky (Feb 24, 2018)

MOXJO7282 said:


> Not to be argumentative but I disagree.  I've researched thoroughly whiled purchasing several new cars and in my experience Costco beats them easily.  It's was very easy to determine as well.  Get the Costco price and shop it. We did that to non-participating dealers and they couldn't touch the price.  I told them beat it and the deal is yours and not one of them could.  I'd like to hear from those that did what i did and got a dealer to beat Costco apples to apples.
> 
> Anyone?



Now you’re trying to compare apples to oranges, not other apples! Every model bought in every city, sold by every dealer can have a different price based on a multitude of reasons. I’m telling you from a dealers standpoint that we can always beat a Costco price. Whether we want to depends on a lot of variables at any given time.

Are we talking about a highly sought after model such as a Toyota Highlander or a basic Honda Accord? Are we talking about high volume dealers or the basic small town dealer. Are there any hidden dealer incentives (common) out there or not. Do I have to locate the vehicle or is it on my lot or coming in shortly. Am I dealing with a dealer that’s already achieved his monthly objective or one still struggling to make it. Am I shopping at the beginning or end of the month. Am I dealing directly with a sales manager or a salesperson via a manager.

These factors and many more play into the purchase of a vehicle and Costco doesn’t have privy to most of them. They have a contract with ea dealer stating how much the dealer will sell a particular model model for, regardless of any other factors. 

Just an example. The dealer has an agreement to sell an F150 through Costco for say 10% off MSRP which in our hypothetical case in invoice price. That’s all Costco will ever know. They don’t know any of the other factors that can come into play for a savvy shopper. Manufacturers will usually have some type of factory to dealer incentives based on volume sales during certain times of the year. Dealer A may have only sold 50 trucks this month meaning he hasn’t qualified for any factory incentives while dealer B may have already sold 200 trucks for the month and could be receiving $1-2K factory to dealer incentive for every truck sold! Foreign manufacturers are notorious for factory to dealer incentives. You think you are getting a great deal but trust me, the educated and informed buyer can easily get a better deal at anytime by just doing there homework in advance and be willing for that call. 

If you are at a dealer always deal face to face with a manager. A salesperson is good for test drives but when it’s time to negotiate do it with a manager. If the manager can’t sweeten the deal make sure you leave your number with them when you walk. Things change everyday in the auto business and what that dealer couldn’t or wouldn’t do today may very well change tomorrow.


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## MOXJO7282 (Feb 24, 2018)

dominidude said:


> "15% parts, service and accessories discount only applies to work done at the participating service center. It cannot be used toward the purchase of air bags, oil changes, tires, or state-mandated vehicle inspections or be combined with any other promotions or offers. "
> https://www.costcoauto.com/enterzipcode.aspx
> 
> Why is this 15% discount valuable to you? I cant see why it'd be valuable to anyone.
> I take my car to Pepboys, their price is lower and and their service warranty better than the dealer's and I get 15% discount off their lower price as well, including oil changes, etc.


I prefer my work to be done at the dealer's service center as I know by me it's much better service and the 15% brings the dealer price comparative to the Pep Boys who i would never let work on a new car.  I also bought a lot of accessories like all weather floor mats and the Nav Card through the dealer's web and they were cheaper than Amazon by 5% so that saved me there.


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## MOXJO7282 (Feb 24, 2018)

Bucky said:


> Now you’re trying to compare apples to oranges, not other apples! Every model bought in every city, sold by every dealer can have a different price based on a multitude of reasons. I’m telling you from a dealers standpoint that we can always beat a Costco price. Whether we want to depends on a lot of variables at any given time.


 I appreciate your experience. You say dealer can "always" beat Costco price? Then why don't they all the time and put Costco out of the auto business? Do you think most people don't know to do what I easily did and shop Costco's price? I'm sure most do that so why is Costco selling the most cars for the dealer?  I know in my case I was comparing apples to apples and Costco won hands down.   I'm still waiting for normal examples of people beating the Costco price.  I just haven't heard of it too much.

