I recently bought a new car because my previous vehicle was totaled in a car accident last year (it was the other driver’s fault). My wife and I checked out various cars at the dealerships. When we decided on a Toyota Rav4, we signed up for the Costco Auto Program. It’s a free service that makes it easy for members to get a low price on new and used cars. All you have to do is go online, select the vehicle you want, and then fill out a short web form. Then a dealer will contact you and provide you with the exclusive prearranged Costco member price for the vehicle you choose. The price we got was over $2000 less than the MSRP (including destination fee). However, we found the same model advertised online at another dealership for about $1300 less than Costco’s price.
The Costco Auto Program offers prearranged prices so you don’t have to haggle at the dealership. I hate haggling. That’s the reason I was interested in Costco’s auto program. Fortunately for me, I found an even better price online without having to haggle.
Does this mean Costco’s auto program is a waste time? I don’t think so. First, the service is free and I don’t think it hurts to find out what Costco’s prearranged price is. If it saves you enough money and you don’t want to drag out the process, then buy the car through Costco. If you want to save more, you can always use their price as your ceiling price for the car and look around for a better deal.
The fact that I found the same car cheaper elsewhere doesn’t necessarily mean you will too. Keep in mind that your experience will vary with the model you are interested in, the area you live in, and inventory level.
I also want to mention you can’t select the dealership through Costco’s auto program. Costco will match you up with an authorized dealer in their program. Not all dealers are in their program. I’m guessing it’s because Costco charges dealers to be included in their auto program. In my case, Costco matched me up with a dealership far away (40 minutes without traffic). The dealer with the lower price was much closer (less than 20 minutes away).
Some numbers for you to look at:
Toyota Rav4 XLE AWD
- MSRP: $26,640
- Invoice: $24,908
- Destination fee: $900
- Total MSRP price: $27,540
- Total invoice: $25,808
Authorized Costco Dealer
- Costco price: $25,624 after rebates (includes registration and titling fees)
- Car price: $25,276 without $348 registration and titling fees
- Save $2264 off total MSRP
- Save $532 off total invoice
- $1316 more than competitor’s price
- Advertised online price: $23,960
- Save $3580 off total MSRP
- Save $1848 off total invoice
- Save $1316 off Costco price