Costco is famous for bulk bargains, from groceries to electronics, and even tires. But did you know their offerings extend to automobiles? Since 1989, the Costco Auto Program has been connecting members with dealerships for discounted prices on new and certified pre-owned vehicles. If you’re considering purchasing a used car and are a Costco member, you might be wondering, “Is the Costco used car program good?” This review dives deep into the Costco Auto Program, specifically focusing on its used car options, to help you determine if it’s the right path for your next vehicle purchase.
Understanding the Costco Auto Program for Used Cars
It’s important to clarify upfront: you don’t directly buy a used car from Costco warehouses. Instead, the Costco Auto Program acts as a referral service. They partner with a network of over 3,000 dealerships across the United States and Puerto Rico. These dealerships agree to offer pre-negotiated pricing and special incentives exclusively to Costco members. For used cars, this means accessing the certified pre-owned (CPO) inventories of participating dealerships with member-only benefits.
This program aims to simplify the car buying process, especially for those who dislike haggling. Costco leverages its massive membership base to negotiate favorable terms with dealerships, theoretically passing those savings onto its members. While the program includes new vehicles, the used car aspect, particularly certified pre-owned vehicles, offers a potentially attractive avenue for value-conscious buyers.
How the Costco Used Car Program Works
Navigating the Costco Auto Program for used cars involves a few key steps to unlock member-exclusive deals:
Start Your Search Online
The first step is to visit the official Costco Auto Program website. Enter your zip code and select “Pre-Owned” to begin your search. Unlike new car searches where you might select specific models, used car searches typically browse the inventories of participating dealerships in your area.
You can filter your search by various criteria such as make, model, year, price range, and body style. This allows you to narrow down the selection to used cars that meet your needs and preferences. Spend time exploring the available inventory online to get a sense of what’s offered through the program.
Identify Participating Dealerships
Once you find a used car that interests you online, the Costco Auto Program website will display a list of participating dealerships that have that vehicle or similar models in stock. It’s crucial to understand that you must purchase from these pre-approved dealerships to benefit from Costco member pricing.
Note that the selection of used cars available through the program depends on the current inventory of participating dealers in your region. The program doesn’t guarantee availability of every make and model in the used car market.
Contact the Authorized Dealer Contact
After identifying a dealership with a used car you’re interested in, you’ll need to contact them to schedule an appointment. When you contact the dealership, specifically ask to speak with a Costco Authorized Dealer Contact. These individuals are specially trained and authorized to handle Costco Auto Program members.
Inform them that you are a Costco member and are interested in the Costco Member-Only Price for the used car you found online or a similar vehicle. This will initiate the Costco pricing process.
Review the Costco Member-Only Price Sheet
When you visit the dealership, the Authorized Dealer Contact will provide you with a Costco Member-Only Price Sheet. This sheet details the prearranged price for the used car you are considering. This price is supposed to reflect the discounts and incentives negotiated by Costco.
It’s important to carefully review this price sheet. Understand what is included in the price and if there are any additional fees or charges. While the program aims for a no-haggle experience on the vehicle price itself, be prepared to discuss potential add-ons or financing options separately.
Secure Financing and Finalize the Purchase
Like any used car purchase, you’ll need to arrange financing unless you are paying cash. The Costco Auto Program itself doesn’t provide financing, but dealerships will typically offer financing options. It’s always wise to compare financing offers from multiple sources, including your bank or credit union, to ensure you get the best interest rate.
Once you are satisfied with the price, financing, and the used car itself, you can finalize the purchase through the dealership. Remember to bring your Costco membership card to confirm your eligibility for the program benefits.
Pros and Cons of the Costco Used Car Program
To definitively answer “is the Costco used car program good?”, it’s essential to weigh the advantages and disadvantages:
Pros of the Costco Used Car Program
- Potentially Lower Prices: The primary appeal of the Costco Auto Program is the potential for savings. Costco leverages its bulk buying power to negotiate discounted prices with dealerships. While savings aren’t guaranteed on every vehicle, members often report getting a fair price, especially compared to traditional negotiation.
- Streamlined, No-Haggle Experience: For those who dread car price negotiation, the Costco program offers a more comfortable process. The prearranged pricing aims to remove the stressful back-and-forth often associated with car buying. This can save time and emotional energy.