The example about driving 100s of miles is one,  that is a lot of work but I guess worth it to save $1500. My thoughts are that this person bought an excessive inventory stock car which may or may not be the color you wanted or with the features you wanted so I can see where you could save better than Costco but I do think if you're looking for a popular model with a color your really like and the features package you want Costco most likely would've beat the dealer by $1500.

So far only one person as detailed a case where they beat Costco and I'm not sure I would count that one IMHO s*o just looking for others who said they were able to beat Costco compared to the numerous ones that have got their best price deal from Costco.*


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## Elan (Feb 24, 2018)

MOXJO7282 said:


> I appreciate your experience. You say dealer can "always" beat Costco price? Then why don't they all the time and put Costco out of the auto business? Do you think most people don't know to do what I easily did and shop Costco's price? I'm sure most do that so why is Costco selling the most cars for the dealer?  I know in my case I was comparing apples to apples and Costco won hands down.   I'm still waiting for normal examples of people beating the Costco price.  I just haven't heard of it too much.
> 
> The example about driving 100s of miles is one,  that is a lot of work but I guess worth it to save $1500. My thoughts are that this person bought an excessive inventory stock car which may or may not be the color you wanted or with the features you wanted so I can see where you could save better than Costco but I do think if you're looking for a popular model with a color your really like and the features package you want Costco most likely would've beat the dealer by $1500.
> 
> So far only one person as detailed a case where they beat Costco and I'm not sure I would count that one IMHO s*o just looking for others who said they were able to beat Costco compared to the numerous ones that have got their best price deal from Costco.*


Not sure what the point is?  Your surely aware that any sample size gathered here, one way or another, is going to be insufficient to prove anything?  And your premise is not one that anyone is going to test out just for fun.  So what's really the point.  I believe YOU might have gotten your best deal using Costco's service.  But I also believe Bucky that his dealership routinely beat Costco pricing.  As I said earlier, every car market is different, sometimes vastly.  All it takes is one aggressive dealer to change a market.

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## MOXJO7282 (Feb 24, 2018)

No point,  just my curiosity really to know if in fact Costco is good everywhere and on all makes. Like for me it's been 3 top end Hondas, and I know personally for Volvo too as I went through the same exercise but didn't buy, so maybe it's not for all makes so that is why I ask the question has anyone truly beat the Costco price.

As for what Bucky said, first he does say "we" so I know he's a car dealer or salesman with valuable insight but he didn't say his dealership beats Costco all the time he said they could and seems to suggest sometimes they choose not to which I'm not sure why that would be.  Is it because there is a lot of suckers out there that don't ask for the Costco price or don't negotiate. Not sure why else they'd pass up a viable sale.

I don't sell cars or work for Costco I just know many people locally who when they shopped a car they wanted and Costco had a dealer in their area they got the best deal from Costco by a good amount in the form or discounts and nice Costco gift cards so I'm asking the question because i know of many locally and here on TUG who did what I did and found Costco was the best but none that say for this make and model a dealer did in fact beat the Costco price for them. That's all, no point just an  informational inquiry.


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## rickandcindy23 (Feb 24, 2018)

I need to use Costco for my car next time.  I am already getting a bit itchy for a new car.  I love my old one and should probably stick with it, but a new car will have all of those bells and whistles mine does not have, like backup camera, better radio, usb ports and audio jacks.  Yeah, my car is 15 years old.


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## Bucky (Feb 25, 2018)

MOXJO7282 said:


> As for what Bucky said, first he does say "we" so I know he's a car dealer or salesman with valuable insight but he didn't say his dealership beats Costco all the time he said they could and seems to suggest sometimes they choose not to which I'm not sure why that would be.  Is it because there is a lot of suckers out there that don't ask for the Costco price or don't negotiate. Not sure why else they'd pass up a viable sale.



I freely admit I was a dealer, now retired.

The reason we didn’t beat Costco all the time was because it was a business and market conditions had to be considered. Just common sense types of things. When the current generation of Toyota Highlander was released (2014), they were absolutely the hottest thing on the market. While we would honor a Costco customer we would usually have to order them one because as soon as they hit the lot there were people standing in line to pay full price, if not more. Some dealers even had addendum stickers on each one.

