The Costco Auto Program Delivers
Why are those shopping carts at Costco so big? In addition to buying oversized bundles of toilet paper and aluminum foil, you can buy a car there, too. No, you can’t wheel it around in your cart, but you can realize huge savings.
Several years ago, when my family was in the market for a new car, we decided a Chevrolet Suburban was the best choice for our needs. I heard I could buy a car through Costco, and being a happy Costco customer, I researched the car on Costco’s site. Since they work with local dealers, we called our local dealer, asked if they had Costco pricing, and were told yes. We drove to the dealer and started the process of buying our new car.
A Mistake I’ll Only Make Once
Sadly, the experience was horrible, not because of Costco, but because I hadn’t followed the Costco process. It turned out the dealer we chose wasn’t really Costco-authorized. All the sleazy tactics you hear about were used against us including bait and switch, hard selling a model on the lot in a funky color, and changing numbers on options and our trade-in that didn’t add up.
We finally told the salesman we needed to think about it and left frustrated and exhausted. The sales manager called us the next day and the harassment continued. He had a “rock bottom price” and when we asked him to fax the agreement to us, he got angry.
The whole ordeal left me feeling so icky inside I knew I’d never bring my car back for service. If there was a problem with the car, would this dealership even stand behind us?
Buying a car is a major purchase and we think of the dealer as a partner. What we found was an adversary. The experience was so contrary to the great customer service we usually experience at Costco that I knew something wasn’t right. I went back to their website and contacted customer service.
I quickly learned my mistake. I should have started by entering my zip code and then clicking “Find a Participating Dealer.” This ensures you work with a Costco authorized dealer from the beginning. These dealers are selected for the program because they meet the company’s standards for value and service. This also ensures you get Costco’s savings and a transparent buying process.
Soon I was connected with a dealer and scheduled a meeting.
The Costco Process: How Car Buying SHOULD Be
Once at the dealership, we met with a Costco-trained sales person. Our membership was verified and we went on a test drive.
We were given a base price and list of options (a real list with actual prices on it!) and built our Chevrolet Suburban. There were no hassles, no switching, and no excuses. The prices were right there in black and white.
The dealership didn’t have the exact car that we wanted on their lot, so the Costco representative found it in another dealer’s inventory. We agreed to pay a small mileage charge that was clearly identified rather than surprising us at the end of the transaction.
The resulting price was thousands lower than the “rock bottom price” the other dealer offered and because of the transparency of the whole transaction, we actually felt good about working with the new dealer. But the story doesn’t end there.
The salesman took us to the service center and introduced us to the service manager. He spoke to me directly, asked me about the kind of driving that I do, and explained the best way to use the options that we had selected on our new Suburban including the towing package, 4-wheel-drive system, and the best kind of gas choice. We were then introduced to the parts manager and offered a discount on parts.
Two days later, our new Chevrolet Suburban arrived and was fully detailed. We took it for a test drive and then finalized the deal. I drove home with a smile. I love my new car and the buying process felt good. I was confident that we truly found a partner for our car purchase and service relationship.
And Then It Gets Better
That was a few years ago, so I called Costco to find out if the company’s program still works this way. They’ve improved it since then by constantly working to ensure they have the best prices in the market. I described my experience to Rick Borg, vice president of program operations for the Costco Auto Program and he said my experience was what they want for every customer. “It’s all about value for the Costco member. The purchase price and process have equal emphasis in our model. We are always fine-tuning our program to continually improve it for our members.” In my conversation with Rick, I learned a few more things about Costco’s car buying service.
- Most makes and models are available. However, there may be instances when a new car is in short supply and occasionally certain vehicles are excluded or on a waiting list.
- Costco makes every attempt to provide “Best in Market” pricing. Members save on average $1,000 over the typical average transaction price. The savings varies by model. You will likely save more on a higher priced car and less on a value-priced car. The competition is continually shopped to fine-tune pricing.
- Costco Auto is available at all 448 warehouses. There is one dealer for each car manufacturer assigned to a warehouse. These dealerships are chosen carefully by their dealer ratings, ability to deliver, proximity to the warehouse, and comparative pricing.
- The process is always under review for improvement. Costco has mystery shoppers who go through the complete process to ensure best practices. Their member advocacy group follows up with everyone who contacts a dealer through the website or by phone to make sure that Costco’s standards were followed.
- Factory rebates and financing are available on Costco-program purchases, however, Costco does not provide financing. Customers should be prepared to find their own financing before they shop with Costco.
- If a dealership does not have the exact car you want, then you can factory order it or the dealership can request a trade with another dealer. That’s what they did for me.
- Costco provides extensive, ongoing training for auto dealership Costco representatives. Make sure that you are working with that representative.
- Leases and factory-certified pre-owned vehicles are available through Costco as well.
Another thing I learned from Rick is that Costco members can also save on service, parts, and accessories in the same transparent way on any car, no matter where it was purchased. The process is similar to buying a car through Costco. The member simply initiates contact through the website and then is connected with an authorized Costco service department. If that experience is anything like our car buying experience, you’ll get a great value without the usual frustration.
You Know It’s Good If You’ll Recommend It To a Friend–Or Your Mother
When my mother needed a car last year and asked my advice, I didn’t think twice before suggesting that she buy it through Costco. It’s the way car buying should be and now I’m spoiled and wouldn’t consider buying a car any other way.