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Costco Auto Program for Car Buying - Is It Worth It?

By Michael O'Connor | April 11, 2022

Buying a car can be incredibly exciting, but if you aren’t familiar with the high-pressure ways of the dealership, it can also be quite intimidating. The car-buying experience is something that many people dread and that can cause them to go for much longer periods without getting the new car they need. That’s why the Costco Auto Program can be such a big help for many people.

The program is available to members and gives them access to Authorized Dealers that Costco has trained and negotiated with. This lets people get the benefit of Costco’s robust customer service while still getting all the incentives and deals that come along with buying a vehicle from a dealer. By understanding everything about the Costco Auto Program, you can decide if it is the right choice for your next car purchase.

How Does the Costco Auto Program Work?

The program lets customers search through an online database of different cars that are available through Authorized Dealers. These dealers negotiate prices with Costco and these prices are then passed on to the customer. The database allows you to search for a car using parameters like trim, features, color, make, and model.

Once you have chosen your vehicle, Costco will then direct you to the Authorized Dealer and salesperson who is handling that car. There, you can find the vehicle’s discounted price, which has already been negotiated by Costco. From there on, you will decide on whether you want to buy or lease the car and what the terms will be.

Is the Costco Auto Program Good?

The program has benefits that many people think make it well worth the extra steps. If you are someone who wants a no-hassle, easy car-buying experience, the program could be a great option for you. Many of the trappings of the dealership experience are stripped away and you only have to focus on getting the car you want and driving away happy.

The program can also help save you some money with the purchase as well as make it more convenient for you. Members who use the program end up saving an average of $1,000 or more when they buy a new vehicle. These savings can help offset the cost of a Costco membership, which is needed to take advantage of the program.

Costco Auto Program vs the Dealership:

Using the program offers quite a few advantages over the traditional dealership experience. A member has the luxury of searching for cars in the comfort of their own home and can use the search function to choose all the different features they might want with their new vehicle. This makes shopping for new or used vehicles much more convenient and less time-consuming than going to different dealerships and speaking with dozens of salespeople.

When you shop for a car at a dealership, you will also most likely have to deal with things like high-pressure sales techniques and haggling. If you are someone who does not like these kinds of tactics, the auto buying program may be the right choice for you. Costco does all the negotiations for prices before the cars are listed and the price that you are offered is the price you are going to pay.

Benefits of the Costco Auto Program:

Even if you are not a member, becoming one might be worth the price if you are thinking about making a vehicle purchase. There are several benefits that come along with buying a car through Costco and their participating dealerships. Understanding these benefits can help you decide if it will be worth the price of setting up your membership.

Low-Pressure:
Perhaps the biggest benefit of purchasing a car through the program is th e fact that it is a low-pressure buying situation. You will not be pressured into purchasing extras or buying a car that is different from the one you went to the participating dealer to buy. This is worth the cost of membership for most people as the high-pressure sales tactics are most peoples’ least favorite thing about buying a car.

The low-pressure nature of buying a car through the auto program also opens you up to options you might not otherwise consider. Since the inventory is held by authorized dealer contacts, you can scale down your search to cars that are available in your area. This lets you choose from cars that you might not have known would be a good fit and go give them a test drive at your convenience.

Inspected Vehicles:
If you are looking to buy a used car, the program may be a good option. The vehicles on offer are generally by major manufacturers like Volvo, Toyota, Chevrolet, and Cadillac. The selection will be limited to what is available at your local approved dealership, but this is no different than shopping for a used car on the private market.

Where the auto program shines, though, is in its quality control. Most vehicles sold through the program go through inspections and repairs that can help you feel confident that you are getting a high-quality vehicle. Many of the participating dealers also offer select pre-owned and factory-certified cars, many of which will still have the factory warranty or an extended warranty offered by the automaker.

Convenient Shopping:
One of the biggest advantages of buying a car with the program is its convenience. All you have to do is go to the program’s homepage and start shopping for the car that fits your specific needs. The interface assists you with finding the features and trims you are looking for and will then direct you to the dealership closest to you that is selling it.

Not only can you avoid the high-pressure sales tactics of the dealership, but you can also shop at your convenience and according to your schedule. Everything you see on the website is what is included with the vehicle and there are no surprise elements for you to contend with. This all adds up to a much easier shopping experience.

