Costco auto buying service

[SCBillandJane]

I was exploring replacing my TV, and decided to try Costco since they advertise that they can get you a better deal without a hassle. In my book ,going to a car dealer is right up there with a root canal at the dentist. I followed the steps and was assured that a $3000 discount on a $33,000 vehicle was their best price. I decided to do an internet search to the dealer where I purchased my last truck. Wow, they offered a $4,000 discount on the same vehicle, and they didn't ask where you were a member. I went to complain at my local Costco. A supervisor said to me that Costco had only had a store here for 7 years and that was too little time to expect Costco to know who was a good dealer. I just thought I would ask if anyone had a great buying experience with one of these buying services?

 

[oldstick-TMO]

Don't have any direct experience with cars buyers services but have heard of a lot of folks relating similar experiences to yours.

I figure they are mostly a convenience gimmick for both buyer and dealer. Same with the various bank and credit union buyers services. Wouldn't surprise me at all if Costco receives that extra $1000 as a commision if you had purchased through them.

 

[Redtail cruiser]

There are several of online sites that will give you a quote on what fair pricing is on any vehicle. It is a good idea to compare all of them to get a good sense of what's what. I have used autobytel.com, truecar.com and Kelly blue book; however there are more. They will give you a good number to start negotiations with.

 

[Bill]

I've found that one of the best negotiating tools is patience, along with feigned reluctance. Example: When we were shopping for our new F-150 (The Moose!), we had spent a couple hours with each of several dealers in the area, so we knew exactly what we wanted, and about what we could get it for. When we reached the last (biggest, best) dealer, we actually spent two days haggling with a very pleasant young salesman. At the end, I just kept shaking my head and saying "I'm just not sure we can swing it", and making motions like getting up and leaving. At that point, an older salesman walked up, introduced hmself, and asked "Are you the folks that came here in the Ranger?" (We had indeed driven my beat-up '98 Ranger.) I assured him that we were, told him how much we liked the Ranger, and how much we really wanted another Ford. He turned to the original salesman and said "Did you tell them about the Ranger Owners Loyalty Rebate?" The first salesman looked confused for a moment, then said "Why, no, I forgot about that! Let's see, it is $1500, isn't it?" The older salesman wandered away - and we closed the deal.

A search of the Internet reveals no such rebate.

Bill

 

[oldstick-TMO]

I've found that one of the best negotiating tools is patience, along with feigned reluctance.
Bill

Exactly my opinion too. Except in my case, I don't fake it, I always get up and leave politely at least on the first visit to a dealer. I pretend I haven't done any research yet, even if I have. "I'm not sure about this, I need to do some more looking around and look up the book values, yada yada." They almost fall over themselves trying to get you to stay, "We'll show you the value right here on our computer... etc." But they will normally call you within a day or two wanting to talk seriously. I will not go back however until they commit over the phone to a price acceptable to me.

But I will never even step into the office for a price quote period, unless I have found one that has the features I need AND I think there might be a chance of getting it into my price range. I excuse myself from the dealership before that point if none suit my fancy. Of course online research of their inventories can speed this weeding process nowadays.

 

[Padgett]

Are a lot of gimmicks dealers use but for a buyer TruCar is a good resource as to the actual value of a new car.

Best is to have no trade.

Three things a dealer uses for making a profit do not appear on web sites:
I) an inflated "document fee" or "service charge" which can be anywhere from $199 to $999 they claim is part of every contract. Need to look at every line item on the contract.

2) Another favoite on a popular (or not so) vehicle is the "two sticker two step" where the dealer adds a second sticker with things like a "market adjustment" charge. I just ignore those.

3) a 2-3% "holdback" the dealer receives from the manufacturer quarterly. That won't show up anywhere.

 

[eddugo]

If you are in Florida, I found Bill Jarrett Ford in Sebring to be the best place to buy a vehicle. They sell wholesale to everybody. SAles people are on salary - no pressure. Every once in a while they have a leader item with huge savings. I lucked out in 2011 and got a new 40K F-150 for 28K. Other deals are not quite that good, but still great deals. They do not advertise except web site and word of mouth.

