Costco Auto Buying Program: Scam or Good Deal?


I’m paranoid about getting scammed.

It’s almost to the point where I don’t even want to answer the phone out of fear I’ll accidentally blurt out my social security number to someone claiming to work at my bank.

When it comes to car buying, my guard goes up like I’m a schizophrenic at a CIA interrogation. 

That’s why I was intrigued when I discovered an auto buying program at Costco. The company’s website claims Costco saves members a lot of hassle and an average of $1,000 off a typical transaction price. It works like this:

Members choose the make and model they’re interested in, then Costco refers them to a local dealer who shows the customer the vehicle’s invoice price, the MSRP, and the Costco no-haggle price.

A no-haggle price with built-in savings sounds pretty good on the surface, but still my paranoia wasn’t eased by browsing Costco’s website. Digging a little deeper online, I found a lawsuit filed in January by a New Jersey woman who says the program is deceptive.

Her main accusation, according the paperwork, is: 

The Costco auto program is misleading and deceptive because its “members only” price is exclusively defined in reference to the “invoice price” of authorized dealers. The Costco auto program does not control the underlying invoice price, and its participating dealers can and do manipulate that price in any number of ways.

A-ha! I knew there had to be something. Everyone knows dealers try to squeeze every ounce of cash they can out of people, so if there’s a price they’ll immediately accept, they must have a good amount of profit built in. Still, I trust Costco….

So I decided to put its auto buying program to the test.

While I was shopping to replace my wife’s car a few weeks back, we looked at getting a 2009 Honda CR-V EX AWD. It was black with a window sticker price of $25,635. We got pretty far into the negotiations before they broke down over the value of our trade-in. The purchase price we arrived at: $23,600.

With this in mind, I contacted the Costco Auto Program with no intent of buying, but to research this story. I wanted to see how close their offer was to the price I negotiated myself. I filled out the online form and waited 24 hours. They never called. So I called the “specially trained” Costco-approved salesman I was referred to and asked what my price would be.

He asked me to come in and see the car. I told him I’d seen it already and just wanted to know the Costco price. I eventually convinced him I wouldn’t come in unless I knew the price was acceptable. 

Then he told me: $23,900.

I admit, I was impressed. I came  to the conclusion that programs like Costco’s just might be worth it if you’re the kind of person who cowers at confrontation and despises negotiation. The deal, at least in this case, wasn’t too bad!

If you’re a negotiation pit bull, though, go after ‘em, and take every hundred you can get!

Would you consider, or have you used, something like Costco’s auto buying program?


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    1. This program is a scam. It is just different form of bait and switch. That car isn’t in the program anymore. They want you to buy on lot. The Costco Rep is just a guide.

      • Look people, this is as good at as it gets with car purchases. You can do what I did as a executive member. I got the quote on the new Toyota, thing was the dealer at that time was 90 miles away across two counties. No way was I driving 180 miles round trip. I went to the local Toyota dealer, built the same vehicle and started to negotiate. After not getting anywhere close to the Costco price, I finally offered 100. Less than the Costco price. Said take it or I’m gone. They asked about the price, told them that I’d purchase through Costco. They came back 100. Over the Costco quote. I took it, and saved a 180 mile trip. I plan on using this on my next purchase.

    2. I just purchased a new 2016 Ford Flex through the Costco program. I figured I saved about $1500 over what Kelly Blue Book said was a fair price to pay. The only drawback was I had to drive 50 miles to the nearest dealer involved in the program and since the car I opted for wasn’t on their lot I will have to go back in a few days to pick it up. When comparing prices you need to make certain you are comparing apples to apples. Vehicles come with so many different options and packages you may not be comparing identical purchases. This can be tricky so some folks who don’t believe they were offered a good deal may be a bit off in what they are actually comparing. I would recommend any Costco member to at least consider the Costco option. I didn’t ask for a quite over the phone so I can’t speak to that issue.

    3. I had a great experience with Costco auto program. We went into an local Mazda dealership (Walker’s in Renton WA), showed the salesperson my card, test drove the car we want, he displayed the Costco price sheet. It was $400 below invoice, plus took another $1500 discount due to their promotion.

      So the final price we paid was almost $2000 below invoice, they even detailed our car for free! Since we came with a 13 month old, he gave us a free rental car to get home and then he delivered our new car to our house an hour later with balloons!!!

      Of course I got lucky since our car’s Costco price is lower than other popular models, but I certainly enjoyed the purchasing process and I will recommend it to everyone.