- Certified Pre-Owned (CPO) Focus: The used car program primarily focuses on certified pre-owned vehicles. CPO cars come with manufacturer-backed warranties and have undergone inspections, offering greater peace of mind compared to standard used cars. This reduces the risk associated with buying a used vehicle.
- Enhanced Customer Service: Costco emphasizes customer service in all its partnerships. Participating dealerships are vetted for customer satisfaction, and Authorized Dealer Contacts are specifically trained to meet Costco’s service standards. If issues arise, Costco’s Member Advocacy Group can provide assistance.
- Time Savings: The program can save time by pre-selecting dealerships and pre-negotiating prices. You spend less time searching for reputable dealers and haggling over price, making the car buying process more efficient.
Cons of the Costco Used Car Program
- Membership Requirement: You must be a Costco member to use the program. If you are not already a member, you’ll need to factor in the annual membership fee ($60 for Gold Star, $120 for Executive). The savings on a used car need to justify this membership cost.
- Limited Dealer Network: While 3,000 dealerships sounds extensive, it’s not every dealership in the country. Your choices are limited to participating dealers, which might restrict the makes, models, and specific used cars available to you in your area.
- No Upfront Used Car Pricing: You cannot see the Costco member price online for used cars before contacting a dealership. You must go through the steps of contacting a dealer and speaking with an Authorized Dealer Contact to get the price sheet. This lack of price transparency upfront can be inconvenient.
- Used Car Inventory Variability: Used car inventory is constantly changing. The specific used car you see online today might be sold tomorrow. The Costco program relies on the participating dealers’ current used car stock, which is inherently variable and may not always match your exact needs.
- Potential for Add-ons and Upselling: While the program aims for no-haggle pricing on the vehicle itself, dealerships may still try to sell you add-ons like extended warranties, service packages, or accessories. Be prepared to politely decline unwanted extras to keep your final cost in check.
Alternatives to the Costco Used Car Program
While the Costco Used Car Program offers benefits, it’s not the only way to buy a used car. Consider these alternatives:
- Independent Negotiation: Negotiating directly with dealerships, without using a program, is always an option. If you are a skilled negotiator or enjoy the process, you might secure a comparable or even better deal on your own. This requires more research and time investment.
- Other Car Buying Services: Companies like TrueCar and AAA (for AAA members) also offer car buying programs with pre-negotiated pricing. TrueCar is free for everyone, while AAA’s program, like Costco’s, requires membership. Comparing these services can help you find the best option.
- Online Used Car Retailers: Websites like Carvana, Vroom, and Shift offer online used car buying experiences with set pricing and home delivery. These platforms can be convenient and transparent, though prices might not always be the absolute lowest.
- Local Used Car Dealerships and Private Sellers: Don’t overlook local used car dealerships and private sellers. Exploring local options can sometimes uncover unique deals or vehicles not available through larger programs. However, private sales come with inherent risks and less consumer protection.
Conclusion: Is the Costco Used Car Program Good for You?
So, “is the Costco used car program good?” The answer is: it depends on your individual needs and preferences.
The Costco Used Car Program is likely a good option if:
- You are already a Costco member and value the membership benefits.
- You dislike haggling and prefer a streamlined, predictable car buying process.
- You are primarily interested in certified pre-owned vehicles for added assurance.
- You value customer service and appreciate the Costco Member Advocacy support.
- You are looking to save time in the car buying process and prefer a more efficient approach.
However, the Costco Used Car Program might not be ideal if:
- You are not a Costco member and are only considering membership for car buying.
- You enjoy negotiation and believe you can get a better deal on your own.
- You have very specific used car requirements that might not be met by participating dealers.
- You need upfront price transparency before contacting dealerships.
- You prefer exploring a wider range of used car sources beyond the Costco network.
Ultimately, the best way to determine if the Costco Used Car Program is “good” for you is to research used car prices in your area, compare them to potential Costco member pricing (by contacting a dealer), and weigh the pros and cons against your car buying style and needs. It’s a valuable tool in your car buying arsenal, especially for Costco members seeking a less stressful and potentially cost-effective way to purchase a used vehicle.
