The Costco Auto Buying Program
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.
3 Steps Every Car Buyer Needs to Take to Save Maximum MoneyThe key to getting the best deal is to gather price or lease bids from as many local dealers as possible. Then shop that best price around until no one can beat it. Here are the steps:
Step 1 Get Prices From My Trusted NetworkSelect the vehicle you're interested in to see if there are local dealers in my network who will provide you with their best upfront price. You will get direct access to an internet sales manager who you can further negotiate with online (no need to visit dealership).
Step 2 Get Prices From TrueCar / CarsDirectTrueCar, and CarsDirect are my top 2 online price quote recommendations. These services show you pre-negotiated prices from dealers closest to you - and the deals are usually pretty decent. But remember, you can still negotiate further.
Step 3 Complete my ChecklistFollow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid