Costco is widely recognized for bulk groceries, affordable food court delights, and surprisingly, even for car buying assistance. Since 1989, the Costco Auto Program has facilitated millions of vehicle purchases for its members, promising a less stressful, haggle-free experience with member-exclusive pricing. While the new car program is well-known, many prospective buyers are specifically asking, “Is Costco Used Car Program Good?” This review dives deep into the Costco Used Car Program to help you determine if it’s the right path for your next used vehicle purchase.
Understanding the Costco Used Car Program
It’s crucial to clarify that the Costco Auto Program doesn’t directly sell cars from Costco warehouses. Instead, it functions as a referral service, connecting Costco members with a network of over 3,000 participating dealerships across the United States and Puerto Rico. These dealerships offer pre-negotiated pricing and incentives exclusively to Costco members. For used cars, the program operates similarly. You gain access to participating dealerships’ inventories of certified pre-owned and used vehicles, potentially unlocking savings and a more streamlined buying process.
The Costco Used Car Program focuses primarily on certified pre-owned (CPO) vehicles, offering an added layer of assurance. CPO cars typically undergo rigorous inspections and come with manufacturer-backed warranties. While the program also includes standard used cars in dealership inventories, the emphasis on CPO vehicles is a significant point to consider when evaluating its value proposition. Through the Costco Auto Program website, members can search for used vehicles at participating dealerships in their area, filtering by make, model, and other criteria. Once a vehicle is selected, members are connected with an Authorized Dealer Contact at the chosen dealership to discuss pricing and finalize the purchase.
The Perks of Using Costco for Used Cars: Is It Worth It?
So, is the Costco Used Car Program actually “good” when it comes to buying used vehicles? Let’s examine the potential advantages:
- Streamlined Used Car Buying Experience: Similar to their new car program, Costco aims to simplify the often complex and time-consuming process of buying a used car. By partnering with select dealerships and pre-arranging pricing, the program intends to reduce negotiation hassles and expedite the purchase. The promise is a more efficient experience compared to traditional used car buying.
- Access to Potentially Better Deals on Used Cars: While Costco doesn’t guarantee the absolute lowest price on every used car, the program leverages Costco’s bulk buying power to negotiate discounted pricing with participating dealerships. These member-only prices can translate to savings on certified pre-owned and used vehicles. The extent of savings varies, but the potential for a better deal is a significant draw.
- Costco Customer Service Applied to Used Car Purchases: Costco is renowned for its customer service, and this ethos extends to its Auto Program. Participating dealerships are vetted for high customer service standards, and Authorized Dealer Contacts are specifically trained to work with Costco members. Should any issues arise, Costco’s Member Advocacy group offers an additional layer of support, providing a safety net that’s not always present in typical used car transactions.
- Convenience for Costco Members: For existing Costco members, utilizing the Auto Program for a used car purchase adds convenience to their membership benefits. It’s a one-stop shop to explore used car options within a trusted network, potentially saving time and effort in searching and negotiating independently.
- Reputable Dealerships and CPO Focus: The program’s emphasis on certified pre-owned vehicles and partnerships with vetted dealerships can offer peace of mind. CPO vehicles come with warranties and have passed inspections, reducing the risks associated with buying a used car privately or from less reputable sources. This focus on quality and reliability is a strong positive for risk-averse buyers.
Potential Downsides: Are There Catches to Costco’s Used Car Program?
Despite the potential benefits, it’s crucial to consider the potential drawbacks to get a balanced perspective on whether the Costco Used Car Program is “good” for you:
- Membership Cost vs. Savings on Used Cars: To access the Costco Used Car Program, you must be a Costco member, incurring an annual membership fee ($60 for Gold Star, $120 for Executive). The savings on a used car must outweigh this membership cost to make it financially worthwhile. If the discount obtained is minimal, the membership fee can negate any real savings.
- Limited Selection of Used Cars Compared to New: While the Costco Auto Program offers a wide range of new vehicles, the used car selection is inherently dependent on the inventories of participating dealerships. The available makes, models, and specific used vehicles will vary based on location and dealership stock. You might not find the exact used car you’re looking for within the program’s network.
- Dealer Participation Still a Factor: Not all dealerships participate in the Costco Auto Program, and even within participating dealerships, not all used vehicles might be included in the program’s pre-negotiated pricing structure. Availability depends on the dealership’s agreement with Costco and their used car inventory.