There are many many people out there that have no clue about Costco. There are many people out there that don’t do there due diligence ahead of time. What is a dealer suppose to do, just throw money at them when they walk in? There are not a lot of suckers out there but there are a surprisingly large number of people that think they know more than the dealer! Go figure.

People don’t like to negotiate. Why do you think people go to Carmax? We used to love having a customer come in from Carmax. If we had a similar vehicle on our used lot we could ALWAYS beat their price, ALWAYS.


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## Elan (Feb 25, 2018)

Fair enough.  I just think it's going to be highly variable whether Costco pricing is competitive or not.  It's been awhile since I tried it, but I'm pretty sure I was offered the dealers standard published "internet price" when I went thru Costco.  

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## davidvel (Feb 25, 2018)

MOXJO7282 said:


> I appreciate your experience. You say dealer can "always" beat Costco price? Then why don't they all the time and put Costco out of the auto business? *.*


Costco isn't *in* the auto business. They don't sell cars, and don't make any money off this referral program according to the article,  so they can't leave the auto business. 

I'm sure the deals are good for those who are averse to negotiation,  but no doubt are not the best prices you can get. Step back and think about how much dealers would lose from those no haagle buyers who just happen to have Costco membership. No way.

Did you know you could negotiate a Saturn price lower, despite their no haggle pricing policy?


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## Bucky (Mar 4, 2018)

Just had to revisit this thread to reiterate what I was trying to get across before. I’ve been trying to help my daughter get the best deal possible on a new Kia Sorrento.

If you go to just about any dealers page and check their inventory you will see they are offering about $6000 off of MSRP. This includes $3250 in factory rebate until 4/30/18 and the dealers discount of $2750. I don’t know what the Costco price would be but there is more room left in what the dealer could discount the price and still make a good profit.

Now here’s the kicker and I can pretty much guarantee you that Costco doesn’t take into account for it. There is what’s called a dealer choice rebate from Kia Motors Finance of $2500. This is money that can be passed along to the consumer but is not required to be! This is the American manufacturers equivalent of factory to dealer incentive I referenced before.

Those that blindly follow Costco’s buying program are just leaving money on the table. Some times a good chunk of it!


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## klpca (Mar 4, 2018)

Bucky said:


> Just had to revisit this thread to reiterate what I was trying to get across before. I’ve been trying to help my daughter get the best deal possible on a new Kia Sorrento.
> 
> If you go to just about any dealers page and check their inventory you will see they are offering about $6000 off of MSRP. This includes $3250 in factory rebate until 4/30/18 and the dealers discount of $2750. I don’t know what the Costco price would be but there is more room left in what the dealer could discount the price and still make a good profit.
> 
> ...


I'm not sure where our discounts figured in but when bought our Edge the "internet" price was invoice less $5000 or 0%financing. With Costco we got $500 under invoice, plus the $5k incentives, plus 0% financing. Maybe the dealer made money still...I hope so because no one should work for free.  We were happy with the price. Perhaps we were ripped off but it didn't feel like it.


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## alwysonvac (Mar 4, 2018)

Bucky said:


> Those that blindly follow Costco’s buying program are just leaving money on the table. Some times a good chunk of it!



I think most experienced Tuggers are savvy enough to do their homework and shop around.


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## Elan (Mar 5, 2018)

If those that buy through Costco feel they're getting some super exclusive low price that's all that matters.  Everyone should feel good about their car deal.  I just don't see what it is that would allow Costco's buying service to give buyers anything unique.  If anyone has a sound theory, I'm willing to listen.


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## T_R_Oglodyte (Mar 5, 2018)

Bucky said:


> Those that blindly follow Costco’s buying program are just leaving money on the table. Some times a good chunk of it!





alwysonvac said:


> I think most experienced Tuggers are savvy enough to do their homework and shop around.


I think that those who buy new cars instead of resale are leaving an even bigger chunk of money on the table.

Just like with a timeshare, the new car price has to include the sales and marketing program, not just the metal.  Once the car rolls off the lot, the only value it has is the metal.