 

[wbmiller3]

My uncle was a Ford executive and his widow kept some kind of employee discount plan. In the process of buying the Expedition, we attempted to use this discount to order a vehicle through one of the local dealers. While this was going on, the internet sales manager from the dealership called us and offered us the truck we ended up buying for less than the employee discount. It had the exact features we wanted. It had been used as a courtesy car at the Houston Livestock Show and Rodeo and had about 500 miles on it. I am still not sure how this all played out except maybe that was too many miles to be considered new? Anyway, it worked out great for us and we still have the truck 11 years later. Our goal is keeping it to 200K miles.

 

[Padgett]

Most automakers have "supplier's discounts" and these days AAA uses TrueCar which is as good as anything.

I used to have a "Class A" discount with GM which is similar to the one mentioned and later bought a 1990 Bonneville on the 500 mile rule (was driven for a week by a zone rep). Major discounts.

 

[LoveToCamp-TMO]

If one just dislikes the process of buying a car, then the buying services are okay. Just don't expect to get the best-possible price, as you are paying for a service.

For those of us who like the game of negotiation, we have the opportunity to make the best deal possible, as evidenced by some of the situations outlined above. Keep in mind that dealerships have different reasons for making deals. A demo car or a program car can be had with a few miles, but much-lower price. Sometimes, though, some program cars can't be sold as "new", so be aware.

Also, maybe a dealership has made enough profit on other car sales that month, but they still need to move a couple more cars to hit their target in "sold unit" number. They may sell it at less than invoice, knowing they still have the holdback. Or, maybe they are willing to lose the holdback, just to sell another vehicle. There may be a cash incentive for them to sell 100 cars this month, and they will take that, instead of a profit on your sale.

The more you work at a deal, the better the price, to a point. You will reach a point where they can't go lower, but you never know where that point is. Same car, different time of month, different price. With a buying service, it is a set price, no matter the day of the month. You get the best deal in-person, most of the time, depending on your negotiating skills. It is not for everyone, though.

 

[Wingedryder]

If one just dislikes the process of buying a car, then the buying services are okay. Just don't expect to get the best-possible price, as you are paying for a service.

For those of us who like the game of negotiation, we have the opportunity to make the best deal possible, as evidenced by some of the situations outlined above. Keep in mind that dealerships have different reasons for making deals. A demo car or a program car can be had with a few miles, but much-lower price. Sometimes, though, some program cars can't be sold as "new", so be aware.

Also, maybe a dealership has made enough profit on other car sales that month, but they still need to move a couple more cars to hit their target in "sold unit" number. They may sell it at less than invoice, knowing they still have the holdback. Or, maybe they are willing to lose the holdback, just to sell another vehicle. There may be a cash incentive for them to sell 100 cars this month, and they will take that, instead of a profit on your sale.

The more you work at a deal, the better the price, to a point. You will reach a point where they can't go lower, but you never know where that point is. Same car, different time of month, different price. With a buying service, it is a set price, no matter the day of the month. You get the best deal in-person, most of the time, depending on your negotiating skills. It is not for everyone, though.

Right on there LTC - as you mentioned, many factors determine the lowest price a dealer is willing to accept at a given time. Other variable are the negotiating skills, patience, and resolve of the buyer. I've been on both sides of the buyer/seller equation most of my life and just recently played the 'wait 'em out' game as a buyer on a new TV - fun, but can be exhausting & test the nerves of some!

 

[Padgett]

I agre, buying a car from a dealer is a traumatic experience and the salesmen are trained predators.

Am now trying to help a friend who lives about 200 miles away through the process. Nice thing about AAA is that it will list dealers, people to contact for their program, and most of the fees. Have to remember that "what the large print giveth the small print taketh away" and in tiny print at the bottom of each listing are things like "document fee $100, dealer fee: $649...) At least with AAA those fees are listed. And then there is TTT - tax, title, and tag which can run quite a bit more. The best thing is that it can give a feeling for what dealers are motivated and which are not.

