Costco Auto Program for Cars - Is It Worth It?

Costco Auto Program for Cars - Is It Worth It?

Costco is more than hot dogs that have survived steep inflation and eggs that haven't. Americans know it as an almost one-stop shop for electronics, glasses, paper products, appliances, and car deals.

The Costco Auto Program is available to members and involves authorized dealerships working with the company and negotiating. It's designed to help members find a great deal on a new car without all the hassle and pressure of the dealership. Since its start in 1989, the Costco Auto Program has grown to cover used vehicles, parts, and service deals, and, now, electric vehicles.

Knowing how the program works and what it offers can help you decide if it is the correct route for your next car purchase. Here's a rundown:

How it Works

If you have a Costco membership, you can search through their database of vehicles available through authorized dealerships. You can find a car that suits you using the search parameters for things like make, model, trim level, and other features.

Costco has already negotiated and set the prices for these vehicles, so you can make an appointment with the participating dealer to get a price. You can proceed from there if everything meets your specific standards and needs.

The participating dealership will have an assigned salesperson for your vehicle that you will work with throughout the entire process.

Note, however, that you won't get the price for the vehicle until you start communicating with the salesperson. That is how the discounted prices are handled, so knowing your budget beforehand will be incredibly helpful.

Working with the Costco Auto Program is a much different buying experience than working with a traditional dealer.

Is the Costco Auto Program Good?

The Costco Auto Program is designed to make buying a car easy and free of what many people dread about shopping at a dealership. Since the prices are already set, you don't have to worry about haggling or unexpected fees.

If you are someone who finds the car buying process stressful, it could be the right option for you. Costco has already done the negotiations, so you can focus on finding the right vehicle for your particular needs.

Members who buy through the Costco program can also use manufacturer incentives and rebates that brands such as Cadillac, Subaru, and Hyundai might insist can't be combined with other offers. Since Costco handles all the negotiations, you can save money with their expertise in the car-buying process.

People who buy vehicles through the program save $1,000 or more on average on their vehicle purchases, in addition to any discounts available to non-members. Having a member advocate like Costco on your side is a great way to benefit from limited-time specials and other money-saving deals.

One of the most common accolades the program receives from members in reviews is the no-hassle, no-haggle process of buying the car. Specifically, members who have found the car-buying process intimidating or difficult have significantly benefited from using the program.

Many customers have praised the fact that salespeople didn't push them to buy and that they had Costco's customer service team on their side. They have also been impressed by the money they saved compared to the sticker price of the vehicles they were shopping for.

One issue that reviewers seemed to have is that the program appears to be increasing customer generation leads for the dealership. While this is somewhat true, there is more to it than that, such as the lower prices and more straightforward sales process.

However, it could be an issue if you are uncomfortable with how the dealerships get your information. Many reviews also mentioned the prices of service at the Authorized Dealers. Since service is separate from the Costco Auto Program, some dealers may charge a premium for maintenance, such as an oil change, which may not be the best route for you.

Costco Auto Program vs the Dealership

At first glance, using the Costco Auto Program is the same as going to the dealership yourself. However, having a middleman between you and the car seller is incredibly advantageous.

Most people only buy a new vehicle every few years, so they won't know how to negotiate a car's price. That opens them up to high-pressure sales tactics and upselling, which can cost much more money.

If you are uncomfortable advocating for yourself in a sales situation, the Costco Auto Program could be a great choice.

Using the program instead of going straight to a car dealer also allows you to get some member-only incentives that you wouldn't otherwise be able to take advantage of.

The auto buying program offers things like warranty specials and rebates. That is one advantage of having a middleman between you and the approved dealer. If you went straight to the dealership, you may not know what is available and could end up paying over the MSRP or at least not getting the discounts you could otherwise be getting.

Pros and Cons of the Costco Auto Program

While buying from the Costco car-buying program is generally a good idea, there might be better fits for some. Every person has their preferences regarding what they like and don't like about the process of buying a vehicle. Depending on your personality and your strengths as a car buyer, you could be better off skipping the whole program and going straight to the dealership. Understanding some of the pros and cons of the program can help you decide what the correct route is for you.

Pros of the Costco Auto Program:

No Sales Pressure

Perhaps the most significant benefit of the Costco Auto Program is that there is less sales pressure than in a traditional dealership sale. Costco effectively does the tricky art of negotiating for you. It means that all you have to do is decide whether the price works for your particular budget. If it doesn't, you still have the convenience of the listing service to return to and find a vehicle more in line with your price range.

High-Quality Vehicles

When buying a car through the Costco Auto Program, you can rest easy knowing that it has been inspected and is of the highest quality. That is especially helpful when searching for pre-owned vehicles.

Buying a used car can be fraught with issues, and if you are looking for the best way to be sure that the vehicle you are buying is in good shape, the program could be well worth it. Not only can you save some money, but you can also have extra peace of mind that you are buying a vehicle in good condition.

EV Help

Costco recently introduced a subsection devoted to buying an electric car. Not only is there special Costco pricing on popular new EVs like the Chevrolet Equinox EV, but the company can help navigate customers through the maze of federal, state, local, and utility incentives they could qualify for. And for those new to EVs, the marketplace also guides customers on what living with an electric is like living with one depending on the season and charging costs (the Costco Citi Visa offers 4% cash back on public EV charging, too).

Convenience

Not everyone has the time to visit several dealerships and shop for a new car. One of the major perks of working with the Costco Auto Program is that you can browse from the comfort of your home.

Since the available vehicles are already listed and ready to go, you can narrow your choices and find a suitable car. You should be able to find what you need without taking trips to multiple dealerships.

Specials

The Costco Auto Program often has coupons and specials available for you to take advantage of. Since they work directly with their dealer contacts, they will include any rebates or money-saving incentives in the Costco member-only price sheet that the dealership will provide once you have selected your vehicle. Taking advantage of these specials is one of the main reasons why using the program can be cheaper for you in the long run than going straight to the dealer yourself.

Cons of the Costco Auto Program:

Difficult to Find Pricing

One of the things that people tend to dislike about the Costco Auto Program is how difficult it can be to find the actual price of a vehicle. The car prices are not listed on CostcoAuto.com since they are for members only and not for the general public.

That means you must schedule an appointment with the dealer offering the car and find the price yourself. It can make budgeting difficult and force you to take too many trips to different dealerships to get a price that works for you.

No Haggling

Some car buyers like to haggle; if you choose to work with the Costco Auto Program, you won't have that control over the process. If you want to negotiate and have had success with it in the past, there will be better programs for you. All the prices for cars sold through the program have already been set, so there is no negotiation.

While some people love this about it, others may prefer not having the freedom to look for a little wiggle room in the sticker price.

Service Pricing

When you purchase your car through the program, you still buy it from the dealership. That means that the factory warranty and any extended warranties you get will require you to bring the car to the dealership for service and maintenance.

While the car purchase itself is covered under the program, the service you have to get later on won't. That means that car dealerships can charge what they want for service. Many people believe this is where the dealerships recoup their costs from the program, so it's important to keep an eye on prices at participating service centers before you agree to an estimate.

Buying a new car doesn't have to be a stressful process. If you don't like to haggle or worry about getting a bad deal, the Costco Auto Program could be an excellent option. With many vehicles to choose from and some excellent incentives, it could be a great program for people with specific needs regarding how they buy their car.

Knowing what the program has to offer and how you can benefit from it will help you decide if it's the best way to make the perfect vehicle purchase.