Incentives and Specials:
When you buy a car through the program, you also get the benefit of Costco’s negotiation regarding incentives and limited-time specials. The company makes sure that its members get access to all the manufacturer incentives and rebates that come with certified pre-owned vehicles and new cars. This can add up to quite a bit of savings for you in the long run.

Costco also takes all of these things into account when they are working on the pricing for the vehicles. This lets you take advantage of these incentives without having to fight for them at the dealership. Because of this, the buying process with the auto program is much more convenient while still saving you money.

Downsides of the Costco Auto Program:

While the program is a convenient and hassle-free way to buy a car, there are some downsides to the process. If you are someone who enjoys the game of haggling and likes to work with a traditional dealer, there could be some major disadvantages of the program. Understanding the drawbacks can help you get a good idea of whether it will be worth it to you.

No Prices Over the Phone:
One of the biggest downsides of using the program is the fact that they don’t list the prices on the website or tell you over the phone. The website shows the suggested MSRP of the vehicle but it won’t show you what you will be paying. This can be a big drawback for people who are shopping for a car on a budget.

One thing that you can be sure of, though, is that member pricing will be less than the listed MSRP. You will simply have to go to the dealership to get the price. You can avoid being surprised by the price by only shopping for cars that fit within your budget at their suggested price. You can think of the savings you are getting like using a coupon when checking out at the grocery store.

Possibility of Up-selling:
Something you should keep in mind when using the auto program is the fact that some dealerships may not be as honest as others. Some customers have reported that the dealership ignored Costco’s pricing and tried to upsell them anyway. Others reported that their contact information was used to try and sell them other cars after they did not make the initial purchase.

One of the ways to avoid this is to research the dealership that your car is being offered at before you go and look at it. This will give you a good idea of what other people have experienced at that particular dealer and what their process is like.

Not for Hagglers:
The program may also not be right for you if you are good at haggling. While most people save an average of $1,000 on their vehicle purchases, this is a similar amount to what you can save if you know how to get the best deal already.

For the most part, the auto program is for people who want the least amount of haggling and are not comfortable with the traditional car-buying experience at a dealership. If you feel like you are good at working out a deal, you may be able to get a lower price on your own and may even get more for your money in the long run.

Prices at Authorized Dealer Service Centers:
One thing that people like about the auto program is that they can get their car serviced at Costco’s service centers. If your local store doesn’t have a service center, you can also bring your vehicle to an Authorized Dealer Service Center for repairs. Aside from oil changes, you can get 15 percent off services at these centers if you purchase your car through the auto program.

However, something you should keep in mind is that while the price of your car is negotiated by Costco, the prices of services are not. Because of this, a third-party service center may end up charging you more to make up for the discount. Be aware of this and shop around for the best deal on auto services to make sure you are getting a good deal.

Alternatives to the Costco Auto Program:

If you are not interested in purchasing your car through the program but still like the idea of buying your car online, there are other options available to you. As innovations and changes happen in the auto dealing industry, there are going to be some companies that offer better deals and better services than others. Knowing which companies you can use to get similar services to the Costco Auto Program can help you choose one that fits your needs and budget.

Carvana:
Carvana is an online dealership that will not only help you find a car, they will also take your trade-in. With Carvana, you don’t have to go to the physical dealership and they will even deliver the car to your home. While you may not be getting the cheapest price, the convenience factor is incredibly high.

Vroom:
Vroom is similar to Carvana in that they buy and sell cars through their online platform. They will also deliver your car to your home, which is a very convenient feature for most people. Vroom specializes in selling low-mileage used cars that are under three years old, so you can be sure you are getting a vehicle that is in top shape.

CarMax:
CarMax is one of the oldest online platforms for buying and selling used cars. They have a focus on no-haggle sales and offer a very “what-you-see-is-what-you-get” buying experience. They also have one of the biggest inventories out of all the options for buying a car online.

Final Thoughts:

The program is a good choice if you are willing to pay the participation fee for a membership and don’t mind having to go to the dealership to find out your price. Having Costco’s famous customer service department behind you as you make your vehicle purchase can offer a lot of peace of mind and get you the deal you have been looking for. By understanding what this program has to offer, you can find a car that suits you and will give you many years of service.