    4. I just bought a 2017 Toyota Camry LE from Livermore Toyota Dealer thru Costco Auto Purchased Program last Labor Day (09/05/2016) where they offered a $2500 rebate for a new late modeled Camry (2016) and $2000 rebate for a new 2017 Camry “plus” Costco member discount and Labor Day discount. Bottom line, I was able to get the whole discount by exactly following the Costco Purchase Program instructions.
      By the way, thanks a lot to “MAGALE” AND “ANITA”…
      Should you have any question/s, just throw me a message at er31naldo and I’ll be happy to guide you.

    5. In 2005, I bought my new car through the Costco buyer program. It did not require an upgraded membership for Los Angeles area residents. The price I got was lower than my credit union broker could obtain. She was surprised my price was about $200 less than hers.

      I did a lot of research on the car I wanted this time. In filling out the application online, one of the choices through Costco included a special optional safety package which I was willing to pay for. Costco had already negotiated a price for that. My price was $500 below the invoice cost, $2657 below MSRP. The exact car I wanted was on the lot in Glendale, CA, and the Subaru had a special interest rate of 0% for 48 months. Although I was just planning to test drive the car, I bought it. I am entitled to complete the Costco survey to obtain a 50% off coupon for $200 off service and parts at the dealership. In addition, they have a 15% off deal for service and parts. The people at the dealership were very polite and didn’t pressure me at all. They showed me the invoice and showed me the price sheet without being sneaky at all.

      Over the years, I’ve told others to try the Costco program. Those who did later told me they loved it and would recommend it to others.

      • That is odd, I am also looking at Subaru, and the Costco price I was quoted from the antelope valley dealership was $500 ABOVE invoice, and $300 more than the quote for the same car from the santa monica dealer with their ‘we can do better than the Costco price’. The MSRP antelope valley lists for this car doesn’t match the msrp on the Subaru build your own webpage, OR the msrp listed on the Costco site (Costco matches Subaru build your own). And my original email with this dealership they told me the Costco price was $275 over invoice. So I am not sure if this is dealership shenanigans, the online sales guy is an idiot who thinks I can’t do math or research, or there is other equipment on this car that they didn’t tell me about. In any case, I am unimpressed.

    6. We are deeply disapointed in the Costco Auto Buying Program. In all honesty, is Usless, Wastefull of Time and SHAMEFULL THAT COSTCO DOES BUSINESS THIS WAY!!!

      – I will NEVER RECOMEND ANYONE TRY THE Costco Auto Buying Program.

      – The nearest Toyota (Costco Authorized) dealership to Deleware, Ohio is about 145 miles away in Cincinnati, Ohio…(Beechmont Toyota) “Save With Dave” (David Roth – Fleet Manager) WHAT A SAD JOKE!!!

      – When talking on phone with dealership, they refuse to provide to you a Costco price sheet. They only give to you what they represent as their factory invoice.

      – When you ask to find out/figure out the payment,…they insist that they are not allowed to do that over the phone. You have to drive the 145 miles to ask them face to face.

      – When you get there, they tell you that they will only sell the car to you for $100 less than their invoce…(NOT DEALER COST).

      So you end up spending half your day, driving nearly 300 miles and spending 30’smthing dollars in fuel…(for what,…$100 dollars?!??!!!)

      Oh yeah,…you get down there and they dont have the car in stock (Forgot to mention that to me before I drove all that way/WASTED MY TIME),…and that since they do not have the car in stock,…they dont have the actual invoice for the car. AND SINCE THEY DONT HAVE THE ACTUAL INVOCE,…then they cant show you the “Costco price sheet” for the car. WHAT A SCAM!!!

      Once they come up with the pricing (Your SPECIAL COSTCO Pricing),…its nearly $80 MORE per month than the deal we had arranged down in Columbus, Ohio!!!

      Stait Up – Point Blank,… The “Costco Auto Buying Program” is as sleezy, if not sleezier than its “Costco Authorized Dealers”.

      Completely Worthless WASTE OF TIME AND MONEY!!!!!!!!!!!!!!!!!!!!!!

    7. We are in the process of choosing a new Hyundai and I have been gathering current prices although we will not be actually making a deal for almost 4 months when our current lease expires. The local dealer sales rep asked if we were COSTCO members and showed me a current list of hard COSTCO discounts by model and year. We were eligible for flat $500 off on top of the laundry list of other running discounts.

    8. I found the car I liked at a local Kalamazoo, MI dealership and called the Costco auto program number and registered. I got a call from the Costco authorized dealer in Elkhart, Indiana some sixty miles away in another state! So much for their membership buyer program, it was absolutely worthless! I would have traveled to a neighboring city with a dealership, but not sixty miles. Their program is an insult to members who pay a premium to obtain their membership.

