Costco Auto Buying Program: Scam or Good Deal?

costcoauto

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?

-tgriffith

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  1. Me1
    February 11th, 2010 at 19:02 | #1

    Forst off the negotiation time of a car deal is on us ..the customer.. walk in and pay msrp and see how fast things go… it is not a dealers fault that a given salesman is not able to show you/me/us how the benifits out-wiegh the cost. A dealer is allowed to make money if they did not we would have no place to buy cars. Also the average salesman is not making what you might think.

    As for the COSTCO program it does work and it does save time. Many vehicles are offered under invoice.

    So keep in mind it is the customer that makes much of the process time intensive… walk in and work the payment… if your paying cash say I want to see the invoice. (there is only one) Pay $500 over and move on…

  2. Filip
    February 1st, 2010 at 10:46 | #2

    Hi Zoey, If you are cowering, do as much haggling as you can over the internet/email.
    Ask the sales person to share the dealer invoice with you (this is not the same as the MSRP invoice) the dealer invoice is how much the dealer pays for the car. These numbers you can find on edmunds.com

    Now, a car that you think is $22k on edmunds, can be $27k if it has $5k of options. So make sure the invoice he sends you, contains all the options. And then you go to edmunds.com and make sure you’re getting a fair deal

    best
    Filip

  3. Zoey
    January 31st, 2010 at 17:59 | #3

    My husband and I would like to buy a Subaru Outback or Legacy in Pittsburgh, PA through the costco auto program. Has anyone had similar experience that you would like to share with us?

    Alternatively, what is the possible OTD price we would expect to pay for a 2010 Subaru Outback 2.5i CVT, or a Legacy 2.5i CVT? According to Edmunds, the invoice prices for Outback and Legacy are ~$22,000 and $20,000, respectively. But the dealers we have emailed asked for more than $27,000 or $25,000 for these models. We are both of the cowering type, so what’s the best thing to do? Any suggestions? Thank you!

  4. Filip
    January 28th, 2010 at 17:09 | #4

    Ok, so after having a very pleasant and successful Toyota purchase, where pricing was fixed I got curious, how does this work with a Lexus.

    I contacted the dealership, for a RX450h, a popular hybrid model, the fixed pricing is gone. Dealership told me that I’d get a $2500 discount off of MSRP, which brings me around $4800 over dealer invoice.

    I guess the costco auto buying program is not for all brands.

  5. tgriffith
    January 25th, 2010 at 19:14 | #5

    @Nomie
    Hi Nomie-
    This is one of those cases where the salesman is probably telling you the truth. Camaro is a hot seller and Chevy hasn’t offered incentives on them. If you want one right now, there probably isn’t a ton of negotiating room. You could consider yourself lucky that the dealer isn’t tacking on extra, actually. You could try getting the Costco price and haggling on the price you feel comfortable paying, but if you wait a year or so, I predict more Camaros will be available and more discounts offered. You could also wait and look for a pre-owned model. Searching for 2010 Camaro listings here is a good place to start:
    http://www.cargurus.com/Cars/l-Used-Chevrolet-Camaro-d606

    Let us know what you end up doing!

  6. Filip
    January 25th, 2010 at 18:54 | #6

    hi Nomie, we all know the financial state of GM these days, so the sales person is definitely trying to take advantage of you.
    If you were referred to this dealership through the Costco auto program, the dealer is supposed to show you the invoice and let you know exactly how much extra he is adding on to it. All in all, it should be a fixed price. You can then decide if you want that fixed price at no haggle, or you can use it to leverage a better deal somewhere else.
    However, if you don’t know what the invoice price is, it’s hard for you to haggle as the only reference points you have are the dealerships. Edmunds.com does list invoice pricing for cars, you just have to be able to interpret the price list.

    If you are a person that likes to haggle and enjoy it, then by all means. The best time to get a good deal is the last 3 days of each month. However, haggling can yield some good results, you can get to take off all kinsd of crap charges.

