logo
Should You Buy A Car Through Costco? Here's What The Auto Program Actually Offers

Should You Buy A Car Through Costco? Here's What The Auto Program Actually Offers

Yahoo21-07-2025
Americans have a serious love affair with Costco. It's the third-largest retailer on the planet behind Walmart and Amazon, according to a 2024 report from Statista. Where else can you buy a $5 rotisserie chicken alongside items like a one-ounce gold bar, a 72-pound wheel of parmesan cheese, or a cheap, but rather attractive funeral casket for your dearly departed?
Costco sells products for your car, too, like discounted tires, batteries, and the company's signature Kirkland brand motor oil. But did you know that you can purchase an entire car from the discount warehouse club? Well, sort of. Since 1989, the Costco Auto Program has been available to purportedly score club members a great deal on new or even used cars.
To be clear, you're not actually buying a vehicle through Costco, but instead, through one of its network of approximately 3,000 dealerships, which have been vetted and specially trained to interact with Costco customers.
Read more: These Are What You Wanted As First Cars (And What You Got Instead)
Prices Are Pre-Negotiated
Like most car-buying experiences nowadays, the process of buying a car using Costco's connections begins on the Auto Program's website. Once a suitable vehicle has been identified, a pre-negotiated price can be obtained from participating dealerships. That price potentially includes exclusive discounts that are only available to Costco members due to the high volume of business that the warehouse club funnels to car manufacturers and dealerships. Obviously, the allure of this system is that car buyers receive a lower price than the general public without the need to haggle.
If Costco discovers that a dealership inflates the price or added mandatory fees that vary from its price agreement, it can be barred from participating in the program. Note that while Costco's website does provide advice and calculators to figure out monthly payments and how much car you can afford to purchase, it doesn't actually offer financing. Auto loan rates are relatively high as of this writing, but dealers are free to hike those rates even more for additional revenue, which is a profit point that's outside of Costco's jurisdiction.
As with any financed car purchase, shoppers are well advised to do some research ahead of time as to what type of interest rates and terms are available through local banks and credit unions, as well as online. That way, buyers can confirm that the loan terms offered by the dealership's finance department are fair.
Salespeople Are Held To A High Standard
An additional grey area of Costco's Auto Program exists if the buyer has a vehicle to trade in against their new car. Like obtaining financing, the trade-in value won't be discovered until the Costco member visits or speaks with the salesperson further along in the car-buying process. It'll pay to get quotes from sources like CarMax, Carvana, and others to make sure that a fair trade-in value is being proffered. By this point, it should be clear that buying a car using Costco's system isn't quite as easy as visiting a website and completing the process online.
You'll definitely interact with a salesperson, which the warehouse club calls "Authorized Dealer Contacts." Not just any salesperson is qualified to transact with Costco members, either. They're required to have been employed at the dealership for a minimum of six months and maintain high customer satisfaction scores. Reportedly, Costco occasionally deploys its employees posing as car buyers to make sure that these high standards are being met.
As a whole, the dealerships that Costco accepts to participate in its car-buying program are held to similarly high standards as its salespeople. For example, Costco typically only works with a single well-vetted dealership for each brand in the geographical area of its warehouse stores. That's regardless of whether there are other competing dealers nearby. Moreover, Costco has been known to leverage the purchasing power of its large membership base to negotiate favorable outcomes for its customers in the event that a dispute arises with participating dealerships, even after purchase.
Aggressive Negotiators Can Do Better
So now that you know the benefits, is it worth purchasing a vehicle using Costco's Auto Program? To begin, you'll need a Costco membership card at a cost of $65 per year, and shockingly, it's not even accepted by the TSA as valid ID. Beyond that, we think it comes down to how much time you're able to dedicate to research, as well as your personal comfort level and experience when it comes to haggling.
Costco uses its considerable largess to negotiate discounts with local car dealerships for its members. Additionally, it ensures that the dealership employees who interact with its members are of a high caliber. That said, there are still some aspects of the process that are open to the conventional pitfalls of car buying, like obtaining a loan at a favorable interest rate and getting a decent trade-in value for your old vehicle. So while Costco makes it easier for anybody to get a decent deal, some of the legwork required for scoring a great deal will still be necessary.
To be sure, seasoned car buyers who don't mind a possible confrontation and who value money more than some extra time spent can likely beat a Costco deal by working the phone, email, and text messages to correspond with a larger number of dealerships. Likewise, those folks will enjoy a wider selection of vehicles from multiple area dealerships, not just one. Even if that means engaging with the occasional quintessential shady salesperson.
Want more like this? Join the Jalopnik newsletter to get the latest auto news sent straight to your inbox...
Read the original article on Jalopnik.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

How The J. M. Smucker Company (SJM) Fits into the Food Dividend Stock Portfolio
How The J. M. Smucker Company (SJM) Fits into the Food Dividend Stock Portfolio