    9. Have gone through this program. Not found it worthy. You can get better price if you shop around. The really bad experience was at the end of the deals when I added accessories. They charged me over the price quoted by them and when I asked the dealership about the discount then he emailed me that they have alredy discounted the price and not included in the bill. They raised 30% over the bill and emailed back that this is the discount you get. At the end they charged me more then the price quoted even after giving the discount.

    10. I went to a Keith Pearson dealer in Orange park Florida and was dismayed by one of the sales manager tactics who wants to charge with more using the MSRP posted in the car($40,000 +) and not the actual price range showing in the COSTCO site. Even mentioned that the CEO of COSTCO is the one who negotiate the savings i’m supposed to get. I left and bought a car from another dealer.

    11. Costco Auto Program is a big waste of time.

      They have me going all over San Diego to visit dealerships that don’t honor the Costco Auto Program Pricing and dealerships that don’t have the cars they have listed on the Costco Website. I called into the Auto Program and the Reps were unhelpful and rude.

      I do not recommend the Costco Auto Program.

    12. I am bit skeptical of the Costco program. They work for the local dealers in your area, and don’t necessarily have your best interests in mind. I am an Auto Broker, I have been able to beat almost every Costco price that has been put in front of me. Good Auto Brokers focus on only the best price possible, not enough just enough to catch your interest.

    13. I couldn’t wait to purchase a car through the Costco Auto Program. Unfortunately the only Kia Dealership that participated in their program (near my location) turned out to be a dishonest and deceptive.. Purchasing a vehicle from YONKERS KIA has been one of the worst experiences ever. They’re buying incentives were fraudulent and misleading.
      Typical bait and switch practices. Costco should be more careful of who their participating car dealers are. Make sure you read all dealer reviews before using the Costco auto program.

    14. We tried the Costco car buying system but the dealer was cagey on the actual invoice amount and also tried to leave out a factory $500 cash back offer. In the end, we had to resort to old fashioned car price negotiations just like always. For our next car we’ll check TrueCar and Kelley Blue Book for a good price and negotiate for ourselves.

    15. @ Costco Auto Program
      Hi, @costcoautoprogram!
      I just had a dealer referred to me by costco tell me the car I wanted isn’t part of the program. What? It was on the Costco list online… What to do?

    16. Hello, we filled out the online Costco deal and was contacted by the San Tan Hyundai dealership in Chandler, AZ. We were looking for a certified used car. We were there 5 hours. we told them the amount we could spend monthly and they kept trying to put us in a lease for a new car and never mentioning the Costco deal. finally we pursued a used car and got a pretty good offer for a used 2013 sonata. The paperwork was done and I was asking what about Costco deal? Sales person said oh well this is a better offer. She stated it would be $500 under a published price (which none was published for this car). After comparing to other dealerships, the cost we paid is close to what other dealerships would charge, but I went away from that experience wondering about the Costco deal.

    17. I tried using the costco buying program at their recommended Toyota dealer in Puerto Rico. I worked backwards i got their quote and final price then i went to different toyota dealers. I negotiated a better deal at two out of three toyota dealers in the area and i went back to the costco preferred dealer and they declined to lower the price. The tag and title was $250 more than other dealers and the extra add ons i wanted were $500 over. Don’t fall for this scam .

    18. I upgraded my Costco membership to executive to get the car buying option. I had been working with a dealership but I wanted to best deal. I had a quote from San Tan Honda.. Costco sent me to Superstition Honda. The amount from Superstition Honda was higher. Showed me the invoice and the Costco agreement but what they aren’t telling you is that everything is a add on. I showed the quote from San Tan Honda and Superstition Honda matched with accessories but they were not happy. I bought the car from Superstition Honda as they had what I wanted in stock but wish I had dealt with San Tan as they were honest and w/o their quote I wouldn’t have gotten the best deal. Costco called to survey me on how the car buying experience went. Costco rep said they were sending me a coupon % off to use to buy accessories but that has never materialized. I upgraded my membership, paid Costco the difference to use the car buying but would recommend anyone looking to buy a car to compare dealerships or check online to know the cost from other dealerships so not to get taken. Costco isn’t always the best deal.

    19. @ John W

      Forgot to mention we still did NOT buy the vehicle from Elgin Toyota. We felt that since they were snaky about the Costco program and tried the old dealer trick of tying you up for hours to break down your conviction, we couldn’t trust them and they didn’t deserve our business. Same with Grossinger Toyota and Arlington Toyota in the Chicago area. We DID buy from Naperville Toyota, they were far from home but very good to deal with. We felt respected in the transaction and that our business was appreciated. We still do to this day.

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