    If you are a first time buyer, then I would recommend
    http://www.carbuyingtips.com/

    Spend some serious time reading that material, and you will get a better understanding into the car buying world.

    best
    Filip

  7. Nomie
    January 25th, 2010 at 16:28 | #7

    I’m looking to buy a 2010 Camaro LT1. I test drove 2 models this weekend at a Chevy dealership and liked what I drove. There were only those two cars available in the entire lot. The salesman would not budge on pricing, stating that the demand for these cars is too high and the supply is low. He said there are zero incentives or “certificates” (discounts) for this car. So for all you savvy auto market connoisseurs out there, is this really the case? Is the Camaro really that sought after? I thought Chevy wasn’t doing to good financially, so they would be a bit more generous in order to make sales.
    Has anyone tried buying or bought a Camaro recently? How did the purchase go? Has anyone use the Costco car buying program for this car?

    Any advice would be much appreciated. This would be my first “new car” purchase and I don’t want to be taken advantage of!

  8. TJ
    January 16th, 2010 at 13:58 | #8

    My brother bought a car with the Costco Auto program and I just bought one through the Sam’s auto discount. Here’s how you have to play it – always email the dealership first, they will furnish an email for the point of contacts. Use both the Sam’s and Costco auto program websites to find dealers, the dealerships seem to usually be exclusively with one or the other. They will email you their offers if you’re up front with them if you tell them you’ve looked at the car and it’s down to numbers. See which one is the best, try to squeeze a few extra hundred out of them over email or in person then take that offer to your closest dealership.

    My brother did that and he got a new Honda Accord LX for 18100. I did it and got a MB E350 with premium one for 48750. I’m sure I could’ve gotten a few extra dollars off if I drove all over Texas to all these dealerships to haggle one on one, but I did 90% of my work from my computer and only had to go to 1 dealership to get my car (my brother had to go to two because Honda and Toyota dealerships are the most vile creatures on earth and will do anything to suck a few extra pennies out of you).

  9. Filip
    January 3rd, 2010 at 22:31 | #9

    Sam, sorry you had a bad experience. Costco Auto buying program is purely a referal service, nothing else. However, as part of the referral you can ask to see the invoice, and if the dealer doesn’t show it, walk out and file a claim with Costco.
    The dealer will lose his lead generation.

    I agree with Sam though, if you don’t get to see the invoice, walk out.

  10. Sam
    January 3rd, 2010 at 18:30 | #10

    Costco claims they have negotiated “pre arranged prices” on behalf of their customers. This is a pure lie! When I wanted to buy a Honda Accord EXL 3 weeks ago, that is during December 2009, the dealer just refused to show us anything in writing that would resemble a price list. Their excuse was that they had better prices and discounts to offer… When we called Costco asking them to email us THEIR COPY of this so called “pre arranged price”, they came up with many different excuses in order to avoid honoring their deceitful publicity of “pre arranged price”. A pre arranged price should firstly exist and secondly protect the customer from becoming victim of all kinds of prejudices based on race, age, linguistic abilities, negotiation skills, etc. Costco guys are in fact as abusive and deceitful as their car dealer counterparts when it comes to honoring the existence of “pre arranged prices” they claim they have negotiated on behalf of their customers. Such pre arranged prices DO NOT EXIST! I challenge anybody to obtain a pre arranged price from Costco that could possibly be matched to the price their deceitful counterparts would or would not produce, depending on the customer’s look… In fact, I invite those of us frustrated customers who have time and resources to sue Costco for deceitful publicity to please do this service to the community. Costco can and should be sued for deceitful publicity on the grounds of the fact that they are not in possession of such thing as “pre arranged prices”. Pre arranged would mean prices previously arranged between two parties. Such previously arranged price, for any given model, can only exist if it has been written somewhere and can be communicated to the customers, or to the court of justice for that matter. Good luck obtaining “the pre arranged price” from Costco! In the meantime, I invite the readers of this text to feel free copy and paste it in any consumer protection or Review Website.

  11. Mark
    December 25th, 2009 at 21:53 | #11

    beware you will find big price differences for costco at different dealers. sweetheart agreements between the brothers at the dealer and the costco auto program.

  12. Luke
    December 25th, 2009 at 13:30 | #12

    Here is my 2 cents about the going through the costco program, as well as what i’ve found works even better than face to face negotiation. This of-course will take you to a point and then its up to you to get the price even lower if you want to.

