Thursday, June 19, 2014

The Worst Thing About Costco (The Auto Buying Program)

Entrance in Henderson, Nevada
I have been a loyal Costco customer for I can't even remember how long now.  I evangelize about Costco. I wish I had a dollar for every time I've bragged about Costco.  So, it will come as a shock to some that I have found a service at Costco that has really let me down.  It's the Costco Auto Program.

I am in the market for a new car and thought that since I'm a Costco member I'd take advantage of one of the services I haven't used in the very long time I've been a member.  The Costco Auto Program you might think would be a program where you buy your car through Costco since you see the cars lined up in your local warehouse.  You'd be wrong.  You might think the Costco Auto Program gets you a pre-negotiated price that is the same for every Costco member in the country.  You would be wrong.  You might think the Costco Auto Program would give you a price you can take into the dealership. You would be wrong.  You might think the Costco Auto Program would cover any car as long as Costco has an agreement with a particular dealership.  You would be wrong. 

The Costco Auto Program simply puts you in touch with a dealer who is in the program and the dealer has worked out a price with Costco.  Great, but you don't know the price until you go visit the dealer.  My first stab at the program was to try to get a price for a 2015 Kia Optima.  I could not find the car on the website. I thought I must be missing something.  Other 2015 Kia's were on the site. 2014 Kia Optimas were on the site.  But, no 2015 Kia Optima. I called the program and was told it was probably too new.  They didn't know when it would be on the site/in the program, just keep checking back. It's normally 30-60 days.  Or so they guessed.  They really didn't seem to know.

I am also considering a 2015 Mazda 6.  I thought I'd try my luck with that car.  I live just outside of Cincinnati, OH and there are many Mazda dealerships fairly close.  I was surprised when the dealership it came back with is in Columbus, OH- about two hours away from me.  I called the program again. They said it was probably because the car is too new. We tried the 2014 Mazda 6. The same dealer came up- Columbus, OH.  I asked if they expected me to drive two hours to get a price on a car.  The agent told me the dealership might give me a price on the car over the phone, but some dealerships require you to come in to get a price.

I was really hoping this program would make buying a car easy.  It certainly hasn't so far.  And, from what I've read the Costco price is pretty good, but not great.  It varies depending on where you are in the country.   I don't like the fact that you go into the dealer not knowing what the price will be.  You'll still need to do your homework because the negotiated prices are reported to be around $500 more than the "best" price a good negotiator can get.  So, while it may be a good price if you don't know how to deal or don't want to deal, you can probably get that price or your own by doing a little research and playing one dealer against another.  I would not recommend just taking the Costco price without seeing if you can do better first.

So, back to the drawing board for me.  I'm using Truecar.com to get a price to start with instead of the Costco price, which I may never know. Truecar.com gives you a certificate with a price on it, so you know what you're dealing with before you go into the dealership.

Sorry Costco, you let me down this time.

12 comments:

  1. Mr. Smith,

    I’m sorry to hear your experience did not go as well as expected. You satisfaction is important to us and we take member feedback seriously. A Member Advocate will be in touch with you soon to walk you through the program and help you find the car you want.

    Thank you.
    DJ with Costco Auto

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  2. I just bought a brand-new 2015 RX350 October, 2014 through Costco program and my price was $250 over the invoice at the dealer. I though that's a pretty good deal for a 2015 car. BTW, all the new 2014 Rx350 were sold out by July, 2014. My experience is that for a popular car, Costco no-hassle pricing is quite good.

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    1. If they sold you the car, you got ripped off. Buying cars is the biggest scam. The invoice prices are notoriously bloated and not real.

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  3. I went through the Costco program for the so-called "no-hassle" bargain price when I bought my Prius. According to other Prius owners that I've met on forums and TrueCar's web site, I paid "average." Lots of people in my area managed to negotiate a better price by $1-2k. So much for getting a deal. I do not plan to use Costco to buy another vehicle again

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    Replies
    1. The Costco car buying program is just a marketing trick to get you in touch with dealers so they can harass you.

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  4. Nancy's entry is a copy from another webdite. A plant?

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  5. Nancy's entry is a copy from another webdite. A plant?

