Is buying car through CostCo, Sam's, or BJ's Club a good option?

[KEW]

I'm going to get a new car in the next year or two and was wondering if anyone has had good (or bad) experiences buying through these agencies.
Thanks!

 

[BoredSysAdmin]

I've called through Costco Auto deal to a local dealer when I was looking for used Infiniti. Neither initially offered deal was particularly good [ie: exact same as one published on their side]. I had to mention specifically it was a Costco Auto referral, which got me a whopping 2% discount. Hurray /s

Short version: Costco Auto is just a simple referral system. Nothing magical or great about it.
Some of my best deals were hard haggling directly with dealers (if they sweat and call back once you start to head out of the door - you are close to a decent deal) or dealing with a leasing broker company - they don't BS around.
The drawback is actually more paperwork and no free maintenance deals from the dealer.

Goes without saying: Shop around. Get a deal with 1st dealer [choose one with worst reviews] - and ask 2nd/3rd/4th dealer to beat the last price. You'll know once you hit the bottom.

 

[GrimSurfer]

Yeah, I'd haggle direct. Spend time to understand how much inventory the dealer is moving, and when. It will also tell you if there's something on the lot that meets your requirements (better leverage, though don't let them know that right away. Let them feel they're winning as they waste time and energy to incentivize you to consider this option).

Go shopping with financing in place at the end of the month/end of quarter... it's when dealers are most eager to deal to reach manufacturer quotas. Play good cop/bad cop with wife or partner.

Most sales staff will talk to the guy. As things get close, say you're not the one buying. That will force them to switch to the bad cop (wife or partner) to close the deal.

It's all about maintaining a psychological edge... unless you're buying a car that is a red hot seller. Then you're hooped!

Good hunting KEW. From what I've seen here, you're great with people. This will definitely help...

 

[everettT]

If you have American Express platinum or are member of USAA, their car purchasing services are stellar.

 

[highfigh]

"I'll tell you what- I'm gonna throw in free undercoating".

 

[TankTop5]

I’ll give you a hint, the only person in the dealership who really cares about the price is the customer and if you negotiate only on price you’ve already lost.

https://www.coxautoinc.com scroll to the bottom and look at the companies they own.

KBB - where you check vehicle values

Cars.com - where you search for cars

Autotrader - another place to look for cars

Dealertrack - dealership software

Vinsolutions - dealership software

Dealer.com - majority of dealership website host

Manheim - dealership auction for most of America

Dealer-auction.com -the other major dealer auction

Vauto - dealer used car pricing tool


Then there’s TrueCar, the company that almost every third party company uses to manage their employee or group discount program. Companies that use them, USAA, AAA, Costco, Sams and thousands of other companies. The pricing you get from these companies is actually set by the individual dealership and each dealership can see how all the other dealerships in their area are pricing their cars as well (Vauto does this as well but isn’t a consumer tool). All of these companies are in some way owned by someone with interest in selling cars but ultimately pricing is still market based.

The funny thing is the only reason the dealership cares about pricing (ignoring small dealers and rural dealers) is to increase sales volumes. The majority of profit for the a dealer comes from factory sales incentives (salesmen generally know nothing about this money) and the finance department. I can’t talk about factory incentive. The finance department is really the profit center for a dealership and there’s no secrets there either, luckily for the dealer America is primarily made up of C and D students who most likely only passed math class because the teacher felt sorry for them.




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[Phase 2]

Never use dealer finance.

 

[CB22]

I'm going to get a new car in the next year or two and was wondering if anyone has had good (or bad) experiences buying through these agencies.
Thanks!

Check out this website called "Carvana." They have some very good deals and you can getter a better interest rate if you get a 3rd party loan. That's where I plan on buying my "new/ used" Passat or Silverado when the engine on my Avalanche goes out.

https://www.carvana.com/

 

[KEW]

I've called through Costco Auto deal to a local dealer when I was looking for used Infiniti. Neither initially offered deal was particularly good [ie: exact same as one published on their side]. I had to mention specifically it was a Costco Auto referral, which got me a whopping 2% discount. Hurray /s

Short version: Costco Auto is just a simple referral system. Nothing magical or great about it.
Some of my best deals were hard haggling directly with dealers (if they sweat and call back once you start to head out of the door - you are close to a decent deal) or dealing with a leasing broker company - they don't BS around.
The drawback is actually more paperwork and no free maintenance deals from the dealer.

Goes without saying: Shop around. Get a deal with 1st dealer [choose one with worst reviews] - and ask 2nd/3rd/4th dealer to beat the last price. You'll know once you hit the bottom.

Used car buying makes every deal unique.
I was thinking these wholesale clubs might negotiate a standard deal - like employee pricing +3% (I don't even know if that is a good price, I guess it depends which car company), but that would require buying a new car to lock in on established standard pricing.

 

[KEW]

Another prospect is my daughter is going to work for the summer at the Lexus regional HQ in Alpharetta, GA.
I don't know if they give an employee discount or not, but if anyone knows, let me know!

