What Is the Costco Car Buying Program: A Comprehensive Guide

The Costco Auto Program is a service available to Costco members that aims to simplify the car buying process and secure pre-negotiated pricing on new and used vehicles. For many, the prospect of haggling at a car dealership is daunting. This program offers a potential alternative, promising a streamlined experience and cost savings. But how exactly does the Costco Car Buying Program work, and is it the right choice for you? This guide will delve into the details, exploring the benefits, potential drawbacks, and everything you need to know to make an informed decision.

Understanding the Costco Auto Program

The Costco Auto Program isn’t actually run by Costco Wholesale directly. Instead, they partner with Affinity Auto Programs, Inc., an independent company that operates the program. This distinction is important to note, as it clarifies that while branded under the trusted Costco name, the program is managed by a separate entity.

The core concept is to connect Costco members with participating dealerships. These dealerships agree to offer prearranged pricing to program members, theoretically eliminating the need for extensive negotiation. This can be particularly appealing to those who dislike the traditional car buying experience.

How the Costco Car Buying Program Works

The process typically unfolds in these steps:

Visit the Costco Auto Program Website: Members start by visiting the dedicated Costco Auto Program website. Here, you can research different makes and models and indicate your interest in purchasing a vehicle.
Vehicle and Dealer Selection: You specify the type of car you’re looking for – whether new or used, and any specific models you have in mind. The program then identifies participating dealerships in your area.
Connect with a Participating Dealership: The Costco Auto Program will provide you with contact information for a designated contact person at a participating dealership. This contact is usually a manager or sales specialist trained to handle Costco Auto Program customers.
Pre-Negotiated Pricing: When you contact the dealership, you should identify yourself as a Costco member and inquire about the Costco Auto Program pricing. The dealership will then present you with pre-negotiated pricing, which is intended to be below the Manufacturer’s Suggested Retail Price (MSRP).
Test Drive and Purchase: You can then schedule a test drive and, if satisfied, proceed with the purchase at the pre-arranged price. Financing and trade-in options are typically handled directly with the dealership.

Benefits of Using the Costco Car Buying Program

Several advantages are often cited by users of the Costco Auto Program:

Simplified Negotiation: The primary draw is the promise of pre-negotiated pricing. This removes the often stressful and time-consuming aspect of haggling with salespeople. For those who find negotiation uncomfortable, this can be a significant benefit.
Potential Cost Savings: The program aims to provide members with savings compared to MSRP. While the exact amount varies depending on the vehicle, make, and model, the potential for discounts is a key incentive.
Streamlined Experience: The program is designed to streamline the car buying process. Connecting with a designated dealership contact and having pre-arranged pricing can save time and effort.
Reputable Dealership Network: Costco partners with dealerships that meet certain customer service standards. This can offer a sense of security and trust compared to approaching unknown dealerships independently.
Costco Member Perks: Occasionally, the program may offer additional incentives or promotions exclusively for Costco members, such as service coupons or accessory discounts.

Potential Drawbacks and Considerations

While the Costco Auto Program offers benefits, it’s important to consider potential downsides:

Limited Vehicle Selection: Not all makes and models are necessarily available through the program. Vehicle availability depends on participating dealerships in your area. If you have a very specific or niche vehicle in mind, it might not be offered through the program.
Dealer Participation Varies: The number of participating dealerships can vary by location and brand. In some areas, your choices might be limited, reducing your ability to shop around for the best deal even within the program.
“Pre-Negotiated” Doesn’t Always Mean “Lowest Price”: While the pricing is pre-negotiated, it’s still essential to do your own research. Compare the Costco Auto Program price with online pricing tools, manufacturer incentives, and potentially quotes from dealerships outside the program. “Pre-negotiated” doesn’t automatically guarantee the absolute lowest price possible.
Focus on New Cars: The program is often more heavily focused on new car sales. While used cars may be available, the selection and potential savings might be less significant.
Dealership Experience Still Matters: Ultimately, you’re still purchasing a car from a dealership. The quality of your experience will depend on the specific dealership and the designated contact person you work with. Customer service can vary even within a program like this.
Financing and Add-ons: Be aware that while the vehicle price might be pre-negotiated, financing terms, trade-in values, and add-on options (like extended warranties or accessories) are still subject to negotiation with the dealership. Don’t assume these are also automatically discounted.

Is the Costco Car Buying Program Right for You?

The Costco Auto Program can be a valuable tool for certain car buyers, particularly those who:

Dislike Negotiation: If you dread haggling and prefer a more straightforward pricing approach, this program can be appealing.
Value Convenience: The program offers a streamlined process, saving time and effort in the initial stages of car buying.
Are Costco Members: If you’re already a Costco member, utilizing the program is a perk worth exploring.
Are Open to Vehicle Brands Offered: If you are flexible on specific makes and models and are interested in brands that participate in the program in your area, it’s a good option.

However, it may not be the best choice for everyone:

Price-Sensitive Buyers Who Enjoy Negotiation: If your primary goal is to get the absolute lowest possible price and you are comfortable with aggressive negotiation, you might find you can achieve better deals by shopping around independently and negotiating directly with multiple dealerships.
Buyers with Very Specific Vehicle Needs: If you require a rare or very specific vehicle configuration, you might have more limited options within the program.
Those Not Comfortable with Dealerships: While the program aims to improve the dealership experience, you still interact with a dealership. If you have fundamental concerns about dealerships in general, this program may not fully address those.

Tips for Using the Costco Auto Program Effectively

If you decide to use the Costco Auto Program, consider these tips to maximize your experience:

Do Your Research: Before using the program, research the fair market value of the vehicle you want. Use online pricing tools like Kelley Blue Book or Edmunds to understand a reasonable price range.
Compare Prices: Don’t assume the Costco Auto Program price is automatically the best. Get quotes from dealerships outside the program as well to compare.
Understand the “Out-the-Door” Price: When discussing pricing with the dealership, focus on the “out-the-door” price, which includes all taxes, fees, and other charges, to get a clear picture of the total cost.
Be Prepared to Walk Away: Even with pre-negotiated pricing, be prepared to walk away if you’re not satisfied with the deal. Don’t feel obligated to buy just because you used the program.
Read Reviews: Research reviews of the participating dealership you are connected with to get an idea of their customer service reputation.
Inquire About Incentives: Ask the dealership about any manufacturer incentives or rebates that you might be eligible for, in addition to the Costco Auto Program pricing.

Conclusion

The Costco Auto Program offers a potentially valuable service for Costco members seeking a more straightforward and potentially cost-saving car buying experience. By providing pre-negotiated pricing and connecting members with reputable dealerships, it can simplify a process many find stressful. However, it’s crucial to approach the program with realistic expectations, do your own price comparisons, and understand both the benefits and potential limitations. Ultimately, whether the Costco Auto Program is the right choice depends on your individual needs, preferences, and car buying style.