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## Bucky (Mar 6, 2018)

T_R_Oglodyte said:


> Once the car rolls off the lot, the only value it has is the metal.



Too funny! They are worth a whole lot more than scrap metal prices and a whole lot less than before they rolled across the curb!


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## dsmrp (Mar 6, 2018)

We bought a car thru Costco program 2 years ago February, and while we didn't get the lowest possible price, we got an okay deal.
The manager gave us gratis  a tow-hitch add on that we wanted, cost $350 (thru a 3rd party vendor, which likely didn't cost dealer as much).
I tried to do my homework on narrowing what model and features I wanted, knew what trim packages contained what features.
Read all the car reviews and articles I could find on the internet, and knew the price ranges for the model packages.
What I didn't do, was search my local area dealer internet sites for their asking prices, cause it just didn't dawn on me that they would post them on the web, duh!
We could have used the local internet prices to perhaps negotiate a better deal.
The Costco price was maybe $1000 less than the posted internet prices for similar models and trim.

Even with the "Costco" price, the manager was finagling ways to add to the final cost.
I wanted heated seats which was in the highest trim package along with several other features I didn't really want or need.
I finally decided against getting the more expensive package, settling for the mid-level one.
Well after we left the dealership, I found out that the car they sold us was the half year newer model 2016.5 (arriving off the boat),
and the half year model had the heated seat feature in the trim package we had bought!
The manager should have known it, and was just trying to get us to spend an extra $3K 

So at this time of year, be sure to research if the car manufacturer puts out a half year model, and know what features
the manufacturer has added on if any, to each trim package.


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## Bucky (Apr 6, 2018)

Wanted to revisit this again and give an update on my recent experience using this service.

My daughter is in the market for eith a new SUV or wagon type vehicle. They had narrowed it down to two vehicles. Either a Suburu Outback 3.6L Limited or a fully loaded Ford Explorer XLT. she owned a new Explorer when she got out of college many years ago so nostalgia was running rampant.

Went to Costco’s website and sent out pricing request to the Subaru and Ford Costco Dealers. Long story short. I almost cried from laughing so hard when I received their final pricing. I was told by the Subaru dealer that management was going to hold firm on their offer. Basically the Ford dealer implied the same. These were the numbers they quoted and the prices my daughter and I were able to negotiate, although she still hasn’t decided on a particular vehicle.

Subaru Outback 3.6L Limited MSRP $38740
Costco dealer offer was $36307 Firm
Another local Subaru dealer agreed to sell the exact same vehicle for $34000

Ford Explorer XLT FWD MSRP $44730
Costco dealer offer was $40533
Local Ford dealer offered the exact same vehicle for $39404

Like I’ve said, Costco is basically for those that cannot deal with the negotiating process. This ended up being a very expensive learning experience for me though. Decided while checking out vehicles for her to pursue a new Highlander Platinum for us.

Toyota Highlander Platinum FWD MSRP $46195
Local dealer price was $43000
Costco dealer price was $41250

Not the beat price for sure but vehicles in high demand will bring a higher price. They reeled me in hook , line and sinker. Just a fact of life.


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## MOXJO7282 (Apr 7, 2018)

Bucky said:


> Wanted to revisit this again and give an update on my recent experience using this service.
> 
> My daughter is in the market for eith a new SUV or wagon type vehicle. They had narrowed it down to two vehicles. Either a Suburu Outback 3.6L Limited or a fully loaded Ford Explorer XLT. she owned a new Explorer when she got out of college many years ago so nostalgia was running rampant.
> 
> ...



There is always the exception to the rule perhaps because in spite of what you think car negotiations is not rocket science and most have no problem doing so if they have the competition to create.  

You're an admitted former car dealer so I'll grant you may be the most savvy buyer but I believe its more an isolated case. Maybe the ones that beat Costco were desperate to sell a car that day and maybe it wasn't quite an apples to apples.  

Otherwise It's a fact that Costco is selling more cars than anyone and the vast majority of buyers I speak to who find the car they want through Costco buy there for a reason.