Yahoo

time21 minutes ago

  • Yahoo

How The J. M. Smucker Company (SJM) Fits into the Food Dividend Stock Portfolio

The J. M. Smucker Company (NYSE:SJM) is included among the 10 Best Food Stocks with Dividends. A wholesaler distributing peanut butter, fruit spreads and specialty spreads to a retailer. The J. M. Smucker Company (NYSE:SJM) is recognized as a strong value in the food sector, with several successful brands under its belt. Notable performers include pet food lines like Meow Mix and Milk-Bone, as well as the well-liked Uncrustables sandwich products. The company paid a premium when it acquired Hostess Brands in November 2023. To refocus its efforts, the company recently sold off some brands from its Sweet Baked Snack segment, including Voortman, to concentrate more on the Hostess portfolio. Although the transition has been challenging, The J. M. Smucker Company (NYSE:SJM) appears to be moving in the right direction. It anticipates full-year fiscal 2026 sales to grow by 2% to 4%, despite the effects of divesting certain Sweet Baked Snack value brands. The company is also expected to deliver strong earnings and free cash flow. In fiscal Q4 2025, The J. M. Smucker Company (NYSE:SJM) reported operating cash flow of $393.9 million, and its free cash flow was $298.9 million. During the quarter, the company returned $114.5 million to shareholders through dividends, reinforcing its commitment to investor return. This cash position enables the company to consistently raise its dividends. The J. M. Smucker Company (NYSE:SJM) declared a 1.9% hike in its quarterly dividend on July 16. This marked the company's 24th consecutive year of dividend growth, which makes it one of the best food stocks with dividends. The company now offers a quarterly dividend of $1.10 per share and has a dividend yield of 4.04%, as of July 27. While we acknowledge the potential of SJM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: READ NEXT: and Disclosure: None.

Why Flowers Foods (FLO) is a Top Food Stock for Dividend Investors
Why Flowers Foods (FLO) is a Top Food Stock for Dividend Investors

Yahoo

time21 minutes ago

  • Yahoo

Why Flowers Foods (FLO) is a Top Food Stock for Dividend Investors

Flowers Foods, Inc. (NYSE:FLO) is included among the 10 Best Food Stocks with Dividends. A female baker in a spotless kitchen carefully decorating a cake. Flowers Foods, Inc. (NYSE:FLO) is an American company that manufactures a range of bakery products for both retail and foodservice markets nationwide. Its offerings include items like fresh bread, buns, rolls, snack cakes, and tortillas. The company supplies these products to grocery stores, convenience outlets, and restaurants. Among its most recognized brands are Nature's Own, Whitewheat, Cobblestone Bread, Wonder, Dave's Killer Bread, Canyon Bakehouse, Mrs. Freshley's, and Tastykake. Flowers Foods, Inc. (NYSE:FLO) has a strong cash position. In the most recent quarter, the company generated $135.6 million in operating cash flow, which grew by $30.5 million. The company also remained committed to its shareholder obligation, returning $52.3 million through dividends during the quarter, up $1.2 million from the previous quarter. Flowers Foods, Inc. (NYSE:FLO) currently offers a quarterly dividend of $0.2475 per share, having raised it by 3.1% in May. This was the company's 23rd consecutive year of dividend growth, which makes it one of the best food stocks with dividends. In addition, it has paid regular dividends to shareholders for 91 quarters in a row. The stock has a dividend yield of 6.09%, as of July 27. While we acknowledge the potential of FLO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: READ NEXT: and Disclosure: None.

Analyzing Hormel Foods Corporation (HRL): A Reliable Food Dividend Stock
Analyzing Hormel Foods Corporation (HRL): A Reliable Food Dividend Stock

Yahoo

time21 minutes ago

  • Yahoo

Analyzing Hormel Foods Corporation (HRL): A Reliable Food Dividend Stock

Hormel Foods Corporation (NYSE:HRL) is included among the 10 Best Food Stocks with Dividends. A close-up of a hand cutting fresh turkeys, revealing the perishable products of the company. The company is facing several challenges, including rising costs, avian flu, a slow recovery in China, and early issues with its Planters acquisition. While none of these are likely to harm the business long-term, their combined effect is significant. To address this, Hormel is focusing on product innovation, improving efficiency, and revamping its leadership. Backed by The Hormel Foundation, which supports the company's long-term success, the new management team is well-positioned to guide it through these headwinds. Hormel Foods Corporation (NYSE:HRL) reported strong earnings in fiscal Q2 2025. The company's revenue came in at $2.9 billion, which showed a 0.4% growth on a YoY basis. It reported operating income of $248 million, with adjusted operating income reaching $265 million. Management expressed optimism for strong growth in the second half of the year, driven by a portfolio centered on consumer-focused, protein-rich products. They highlighted expected gains from the turkey segment, continued progress with the Planters brand, strength in key market-leading categories, and ongoing advantages stemming from the Transform and Modernize (T&M) initiative. Hormel Foods Corporation (NYSE:HRL) ended the quarter with nearly $670 million in cash and cash equivalents. The company generated an operating cash flow of $56 million. It currently offers a quarterly dividend of $0.29 per share and has a dividend yield of 3.97%. HRL is a Dividend King with 59 consecutive years of dividend growth under its belt. While we acknowledge the potential of HRL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: READ NEXT: and Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store