    First off i’ve been in sales before (not car sales) and i can say for certain the “invoice” price they show us is made up, the dealer probably has a couple of variations depending on how they size you up (i too have done this) The dealers are out to make the most profit for themselves and they do that by various ways which have been posted here.

    Anyways here is my experience with the costco auto buying program.. I’m in the market for a 2010 Honda pilot i went through to the local dealers and they gave me a price of $33,735 the sales person swore up and down that this is the best they can do, showed me the doctored up invoice price.

    Came home, went to cars.com and clicked buy and emailed 6 local dealers and told them that. I’ve test drove the pilot, i like it and i’m going to buy one in the next 72 hours I have excellent credit, i’ve been already pre-approved for a loan with a local bank, but their interest rate may interest me. and i told them the exact car i was looking for and all i wanted is their best price they can sell this car, because thats going to determine if this was going to work (after all i wasn’t buying a taylor made suit where i needed the extra care, attention, the service; service comes later, now is the time for me not to flush money down the toilet)

    Here are the responses to my request. Same car same everything.

    Dealer A 33,735 (costco auto buying program)
    Dealer B 33,135
    Dealer C 33,600
    Dealer D 33,135
    Dealer E 31,926
    Dealer F 33,636

    This includes destination fee. no tax, lic, doc fee A few dealers stated “bring my your best offer and we’ll beat it”

    In conclusion, its business its not personal.

  13. December 21st, 2009 at 13:26 | #13

    Blog author, you can remove my previous comments, here is the final one with all the correct answers.

    Ok, since it turns out that I am 10 times more paranoid about getting scammed than the author of this great blog, I’ve done some extensive research.
    The disclaimer, this applies only to Toyota, turns out other manufacturers do things slightly different.

    Since I’m buying a Tundra, I worked with the Tundra solutions forums, where many people have posted both helpful and not so helpful information.

    http://www.tundrasolutions.com/forums/pricing-and-dealers/180018-holdback-tda-wholesale-financial-reserve-clarification/

    Towards the bottom of the post, I clarify some of these charges.

    best
    Filip

    Line items:
    Destination charge: $950
    TDA: $726
    Dealer holdback: $656
    Wholesale Financial Reserve: $328

    Let’s clarify them once and for all:

    1. Destination charge: $950
    everyone must pay for this. Even if you are a neighbor to the factory. It’s a federal law that everyone pays the same on the same kind model during the same time period (this cost has gone up since 2007)

    2. TDA – Toyota Dealer Advertising: $726
    This is a true dealer cost, the dealer pays this to Toyota for advertisement and is NOT refunded the fee when the vehicle is sold

    3. Dealer holdback: $656
    When the dealer buys the vehicle from Toyota, the dealer DOES pay the line item on the invoice he shows you. When the dealer sells the vehicle he gets refunded this fee

    4. Wholesale financial reserve: $328
    When the dealer buys the vehicle from Toyota, the dealer DOES pay the line item on the invoice he shows you. When the dealer sells the vehicle he gets refunded this fee

    So if you pay these fees, you’re simply ensuring that the dealer makes $328+$656 on the vehicle. Guaranteed. Nothing wrong with this.

    So why all the confusion, and sites like carbuyingtips.com saying never pay these fees? The confusion is cause all car manufacturers do it slightly differently. Also website do it differently too, if you go to edmunds.com, they usually include these fees in the base price of the vehicle, while when you look at the Toyota invoice, its split out as separate line items.

  14. Filip
    December 18th, 2009 at 18:13 | #14

    John Poe, posting again here. I’m getting conflicted information on the holdback here. Toyota seems to operate differently. Toyota MFG collects the holdback from the consumer and doesn’t cut a check to the dealership for that same amount.

    A neighbor explained to me that Toyota simple collects all the charges
    – Dealer holdback
    – TDA
    – Wholesale Financial Reserve
    directly from the consumer.
    Toyota then run incentive programs (cashback, apr, etc( from the money they make on these charges.
    Printing an invoice from a toyota dealership will always have these charges on there.

    If you buy another brand, then the process works differently.

    That is how I was explained the process worked. I would appreciate a post that would explain if I am just being bullshitted or if Toyota actually runs their system like this.

    best
    Filip

  15. Filip
    December 18th, 2009 at 17:47 | #15

    John Poe, thanks for the clarification on the dealer holdback.