- No Upfront Used Car Pricing Online: Similar to the new car program, the Costco Used Car Program doesn’t display pre-negotiated used car prices online. You must go through the process of selecting a vehicle, contacting a dealership, and speaking with an Authorized Dealer Contact to learn the member-only price. This lack of price transparency upfront can be inconvenient for initial comparison shopping.
- Potential for Upselling at Dealerships Even with Pre-Negotiated Used Car Prices: While the Costco program aims to eliminate haggling on the vehicle price itself, dealerships may still attempt to upsell additional products and services like extended warranties, paint protection, or accessories. Members need to remain vigilant and decline unwanted add-ons to ensure they are truly getting the best value.
- Still Need to Finance or Negotiate Trade-in: The Costco Auto Program primarily focuses on the purchase price of the used vehicle. Financing and trade-in values are still separate aspects of the transaction that members need to manage. While some dealerships might offer competitive financing or trade-in deals, it’s essential to compare offers and negotiate these elements independently to secure the best overall deal.
So, Is the Costco Used Car Program Actually Good for Buying Used Cars?
The answer to “is costco used car program good?” is nuanced and depends on individual needs and priorities.
The Costco Used Car Program might be very good for you if:
- You are already a Costco member: If you already pay for a Costco membership, leveraging the Auto Program for a used car purchase is a natural extension of your membership benefits.
- You value convenience and a streamlined process: If you dislike haggling and prefer a more straightforward car buying experience, the Costco program can simplify the process.
- You are primarily interested in certified pre-owned vehicles: The program’s focus on CPO cars aligns well with buyers seeking added assurance and warranty coverage.
- You trust the Costco brand and customer service: If you value Costco’s reputation for customer satisfaction, the program’s Member Advocacy group and vetted dealerships offer added peace of mind.
The Costco Used Car Program might be just good or less ideal if:
- You are not already a Costco member and are solely considering membership for a used car: Carefully weigh the potential savings against the membership cost to determine if it’s financially beneficial.
- You are looking for a very specific or rare used vehicle: The limited selection based on dealership inventory might make it challenging to find a particular make, model, or trim.
- You are a highly skilled negotiator and enjoy the haggling process: You might be able to negotiate a better deal on your own, especially on non-CPO used cars, by shopping around and directly negotiating with dealerships.
- You prioritize upfront price transparency: The lack of online pricing might be frustrating if you prefer to compare prices and shop extensively online before contacting dealerships.
Alternatives to the Costco Used Car Program for Finding Great Used Car Deals
If the Costco Used Car Program doesn’t perfectly align with your needs, several alternatives exist for finding great used car deals:
- Independent Negotiation: Directly negotiating with dealerships remains a viable option. With research and strong negotiation skills, you might secure competitive pricing, especially on used cars outside of CPO programs.
- Used Car Brokers: Car brokers can act as your personal car shopper, negotiating on your behalf and potentially finding deals you might miss. However, brokers charge fees, so factor that into your overall cost.
- Online Used Car Marketplaces: Platforms like TrueCar, Carvana, and Vroom offer online used car shopping experiences, with varying degrees of price transparency and convenience. TrueCar, mentioned in the original article as a competitor to Costco for new cars, also has a used car marketplace.
- AAA Auto Buying Program: Similar to Costco, AAA offers a car buying program for its members, potentially providing access to pre-negotiated pricing at participating dealerships.
- Local Dealerships and Private Sellers: Don’t overlook traditional local dealerships and private sellers. Exploring a wider range of sources can sometimes uncover unexpected deals or unique vehicles.
Conclusion
In conclusion, the Costco Used Car Program can be a valuable resource for Costco members seeking a streamlined and potentially cost-saving way to purchase a used vehicle, particularly a certified pre-owned one. It offers convenience, customer service benefits, and access to a vetted dealership network. However, it’s not a guaranteed path to the absolute lowest price, and factors like membership costs, limited selection, and the need to still manage financing and add-ons should be carefully considered. Ultimately, whether the Costco Used Car Program is “good” for you depends on your individual circumstances, priorities, and car buying style. Weigh the pros and cons, compare it to alternatives, and make an informed decision that best suits your needs and gets you behind the wheel of your ideal used car.
