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

[Bucky]

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.

 

[MOXJO7282]

"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.

 

[MOXJO7282]

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 so 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.

 

[Elan]

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 so 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]

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.

 

[rickandcindy23]

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.

 

[Bucky]

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.

 

[Elan]

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]

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?

 

[Bucky]

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!

 

[klpca]

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!

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.

 

[alwysonvac]

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.

 

[Elan]

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.

 

[T_R_Oglodyte]

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.

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.

 

[Bucky]

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!

 

[dsmrp]

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.

 

[Bucky]

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.

 

[MOXJO7282]

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.

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.

 

[davidvel]

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.

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.

 

[davidvel]

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.

"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.

 

[VacationForever]

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

 

[Bucky]

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.

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).

 

[MOXJO7282]

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.

 

[Bucky]

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

 

[Elan]

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.