  16. Stephanie Rodd
    November 28th, 2009 at 09:46 | #16

    I love everything about Costco but have yet to try their auto buying service. In April ’09 I purchased a 2009 Honda Odyssey EXL for an incredible deal. My best advice is check out Edmunds.com’s page for current dealer incentives and rebates that are being offered in your zip code and also Edmunds true market value application on their website. And the very best advice I can offer is only deal with the internet side of the car dealership. The salesmen seem to understand that people who use this route to buy a car don’t want to waste time and have done their research. I’m a 40 year old woman who went to a dealership alone and walked out two hours later with 2.9% financing, got the price I wanted and even a few extra’s thrown in. Do the research, be in control of the transaction and you’ll get your deal.

    http://www.edmunds.com/incentives/RebateController?step=1&tid=edmunds.n.incentivesindex.incentives.2.1.*&setzip=30024

  17. John Poe
    November 25th, 2009 at 14:03 | #17

    Re: The 2010 Tundra Crewmax deal described above. Having purchased over 60 vehicles and dealt with dealers and fleet sales managers the Toyota dealer is putting the “screws to you”. If he’s putting the “Dealer Holdback” as an expense on the invoice, you are paying twice! This is the money that Toyota pays the dealer for selling a vehicle in a timely manner (it generally reduces in size as the vehicle remains on the lot and paid quarterly to the dealer). So it’s profit from the mfg., not due from the customer. Same with the “marketing charge” and “financial wholesale reserve” (whatever that is). This is overhead expenses to the dealer and not charges on a dealer’s invoice and due from a customer. Only the “destination charge” is normally found on an invoice. So all the rest is additional profit on top of the Costco profit listed. You can go to several sites and get “true” invoice prices for the vehicle and compare with the trumped-up charges your dealer has added.

    p.s. Dealers are also paid for “dealer prep” from the mfg. and shouldn’t have to be paid again by the purchaser. I’ve purchase many vehicles under invoice and up to $100 over invoice from dealers and their fleet managers.

  18. Nan
    November 23rd, 2009 at 22:41 | #18

    My husband and I have used the Costco program several times and love it. While I love a good haggle, I’m tired of the hours it takes to achieve the final price. We’ve found that the program isn’t the same from state to state. We lived in CA and used the Costco program three times there, we were always happy with the price and the dealer did show us the invoice. In Colorado the dealer said his advertised price was better than the Costco price. This didn’t quite sit well with us and we did not buy the car. Like anything, one shouldn’t go into any negotiation blind. Do your homework, find out what the car of your dreams it worth with and w/o options. Then you’ll be ready to sally forth and slay the car dealer. ;-)

  19. tgriffith
    November 23rd, 2009 at 16:47 | #19

    @ASB
    ASB-
    Did you get the 2010 4Runner last weekend? I’m sure you could get a great deal on a 2009 model, and would be surprised if the 2010 model truly is demanding full MSRP. It is, afterall, still a body-on-frame SUV and those aren’t exactly flying off dealer lots. Haggle if you can, but if the dealer(s) won’t budge, I’d wait a few months before forking over full price and seeing what happens with that “trickling” inventory story. It’s at least worth seeing though what the Costco price is, then visiting other dealers and asking if they can beat it. Let us know how it turns out!

  20. Mike
    November 20th, 2009 at 12:24 | #20

    If doing it yourself is not for you, there will soon be a service that does it for you, for a flat fee of $150.

    Here’s how it will work.
    http://carandbuyer.biz/DisplayPage.aspx?pgID=MjQ=&paID=NA==

  21. ASB
    November 19th, 2009 at 23:46 | #21

    I want to purchase a 2010 4Runner Limited this coming weekend. I can use UBS through my credit union or Costco. When I test drove the vehicle during the week, the salesperson from the dealership I visited told me that there will be no negotiating on these vehicles; they are going for MSRP. Apparently they are “trickling” in from Japan to the US slowly.

    I’ve spent the last few weeks ‘shopping’ over the internet, and have requested internet prices through places like edmunds.com, but most dealerships won’t send me prices through email, and instead ask me to come in. I made a request through Costco and got a reply from a dealership. Do you think it would be worthwhile to call the local dealerships and ask them for their best price (doing my shopping by phone), and comparing the price to the Costco discounted price (which I do not know at this time)?

