I’m paranoid about getting scammed.
It’s almost to the point where I don’t even want to answer the phone out of fear I’ll accidentally blurt out my social security number to someone claiming to work at my bank.
When it comes to car buying, my guard goes up like I’m a schizophrenic at a CIA interrogation.
That’s why I was intrigued when I discovered an auto buying program at Costco. The company’s website claims Costco saves members a lot of hassle and an average of $1,000 off a typical transaction price. It works like this:
Members choose the make and model they’re interested in, then Costco refers them to a local dealer who shows the customer the vehicle’s invoice price, the MSRP, and the Costco no-haggle price.
A no-haggle price with built-in savings sounds pretty good on the surface, but still my paranoia wasn’t eased by browsing Costco’s website. Digging a little deeper online, I found a lawsuit filed in January by a New Jersey woman who says the program is deceptive.
Her main accusation, according the paperwork, is:
The Costco auto program is misleading and deceptive because its “members only” price is exclusively defined in reference to the “invoice price” of authorized dealers. The Costco auto program does not control the underlying invoice price, and its participating dealers can and do manipulate that price in any number of ways.
A-ha! I knew there had to be something. Everyone knows dealers try to squeeze every ounce of cash they can out of people, so if there’s a price they’ll immediately accept, they must have a good amount of profit built in. Still, I trust Costco….
So I decided to put its auto buying program to the test.
While I was shopping to replace my wife’s car a few weeks back, we looked at getting a 2009 Honda CR-V EX AWD. It was black with a window sticker price of $25,635. We got pretty far into the negotiations before they broke down over the value of our trade-in. The purchase price we arrived at: $23,600.
With this in mind, I contacted the Costco Auto Program with no intent of buying, but to research this story. I wanted to see how close their offer was to the price I negotiated myself. I filled out the online form and waited 24 hours. They never called. So I called the “specially trained” Costco-approved salesman I was referred to and asked what my price would be.
He asked me to come in and see the car. I told him I’d seen it already and just wanted to know the Costco price. I eventually convinced him I wouldn’t come in unless I knew the price was acceptable.
Then he told me: $23,900.
I admit, I was impressed. I came to the conclusion that programs like Costco’s just might be worth it if you’re the kind of person who cowers at confrontation and despises negotiation. The deal, at least in this case, wasn’t too bad!
If you’re a negotiation pit bull, though, go after ‘em, and take every hundred you can get!
Would you consider, or have you used, something like Costco’s auto buying program?
-tgriffith
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Your phone rings. You answer only to hear a computerized robot voice telling you that your auto warranty is about to expire and you need to extend your coverage. 