And not just because it's "for those that cannot deal with the negotiation process", it's because for the vast majority it's the best deal whether it is for you in your region or not.


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## davidvel (Apr 8, 2018)

MOXJO7282 said:


> There is always the exception to the rule perhaps because in spite of what you think car negotiations is not rocket science and most have no problem doing so if they have the competition to create.
> 
> You're an admitted former car dealer so I'll grant you may be the most savvy buyer but I believe its more an isolated case. Maybe the ones that beat Costco were desperate to sell a car that day and maybe it wasn't quite an apples to apples.
> 
> ...


Again, Costco doesn't sell cars nor receive fees from the sales of these vehicles. Just an Entertainment book type program to make its members feel like they are getting the best price without negotiating.


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## davidvel (Apr 8, 2018)

Bucky said:


> Wanted to revisit this again and give an update on my recent experience using this service.
> 
> My daughter is in the market for eith a new SUV or wagon type vehicle. They had narrowed it down to two vehicles. Either a Suburu Outback 3.6L Limited or a fully loaded Ford Explorer XLT. she owned a new Explorer when she got out of college many years ago so nostalgia was running rampant.
> 
> ...


"Tell" her to buy the Outback. Just got the same model and love it. It practically drives itself. That's not a bad price either.


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## VacationForever (Apr 8, 2018)

Yep.  We have the Outback 3.6L with Eyesight and all the good stuff on it.


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## Bucky (Apr 8, 2018)

MOXJO7282 said:


> There is always the exception to the rule perhaps because in spite of what you think car negotiations is not rocket science and most have no problem doing so if they have the competition to create.
> 
> You're an admitted former car dealer so I'll grant you may be the most savvy buyer but I believe its more an isolated case. Maybe the ones that beat Costco were desperate to sell a car that day and maybe it wasn't quite an apples to apples.
> 
> ...



It’s obviously your money so spend it blindly if you want. But, like what has repeatedly been stated and  is a fact, Costco doesn’t sell cars, period. All they basically do is provide a referral service. For those with blind trust of the Costco mantra and no stomach for the negotiation process,it’s an easy way to buy a vehicle. 

The price on the Outback is about as apples to apples as it gets. There aren’t many options available on these since they are basically contained n packages. The Outbacks my daughter got competing prices on had identical MSRP’s so that indicates dealer cost was the same on both vehicles. They were even the same color!

There is no isolation here at all. It’s just a fact that Costco sends the dealer referral with what they call a target percentage discount. The buyer typically doesn’t get to see these targets but in the case of the Explorer it was $1100 below invoice. Dealers don’t have to sell it for that but since that $1100 is just a. recommendation and not set in stone, dealers can charge what they like and people blindly drive away telling everyone how great a deal they got by buying through Costco!

In the case of the Outback it’s obvious that the higher dealer was not willing to give up any factory to dealer incentives and Costco doesn’t require them to. Again, so so of a deal for those thinking Costco gets them the best price. But, for the informed buyer they would know that most foreign manufacturers don’t have many factory to consumer rebates but do in fact usually have some type of factor to dealer incentives they will sometimes give up if prodded.

The price I got on the Highlander is a great price for sure but not the absolute best one may get as we get closer to the model year end. But, unlike most consumers I have no problem letting the dealer make a couple of dollars, as long as it’s not a couple thousand. Especially in this case since they pulled the doc fees and provided free transportation to my house (85 mi from dealer).


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## MOXJO7282 (Apr 8, 2018)

Whether they directly sell or facilitate makes no difference.  I don't take comments personally especially when they are inaccurate but your characterization of the car buyer is truly ridiculous because again buying a car is easy with all the options out there to check pricing. Negotiating is easy because of that and also because It's ingrained in our pysche to not blindly buy a car because of the history of the "car salesmen" having some questionable characters. 

So for you to suggest anyone buying from Costco Auto is buying blindly is just silly.  Sure definitely some lazy people that just go to one dealer but I believe that is the exception and not the norm. Most people have a ton of info to get a great benchmark without leaving their computer and if they have multiple dealers for the car they want they know how to have them compete for your business.