    Fortunately (or unfortunately) we do not have a trade-in.

    Does my approach sound reasonable? Do you think I’ll be able to get any discount at all on the 2010 4Runner?

    Thanks in advance to any suggestions you may have. =)

  22. Brendan
    November 18th, 2009 at 20:19 | #22

    This is some great information. Thank you all. I was hesitant but this helped ease my stress. I know not everyone had the best experience but I am no haggler and I think this program is a good starting point for me. I am car shopping this weekend and am starting the Costco process through their site. With an 8 and a half month pregnant wife we can’t afford to waste time haggling over a bigger car from lot to lot although the last time we bought a car she was also 8 months pregnant and it helped in lowering the price. Maybe this time we can use both to our benefit.

    One thing i would like to see at the starting point is a list of dealers in my area (San Francisco) that use the program instead of having to input the car I want and getting one dealership in return that is 60 miles away but when I input a different car (same make) I get a different dealership. I want to see them all.

    We are also considering the Certified used ones too.

    Thanks everyone!

  23. Filip
    November 10th, 2009 at 12:37 | #23

    The Costco auto program does work, and it works very well. If you’ve had bad experience, why just complain about it, you have a company to take your complaints to. And rest assured, the shady dealer that didn’t comply will most likely not be able to participate again.

    We had a fantastic experience. I was looking for a 2010 Tundra Crewmax. The dealer that we got referred to made the experience so easy. Here is how it worked
    1. the pricing is easy, $399 added to invoice price.
    2. Pick any car you want, he’ll show the invoice

    Now, in our case, the whole purchase was done in less than 30min. And we did NOT buy a car from the lot. We custom ordered one. The cars they had on the lot, had too many options, that we didn’t want to pay for.

    So, why spend hours haggling over a car that has been test driven and may not be the exact car you want.

    When someone says, they will sell you a car $2k below invoice, they are full of it. A dealer can’t afford a $2k loss, period. You must understand how the pricing works.

    For example, on a Tundra invoice, there are a few things added
    1. Destination charge – charged by Toyota $900
    2. Dealer hold back, roughly $600 – this is the dealer profit
    3. Toyota marketing charge – $900
    4. Financial whole sale reserve $300
    5. Costco Auto program charge $399 (sales person commission)

    Nothing else on the invoice is negotiable, and some of the charges above, are not negotiable either.

    I know that the dealer hold back, and the sales person commission is what is negotiable for sure. I’m not sure about the Toyota charges, I intend to find out more since we haven’t paid anything yet, not even a deposit for the car we ordered.
    So we are still not at a loss here.

    But if you ask me, would I want to spend 5 hours at a dealership haggling over a few hundred bucks. Definitely not, I like to pick the exact car I want, know that it is brand new, pay for it, and get out of there.

    As I said, the process took 30minutes, and most of it was walking around deciding on colors (interior/exterior) trim etc. The actual office time with the sales person, was close to nothing.

    I highly recommend this program to anyone who wants a hassle free purchase. You will not get the absolutely lowest price, you can haggle lower. But you will definitely not get ripped off, in fact, you’ll get a better price than the majority. That is guaranteed. So decide how you value your time in money, and go for it. Haggle or no haggle, make sure you understand all the numbers on the invoice sheet.

    A word on trade ins, you always get screwed here. So make a decision, since its your option to do a private sale on the trade in instead.

    Filip

  24. dlr in or
    October 20th, 2009 at 01:59 | #24

    The Costco Auto Program is a JOKE. Once we located the car I wanted the dealer had me come in to “finalize the purchase”. Never in the weeks waiting for the car would he explain how the program worked or talk money. Just kept saying that I would be happy. Well $250 under MSRP was a waste of my time. So as I was walking out the door he started doing some realistic talking and after the usual negotiating, I did buy the car at a price $1430 under what the “Costco No Haggle Auto Program” offered.
    The next time I buy a new car I won’t waste my time with the Costco Auto Program. I’m sure I can do much better on my own.