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  6. December 3, 2015. I had two awful experiences at car dealerships that were Costco Authorized. Earnhardt Toyota in Avondale Az and Arrowhead Toyota in Peoria AZ. Let me just start off by saying I wasn't expecting the greatest price ever, but I was expecting the types of savings I have come to expect when I shop at Costco. I went on the Costco Auto website and put in my info and was given the name of a local Honda dealership. I called the Costco auto buying dept up and asked if their was another Honda dealership closer to my work and they resent my information to another dealership. My evening started off with deception and high pressure sales tactics and ended up the same way. The sales/pricing managers at both places forged (i.e. created from scratch and put them on a piece of paper that they titled Costco Pricing" their prices and provided me estimates that were just a few hundred dollars off of MSRP (not Factory Invoice) on 2016 Honda Civic LX models with the additional Honda Sensing upgrade. I took pictures of the printouts from both of these dealerships when these people left the room. Online prices for the exact same cars just down the road at another Honda dealership (non Costco) were starting at around 2-2.5K below MSRP or within $100 above or below of Factor Invoice pricing for the new 2016 Civics. I contacted the COSTCO auto buying team about both incidents and then emailed them the pictures I took and screen shots of the local prices I found online from those other Honda dealers. Haven't heard back from the Costco autobuying team yet. Something else of note was that when I was in the car with the first sales person (who wasn't directly part of the Honda Costco program) he even said the price was going to be just under factory invoice and looked shocked when his sales manager brought out my "special Costco Pricing" which was quite possibly the highest price anyone had ever been quoted who wasn't on a waiting list for a brand new model. I drove down to the 2nd dealership, which was the original Honda dealership Costco had sent my information to, the same night because I was so upset about my first Costco buying experience to see what their price was. I chose not to inform the people at Earnhardt Honda that I had just came from the Arrowhead Honda or what the price I had been given. I was still trying to give the entire Costco Auto Buying experience the benefit of the doubt. I love, love, love Costco 99.99% of the time.... until now. The whole point of the Costco buying experience, according to Costco's auto buying website is that it is a "PREARRANGED PRICING AND AN EXCEPTIONAL AUTO BUYING EXPERIENCE." By the way, the 2nd Honda dealership Earnhardt quoted me an extra $600 below what the Arrowhead Honda had, but informed me that this special pricing was part of a package deal and I would need to buy around $2300 worth of dealer added items to my car (e.g., tinting, something called auto caddy, nitrogen in my tires, clear plastic door guards, dealer installed alarm, etc). I don't want to sound like i'm advertising for the other Honda dealership, but do yourself a favor and pull up all the local online Honda websites until you find one that has actually discounted prices for all their models displayed or try using Autotrader or Carguru online. I've decided that anytime the dealer website says I have to call or come in for special pricing it's a bad deal unless I was planning on pitting dealer against dealer and haggling all day anyways. I'm going to post this comment in a few places and see if I am able to upload the pictures I took as well. p.s. I don't blame the actual salesmen who showed me the cars. In both places they were actually very helpful and knowledgeable. Although I have most been meeting the awful type when I have gone to different dealerships just to look at new competing cars from other Manufacturers in the price range I am in.

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  7. i live in toledo and have been in the market for a lexus nx for several months and attempted to work deals with dealers in toledo, akron, and cleveland with no success because i felt their lowest price was out of line. I remembered the costco program and decided to give it a try. the closest participating dealer is in ann arbor, about 40 minutes away. they called me quickly and within 1 hour i bought the car without ever going to ann arbor. they had the one i wanted in stock and the price i was given immediately was $2527 less than the best i could do on the same car in toledo. it was quick and easy and i did a lot of research and feel after trying to work with 3 other dealerships that i did well on this car purchase using the costco program

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  8. Thanks for informing us about the Costco auto plan. I never knew it’s going to be that troublesome for you. If you had to go through all that trouble anyway, you would be better off just doing the legwork and going to the dealer on your own with all your paperwork in hand. Makes sense what you said for sure.

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  9. I purchased a 2014 Hyundai Elantra from a dealer. While we were working out the paperwork, I mentioned I had a Costco membership and perhaps I should check with them about the car buying deal. The salesman left to speak with his manager and came back and knocked $1,000 off of the price of my car. This was in the Cleveland area

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