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## Bucky (Apr 8, 2018)

Like I said, it’s your money. If you choose to drink the koolaid, enjoy.


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## Elan (Apr 9, 2018)

The only viable reason (that I can think of) that the Costco dealer referral pricing might be lower is that there's one exclusive Costco dealer in a given geographical area.  Dealer gives up some margin in exchange for exclusive referrals.  But there's still no compelling reason that Dealer B can't match Dealer A's Costco pricing.  Dealer A isn't getting a kickback from Costco.  Now, whether Dealer B opts to match the Costco referral price is up to them, but there's no reason to think they won't meet or beat the Costco price if they want to move cars.  

I suspect that what mostly happens is someone sees a car with an MSRP of $35K and an advertised "sale" price of say $31.5K.  When Costco referral comes in at $30K, the buyer gets all excited because that's $1500 under the advertised price, which is the lowest price they've see, so they proceed with the purchase process thru the Costco dealer.  OK deal?  Probably.   Could they have done better if they'd taken that $30K number to other dealers?  Probably.

  Everyone's going to believe what they want.  I just haven't yet seen a reason as to why Costco referral pricing should be inherently lower when shopped elsewhere.


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## Chrispee (Apr 9, 2018)

As someone who previously worked at a car dealership I can attest that using any car buying service will get you the bottom line maybe 1 out of 100 times, and only if the dealership needs to offload a car to for inventory or volume incentive purposes.  When you go around shopping with a Costco price quote, dealers don't want to beat it because they will be setting precedent for other clients to do the same.  Once the word gets out that dealer's are amenable to beating the Costco price the dealerships are headed down a slippery slope.  

I still believe that buying via a car buying service can be of great value to the average car buyer.  Even though I used to work at a dealership, and I am involved in contract negotiation at work, I still find the car buying process to be challenging.  On my car Mazda purchase a couple of months ago, the financials included:

- Purchase price negotiation
- Trade-in price negotiation
- Loyalty interest rate or cash rebate incentive choice
- Calculation of value of different interest rates over different amortization periods
- Decision on pulling the positive equity of my trade-in out as cash, or applying it to my loan for the tax incentive
- Payout of my current car loan
- a total of 7 fees/taxes itemized separately in the quote
- a published factory to dealer incentive (that my dealer did inform me of)
- a factory incentive of $500 (that my dealer did not inform me of, and I had to find myself)

So you factor in all of the above while trying to filter out the meaningless information being thrown at you (invoice price, undercoating sales pitch, financing insurance etc.) and I think you'd be hard pressed to say that the average buyer is going to be as successful as the dealership employees who negotiate these deals daily.


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## Elan (Apr 9, 2018)

Chrispee said:


> As someone who previously worked at a car dealership I can attest that using any car buying service will get you the bottom line maybe 1 out of 100 times, and only if the dealership needs to offload a car to for inventory or volume incentive purposes.  When you go around shopping with a Costco price quote, dealers don't want to beat it because they will be setting precedent for other clients to do the same.  Once the word gets out that dealer's are amenable to beating the Costco price the dealerships are headed down a slippery slope.
> 
> I still believe that buying via a car buying service can be of great value to the average car buyer.  Even though I used to work at a dealership, and I am involved in contract negotiation at work, I still find the car buying process to be challenging.  On my car Mazda purchase a couple of months ago, the financials included:
> 
> ...



  I don't know that I agree with the slippery slope argument.  Just because you got a $XX price on a given vehicle doesn't mean anyone else would necessarily expect that.  Word of mouth only goes so far, AND, as you mentioned, there's so many other things that can factor into a deal (limited time incentives, sales targets, trade/no trade, financing, aftermarket accessories, extended warranties, etc) that a dealership could use to justify giving $XX deal to you and only a $XX + $1K deal to me.  If the dealership told me that you bought when there was an extra $1K factory incentive, I doubt I'd question that -- whether it was true or not.   

  I don't have any issue with using Costco's or anyone else's car buying service.  But I'd use it as a starting point, not a stopping point.