  25. Rock in PG
    October 19th, 2009 at 22:19 | #25

    Anyone had any experiences with Costco purchase program for Toyotas in the San Francisco Bay Area?

  26. cadillac srx
    October 16th, 2009 at 12:29 | #26

    This will be my first time buying a car with out some help and I like what you are saying. Keep up the good work. Al.

  27. cadillac srx
    October 16th, 2009 at 12:23 | #27

    I have a 1999 Deville only 60,000 miles good condition. Do you think I can get a good deal on a 2009.

  28. Jed
    October 1st, 2009 at 21:23 | #28

    @Ralph

    When I was shopping for a car in 1985, the Toyota dealers were sitting on top of the world and they knew it. The salesman at the local Toyota dealership never even looked up from his newspaper as he told me something like “If you want a Toyota, give us $500 and we’ll put your name on the waiting list, and when you get to the top, you’ll be permitted to buy the next Toyota that comes in.” Forget about choosing color or options. I don’t think they would even let me choose the model. But they could get away with it then. Ten years later, they were still trying to pull the same thing. As soon as I became aware of the Costco plan, I went with them. Got a Subaru that time. The dealer still managed to squeeze in a couple extra-profit fees, but it did make the process simpler and probably saved money over doing it myself. But you’re still at their mercy with the trade-in. Fortunately I have an arrangement that is slightly less painful. I go to the dealer, tell them that I’m not sure whether I’m going to trade in my car, and ask them for a trade-in price, and a separate purchase price that will remain constant regardless of whether I trade-in. I negotiate as best I can on the trade-in, and then I sell my old car to my brother-in-law. He’s happy because he gets the car for far less than it’s really worth, and I’m … well not quite as unhappy as I would be otherwise, because the money I lose at least stays in the family.

    btw: The local Toyota dealership is on a low-lying piece of land that got flooded by Hurricane Floyd in 1999. While the user-car dealer next door had all his salesman out driving all their cars to the Home Depot lot across the street, the Toyota dealer just sat there and watched. The only thing he rescued from his place was his flood insurance policy. The insurance paid for all his used cars that got flooded, and for a complete rebuild of his building. The used car dealer has since gone out of business but the Toyota dealer is still there. Go figure.

  29. September 28th, 2009 at 14:30 | #29

    In Denver the Toyota dealers add $499 as dealer prep for putting air in the tires and oil in the engine. Does the Costco price eliminate this charge? Does the purchaser still have to bargain with the dealer about those very valuable add-ons like Scotchguard on the seats and stripes on the side of the vehicle? In the past I purchased a few new cars through my Credit Union and the quoted price was the final price except for taxes, title, and license fees(no dealer prep or add-ons).
    For neophyte buyers it’s worthwhile to note that the Dealer’s invoice price is higher than the invoice price (including the destination charge) listed on the kbb site.
    It was 1 percent over the invoice on my last purchase.

  30. Daren Fonda
    September 17th, 2009 at 12:01 | #30

    @Robert I’m writing a story for a national personal finance magazine about car buying services like Costco’s and would like to talk to customers about their experiences. Please email me at dfonda@hearst.com if you’re interested.

  31. September 14th, 2009 at 21:30 | #31

    With the whole US car industry desperately trying to sell cars its time not to take any shit from car dealers they need to sell cars or become extinct so make your offer if the dealer doesnt like it walk out his stock costs him money to argue over so the customer has the power.

  32. tgriffith
    September 14th, 2009 at 15:29 | #32

    @A
    Good luck! And yes, please do let us know what your experience is like.

  33. A
    September 14th, 2009 at 10:43 | #33

    I am currently in the market for a new car. After weeks of looking my husband and I have finally agreed on the Mazda CX-9. I did a little negotating yesterday at a dealership and really got nowhere. I think they really thought they could take me for a ride since I was there without my husband. I have now contacted another dealer through the Costco program and I am going to see what kind of price they come up with for the same car. I will let you know what happens…