Also does anyone know if any discount would include Toyotas? Not sure how much they separate operations between Lexus and Toyota.

PS: This is a summer internship for my daughter who is majoring in advertising, so she probably won't have access to discounts until she graduates if/when she goes to work full time for them. I'm not in a rush, so can wait if that looks like it will pan out!

 

[TankTop5]

Another prospect is my daughter is going to work for the summer at the Lexus regional HQ in Alpharetta, GA.
I don't know if they give an employee discount or not, but if anyone knows, let me know!

Also does anyone know if any discount would include Toyotas? Not sure how much they separate operations between Lexus and Toyota.

PS: This is a summer internship for my daughter who is majoring in advertising, so she probably won't have access to discounts until she graduates if/when she goes to work full time for them. I'm not in a rush, so can wait if that looks like it will pan out!

That’s a great opportunity for your daughter! Yes there’s great employee pricing, not sure if it extends through an internship. Toyota’s culture is very relational and even a hint of knowing someone at the corporate level can get great deals and financing she may not otherwise qualify for.


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[CB22]

Used car buying makes every deal unique.

Yep and you save a lot of $ on dealer markup. Check out a car with 15-30k and it's just about the same as buying new with some significant savings.

 

[mtrycrafts]

If you are a member of CU, ask them what the price should be; not expensive to ask. They would know all incentives, etc.
then you can bargain with the dealer. Be prepared to walk away; don't fall in love with a car.

 

[Kvn_Walker]

Never use dealer finance.

There's an exception to this, which has made me a few hundred dollars' free money over the past years. My credit union deposits a 1% "conquest loan" payment into my savings whenever I refinance a car with them. So the last several cars I've bought, I purposely financed through whomever the dealership offered. But once I got my payment book, I made the first payment then refinanced with my CU and got paid.

Now this only works for me because I buy used and negotiate the prices at or below book value, since they won't refi a car that's upside down. But it's a nice perk, and their used car APR is always close to the lowest I can get.

 

[everettT]

Yep and you save a lot of $ on dealer markup. Check out a car with 15-30k and it's just about the same as buying new with some significant savings.

And oddly enough dealers make more on a used car. Sales staff makes less than $100 on almost every new car in the under 40k range .

 

[TankTop5]

And oddly enough dealers make more on a used car. Sales staff makes less than $100 on almost every new car in the under 40k range .

Close. Most pay plans are $100 or $200 minimum commission. Pay plans used to incentivize large front end profit but now are more geared to volume. The reason for this is nationally, front end profit is about $400 and back end profit is about $1700.


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[Midwesthonky]

We bought a car last fall and looked at it two ways. I did go through Costco and talked with that dealer. The car was a hot item and the dealers couldn't keep them in stock. We ended up not using the Costco price not not he Costco dealer and ended up with a final price lower than the Costco. These were Subaru dealers and they knew with the internet and such that pricing information was available. If they didn't sell to us, we'd just buy from someone else. So they didn't fight, said here is the price, it was below Costco and below dealer cost (incentives allowed them to do this). So it worked out for everyone. They sold a car before it was on the lot and we got a price we were happy with.

So my opinion? It doesn't hurt to look at the program. But do your homework so you know how good the price is. If there are several dealerships in the area for the same brand, go ahead talk to the ones that are not Costco and mention the Costco price. That tells them you are interested but not tied down to that specific dealer. You also just told them that they have to deal right away or you are walking. It can be nice leverage for getting a nice deal.

 

[mtrycrafts]

As midwest said, be able to walk away.

 

[KEW]

Thanks for the comments. I am looking at he Kia Nero EV which will be out very soon. It is (I believe) going to be a high demand car, so I may wait a few months for things to settle out, or maybe Toyota or Lexus will announce plans for an EV that my daughter can get at a discount in the next year or two (though it seems they are pursuing Hydrogen vehicles)!
Happily, there is no rush as my old car still works well enough.
I'm not committed to the Nero EV, if something else checks the boxes:
1) Prefer an EV, but a plug-in hybrid would be acceptable.
2) Taller than a sedan (to be able to read traffic)
3) 0-60 in around 8 seconds or less (not a high bar, I don't need fast, but I don't want a vehicle that feels slow)
4) Will fit my Bari Sax in the back (~44" long). My current Chevy Sonic won't so I have to put it in the back seat where it is easily visible - I'm not sure how tempting an instrument case is to a thief, but I know it'd cost me more to replace the sax than what I paid for the Sonic new!
5) If EV, the range needs to be comfortably and consistently over 150 miles between charges (the Nero is 230mi).

I would also consider a plug-in Chevy Volt if they run killer deals since they are discontinuing the model, but I don't know if demand vs production levels will result in an exceptional deal or not. It violates rule #2, but if the deal is good enough.

 

[BoredSysAdmin]

Jag I-Pace. You only live once