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## MOXJO7282 (Apr 10, 2018)

Elan said:


> The only viable reason (that I can think of) that the Costco dealer referral pricing might be lower is that there's one exclusive Costco dealer in a given geographical area.  Dealer gives up some margin in exchange for exclusive referrals.  But there's still no compelling reason that Dealer B can't match Dealer A's Costco pricing.  Dealer A isn't getting a kickback from Costco.  Now, whether Dealer B opts to match the Costco referral price is up to them, but there's no reason to think they won't meet or beat the Costco price if they want to move cars.
> 
> *I suspect that what mostly happens is someone sees a car with an MSRP of $35K and an advertised "sale" price of say $31.5K.  When Costco referral comes in at $30K, the buyer gets all excited because that's $1500 under the advertised price, which is the lowest price they've see, so they proceed with the purchase process thru the Costco dealer.  OK deal?  Probably.   Could they have done better if they'd taken that $30K number to other dealers?  Probably.*
> 
> Everyone's going to believe what they want.  I just haven't yet seen a reason as to why Costco referral pricing should be inherently lower when shopped elsewhere.


This is where I strongly disagree that *the buyer gets all excited *and doesn't take it to the next level and take it to another dealer.  You sell most car buyers short because I know I did take it to another dealer, actually a total of 4 Honda dealers in my area and none could compete even though I said I'm ready to make the purchase at x price?  And I believe most people do as I did and don't get confused by all the data points as someone else suggests.  Sure some do but I believe that is not the majority of car buyers today. It's just too easy.

Next you'll say *"well they choose not to sell it to me" *for what ever reason you'll present.  From what I've heard about car dealerships they just want to "move cars"  as long as they're profitable sales but you suggest they pick and choose to sell. Again I disagree with that point.


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## Bucky (Apr 11, 2018)

MOXJO7282 said:


> Next you'll say *"well they choose not to sell it to me" *for what ever reason you'll present.  From what I've heard about car dealerships they just want to "move cars"  as long as they're profitable sales but you suggest they pick and choose to sell. Again I disagree with that point.



Well, maybe we need to agree to disagree then because it’s a fact, not from my background but just from my recent first hand experience, that dealers can beat Costco’s referral pricing anytime they so choose. In my case the choose to, in yours they didn’t.

How a dealership applies it’s sales practices is totally at the hands of the dealer principle (owner). Some have flooring agreements with their captive finance companies that pays a portion of their flooring charges based on sales vol. Others are self funded for inventory and may apply different sales practices. To say all they want to do is move vehicles is just not true. They do want to move them for sure but, they also have to do it in a way that keeps them in business.

The individual owned dealership with usually only one location will not in most cases even try and compete with the mega dealer with several locations.

The reason my Toyota Costco dealer beat my local competition was because they are a mega dealer that sells and delivers all along the East Coast. Costco sales are handled by their group fleet manager which also has a different pricing structure than retail sales. They are 125 miles away and have choosen a different business model to get sales they would have never received elsewise.

The two Costco dealers that wouldn’t or couldn’t compete on the Explorer and Outback were handled by their internet sales dept. I could have pursued it up the food chain but choose not to since the non Costco dealers were straight forward and much better priced.

Again, those that think they are getting the best price possible from Costco, are not necessarily right. Some cases yes. Some cases no. But, I do know there are many people out there that automatically assume they are getting the best deal possible by buying through Costco’s buying service and in fact that can be a long way from the truth.


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## Fredflintstone (Jul 24, 2018)

I’m such a cheapskate. I buy em with low miles, 10 years old or better and the previous owner was retired.

My latest is a 2003 Chev Avalanche with 65000 original miles for 5100. 

Even with the Costco rebate, 20 k plus is too steep for me.  


Sent from my iPad using Tapatalk


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## Makai Guy (Jul 24, 2018)

Fredflintstone said:


> I’m such a cheapskate. I buy em with low miles, 10 years old or better and the previous owner was retired.


They have to be that old for you to be able to poke your feet through the floorboards.


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## Fredflintstone (Jul 24, 2018)

Love it!


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