  34. Robert
    August 19th, 2009 at 07:48 | #34

    I went to two dealerships yesterday. One was a Honda the other a Nissan. The Honda guy showed me that the Costco price was invoice plus $50, but he never showed me the invoices of the two cars we talked about (and i asked for). The Nissan guy told me invoice minus $100, and did show me the invoice for the car I drove. The Honda dealership started offering me $300 bellow wholesale price for my 2007 Ford Focus with only 38000 miles. The Nissan guy $2000 bellow wholesale. It looks to me that the Costco program works only if you do not have a trade-in. The dealerships want to make the money lost with Costco on your trade, plus make a bunch more. On top of that the cars had “extras” that I did not want and they added $700-800 to the price of the car. They told me they had this “extras” because everybody wants them. I don’t. One more thing: If you are going to use the Costco program, when you see the final paperwork look for all the inflated extra “fees” they will charge you: documentation fee, registration fee, manager’s fee, coffee fee, cleaning fee, etc. Good luck!!

  35. Bob
    August 17th, 2009 at 18:38 | #35

    I don’t usually get all fluffy over any particular retailer, but I have to say that 3 months ago I bought tires through Costco and it was a great experience; high quality tires that I would never have normally bought, at a great price, including the $70 off that someone above had a problem with. So I’m willing to look at this program. I don’t like the hassle of haggling, but paying more than I need to is like drinking poison to me. I usually get the dealer invoice price from Edmunds and offer a couple hndred over that, but if I can easily get a price close to my best efforts, than this is worth it.

  36. August 16th, 2009 at 18:05 | #36

    We bought a Toyota Tundra through Costco a while back, after talking to a couple of friends who had already done it. I have to admit, it was the only pleasant car buying experience we’ve ever had. The only thing you have to dicker over is your trade-in. My neighbor told me that his sister was a employee at Costco. Her job was to go “car shopping” to check that dealerships were giving the Costco price. Months later, when having our truck serviced at the dealership, the mechanic told my husband that he bought his new Toyota through Costco because it was a better deal than he could get as an employee. We’ll never again sit at a dealership for hour after stressful hour, hoping to get a good deal.

  37. LS
    August 13th, 2009 at 15:38 | #37

    I’m so glad I found this webpage! I’ve been doing research online w/Costco Auto on the 2009 Hyundai Santa Fe or Toyota Venza (we’ll probably go w/the Santa Fe). I was nervous and wondering how the Costco program works and it seems to be what they say it is. We are going to go to a dealership to test drive them both this weekend but they won’t get too far with us! I have even been hesitant to fill out the online info for Costco to contact us because I don’t want to get car dealer harassing phncalls. I feel much better now.

    By the way – Randy – I laughed out loud when I read your comment, that’s hysterical!

  38. tgriffith
    August 3rd, 2009 at 12:50 | #38

    @ally
    ally-
    We’d love to know what car you got and how you did on it! Thanks for dropping by.

  39. ally
    August 3rd, 2009 at 11:27 | #39

    OMG. I am so glad I read up on all of this. We are members of Costco and Sam’s, and I don’t know why I didn’t think of their auto-buying program before. We were negotiating with a dealership before realizing we might be able to do better with Costco. My boyfriend is at the dealership now. He just texted me that the salesman/manager wanted to explode when hearing the word “Costco.”

  40. SRP
    July 31st, 2009 at 16:53 | #40

    So, I believe that even the Costco price is negotiable.

  41. SRP
    July 31st, 2009 at 16:50 | #41

    I, too, decided to “shop” around (and still am). The non-Costco price I came up with was $16,100 — but “the General Manager is really motivated and probably can do better than that.” I haven’t gotten to the General Manager, yet. The Costco price at the different dealer was $15,500. I asked the manager “Is the Costco price the very best price I can get?” He said yes, that it is $700 BELOW invoice.

    I decided to e-mail the dealer with the Costco price and say I can afford $15,000 even — he called back and begged me to come in — that we are very close and can work something out.

  42. Cathy
    June 29th, 2009 at 20:00 | #42

    I just spend all day looking at a Toyota, then came home to find that the price was $3,000 over invoice price. Lucky I didn’t buy it because it seemed just a tad bit high. Costco would have saved me time and money and maybe I’d have a car today.

