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The Costco Auto Buying Program

If you've ever shopped at Costco, you know they offer great deals on a wide variety of products.

You may have also noticed they offer a car buying service called the Costco Auto Program and are wondering if this is a good way to purchase a car.

The way the program works is that Costco has arranged pre-negotiated prices for their members through a network of car dealers. These pre-negotiated prices are based off the invoice - usually $500 above invoice price.

This is basically a marketing agreement between Costco and the dealerships. The dealerships pay Costco a fee of between $300 and $500 for each car that is purchased through the program.

This is where some people feel the Auto Buying program is a bit misleading. Most consumers don't realize how it works and assume Costco is the one selling the vehicles. Keep in mind you still have to purchase the car at a dealership, and could be subject to unethical sales techniques.

For example, you may get a good price on the car, but the dealer could charge a high doc fee and try to sell you add-ons you don't need. You have to keep your guard up at all times. Since dealers pay a fee of several hundred dollars to Costco to be part of the program, you will most likely get a better deal if you shop on your own and use my car buying method.

If however, you're the type of person who hates negotiating and are willing to settle for a fair deal, then the Costco Auto Buying program is a decent way to go.

A couple of alternatives are TrueCar.com - which offers a similar program, and CarWoo - which offers a pure negotiation service with no hidden fees.

My Recommendation for Car Shoppers

TrueCar No-Haggle and Edmunds Price Promise are the quickest way to see the lowest car prices in your area. These sites show you no-haggle prices from dealers closest to you - and the deals are usually really good. This should be the first step you take when negotiating your car price. Follow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan

Gregg Fidan

About: Gregg Fidan


Gregg Fidan + is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.

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