 

[Redtail cruiser]

There is another way to possibly get a better deal when purchasing a new vehicle. If you happen to work for a company that purchases vehicles for their business use, you can sometimes add a vehicle to that order and get a fleet discount.

My sister purchased a new Ford Fusion through the college she teaches at and bought it for $3,000 less than she could negotiate for at her local dealer.

 

[oldstick-TMO]

I 'd rather have root canals or surgery than deal with new or used car dealers. So when it comes to used cars, fortunately the area I live is a very active market for new and used cars, so there are usually a lot of very good used vehicles for sale by owner and I usually find those a lot easier to deal with.

 

[Padgett]

Agree though a root canal is not that bad any more. What I enjoy is watching a dealer add in a $699 "dealer fee", $105 "documentation fee" and then charge sales tax on both.

 

[LoveToCamp-TMO]

Okay, Padgett. Sales people are not "trained predators". Some may behave that way, but I would not want them as friends, as they are likely that way away from the dealership, also. I used to sell cars, and know many good people who sell cars. Most want to assist you in buying a vehicle that will meet your needs, if the buyer will be open about what those needs are.

I have seen more buyers lie than salesmen. Have had people drive up, park down the street, then tell us they rode the bus to the dealership. Many more stories, but suffice it to say, if the buyer is straightforward, most salesmen will be, also. It takes two parties communicating openly and honestly for a deal to go smoothly. If one side hedges, the deal is sour.

Please don't paint all salespeople as scum. It is not accurate.

 

[Redtail cruiser]

I agree, LTC, most sales people are helpful and friendly, but like in every profession, there are bad apples that seem to get all the press.

Padgett was wrong in his broad characterization of salesmen. I'm sure there are "predator" (bad) engineer/analysts too.

 

[Padgett]

OK I agree that buyers are probably worse but are you saying that salespersons are not trained in making a sale ? Trained in how to upsell things that are neither needed nor wanted ? (could sell an icebox to an eskimo - that always bothered me). Nothing wrong with a predator, just may have traits you need to recognise liike prevarication.

I've bought new cars in the past and have been amazed at the antics (like signing a contract that comes back with another $1000 added on. Maybe I just have had interesting experiences but have a hard time seeing a "market adjustment" or a "dealer fee" as anything other than "extra profit".

The best experiences I have had were as a class A buyer or buying from a specific salesman recommended by a friend. I do expect the dealer to make a profit (and of course no-one ever mentions the holdback) but also do my homework first, have never traded a car in, and generally have a plate in hand (Florida thing but was worth about $300 the last time). Must admit I often ask questions that I already know the answer to see what kind of answer I get.

 

[B_and_D]

I found our Prius on Craigslist. One of the salespeople at Magnussen Toyota put some ads on Craigslist at a deeply discounted price for the prior years new models. They do the volume, and need to move the cars. Only thing that we found bad was having to wait several hours to complete the sale due to one of the finance guys being on vacation.

We bought ours for less than what it would have cost for a used model. It was out of town for us but our local dealer was able to give use the Prius Care package which offered no maintenance charges for the first year or so, depending on how much you drive.

Best buying experience we've ever had.

We tried Costco but the guys in Monterey were really squirrely. They wouldn't give us anything in writing and kept telling us that gas prices were going up and that we needed to buy right away because the car prices were going up too.

It helps to go to a high volume dealer.

 

[oldstick-TMO]

I agree it's best to be honest and forthright with a salesman. And the better experiences I have had were with the smaller locally owned places. Sometimes you get the advantage of large inventory and high volume at the huge places that have dealerships in multiple states, but I tend to run into the more "sneaky" types of sale people at those as well.

I am always straightforward, "I know you have to make some money and at the same time I have get the best deal possible for my family's finances so I am going to shop around." Then, as others pointed out, how good the deal is often depends on the vehicle, the time of month/year and a lot of other factors.