  43. tgriffith
    June 29th, 2009 at 10:53 | #43

    @Ms. E
    Hi Ms. E,
    While you might get a better deal on a Chrysler Aspen, the Chevy Tahoe might be the better choice. Chrysler will discontinue the Aspen while the Tahoe consistently gets good reviews and is a dependable choice. With the Costco deal, you can’t really go wrong on it.
    Here’s an article with more tips on getting a good deal:
    http://www.cargurus.com/blog/2009/01/12/eight-simple-rules-to-getting-the-best-deal-on-a-new-car/

  44. Ms. E
    June 29th, 2009 at 05:13 | #44

    Matt, you offered advice to others on how to haggle with car dealers. Since I’m a female they really salivate like dogs when they see us coming. Costco does not have a Chrysler dealer in it’s program, but that’s the product that I am interested in. I want the 2009 Aspen by Chrysler. I normally view online, and have navigaged through Edmunds. What’s the best best way to get the price you want? I go into it well informed about the vehicle I want, so what are some other tactics that I can use? Also, I like the Chevy Tahoe which does have dealers participating in the Cstco program.

  45. joe
    May 29th, 2009 at 12:12 | #45

    I purchased 4 tires through Costco’s 70 dollar off sale and called salesperson to doublecheck it and more than one employee verified the link http://tires.costco.com/TSSapp/TireLanding.xhtml was for the tires I bought and they won’t honor the discount now. they said it was for tires that weren’t on it but the tires I bought were from the link they had online, they offered no good faith gesture, Starbucks gives you a free coffee if your unhappy! I would have to say their tire sale is a scam that get a small percentage of all the clickers but they don’t care! and it is obvious after at least 8 e-mails to them. Beware they don’t tell you ahead of time if the ones you click on aren’t covered and even when an employee confirms that they are (i had the name of the employee and extention, it was even on their computer noted) they won’t honor and basically they took the bully approach, they don’t care! Will not honor it, and no good faith friendship offer! Simply you were took, get used to it!

  46. matt
    May 27th, 2009 at 22:29 | #46

    To all of you who are the cowering type:

    You really need to try going through the internet sales team and using something like edmunds.com…that way, you never step foot into the dealership, (once you’ve settled on your car type) you control the pricing at all times (remember, you can tell them you need to speak to your manager too (then hang up)….and you really get to piss them off. You always know your price, can check theirs against the bottom line, and the worst that can happen is they say, sorry, can’t do that….I’ve bought my only two new cars that way, and the last one, a 4 runner, I figured the deal was cancelled, since the guy’s manager said, no way…Then, about two hours later, the sales guy called me and basically pleaded with me, what are you doing? Trying to break my balls? I told him, no, I want to buy a car at my price…..I made one more pitch, adjusted my price by 200 bucks, and he said, be here in an hour, which i did….He barely looked at me (which I loved) and the paperwork was signed within 1.5 hours. He never seemed so pleased to see me leave the dealership.

    If anyone wants more tips, feel free to contact me

    Matt

  47. tgriffith
    May 27th, 2009 at 08:34 | #47

    @Randy
    Randy, that’s officially your funniest comment of all time! Hats off to you, sir.

  48. Randy
    May 27th, 2009 at 06:43 | #48

    Look on the bright side… At least they don’t make you buy six of them at one time. They could improve their program, though, by providing a free casket and flowers if you die in the car while you own it.

  49. chase
    May 21st, 2009 at 15:18 | #49

    I used the Costco Auto Program about a year ago… like you said, “if you’re the kind of person who cowers at confrontation and despises negotiation…” well, that is me! I went in with my wife to get her a new car (her car was stolen) and the dealer convince us to look at cars that we thought were out of our price range! I thought why not, at least we could see the price that Costco negotiated for us… and you know what? We saved almost $3,000 off our 2007 Toyota Corolla – putting us right in our price range! If it was not without the Costco Auto Program, we probably would be driving a 2003 POS that my wife though was the best vehicle in our price range! Hahaha, I laugh at dealerships now, because the Costco Auto Program made it easy for people like me!

  50. Kyle L.
    May 21st, 2009 at 10:44 | #50

    Heck! I am willing to part with $300! Last time I purchased a car, the whole negotiation took about 3-4 hours. That is 3-4 hours + 2 years off of my life I would gladly pay $300 to get back. When will dealerships figure out that the best way to not intimidate potential buyers is to be up-front about the whole transaction. I shudder at the idea of buying another car.

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