If you don't use Costco Buyers Program, you are leaving $$ on the table

congrats! thanks for the info. when do you pick it up?

 

can't blame you. i got mine in april, and that was perfect timing.

 

I am a Costco member so I just went to the site and checked it out. I'm in Southern Calfornia, in case that matters. I priced out a 2016 Four Touring with CX convenience package and Preferred Accessory Package. Came out to $30,519. MSRP is $32,765, invoice is $29,604. That's $915 over invoice. I think that's decent.

The crazy thing to me is this: the dealer Costco paired me with is Crown Toyota in Ontario, CA. They advertise as a "One Price" dealer. Their "one price" for this exact vehicle, which I test drove tonight, is $31,371.

So, what I'm trying to understand is how this "one price" (meaning no haggling) dealer is going to honor Costco's price that is $852 less than theirs. Is the dealer obligated to honor the Costco price?

 

If you're in SoCal you should contact Dianne at Carson Toyota, well worth the drive for a much better price and dealer experience.

 

Already emailed her. Thank you nonetheless. I'm just waiting for her quote. I'm interested to see what numbers she sends back.

 

Seems it's a case of 'one price' for each channel and customer....

Textbook Discriminant Pricing 101...

 

I guess so. During the test drive, I asked the salesman about the pricing. I asked if I got a better quote from someone else, would they beat it? "You won't get a better price." I said I went to TrueCar and saw lower prices and got quotes from those dealers that were lower. "But they change the prices when you get into the dealership." Well, I said, that's when I get up and leave and come back here, I guess.

So, his insistence that they never ever change their price seemed believable until I got I did the Costco thing.

I got an email from the dealer this morning in regards to the Costco program, but no quote yet. She said she needed more information about the model I wanted. If people are interested, I'd be happy to post here what I find.

 

Only if they want to stay in Costco's program.

I did better than Costco by going back to the same salesman from which I bought my previous car of the same brand, more than a decade earlier. He is now one of the senior fleet guys. All my previous salesguys were gone in less than a year, a fact I learn when the new guy sends a greeting message to his predecesors's contact list.
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I've had a few developments. The dealer invoice I got from Crown lists a "reserve" of $685 and wholesale financial reserve of $317. That is about 3.5% of MSRP and I figured that must be the holdback. They claimed they were charging me $300 over invoice. But, they weren't subtracting the holdback. They also wanted to add in the Toyota Dealer Advertising fee. I also pointed out that their "sale" price was less than my "Costco price." So, he said that the sale price was his offer. Oy.

I'd like to take a moment to plug fightingchance.com where I got a lot of the information. I have no personal affiliation with the site. I learned about it from carbuyingtips.com, which is also a good source for information.

I am trying to go to the other dealers now and solicit lower bids from them. I'm also now trying to figure out what to do with my Honda Pilot. KBB value as a trade in is less than what I owe. In order to get what I owe, I will have to sell it privately. I am considering having CarMax look at it but I think they will not give me what I need for it.

 

Based on my experience so far, I don't think they deserve to stay in Costco's program. The whole point is that you can get a decent price without negotiating. But, the dealer's quote was originally $1,685 over invoice. I believe that would have included $835 for destination fees, but that still leaves it $850 over invoice.

My personal take is that ad fees are not my responsibility to pay. That's part of their overhead as a business. That's what the 3-5% profit I pay goes toward, along with their revenue from parts, service, and used cars. And let's be honest, they make way more than 3% profit off of those other areas.

If they $300 over invoice should be just that. Take the invoice of the base model and the options, add $300, add destination, add taxes and license. Boom. Done. But, I'm still having to negotiate with them, which is the whole thing the Costco program is supposed to help you avoid. Costco generates leads for them. They should respect that by following the rules.

 

Can anyone shed light for the reason for the Costco Program? I'm sure there's a monetary advantage for both the dealership and Costco, but how does that work?

I don't think there's a similar deal on Prius at Costco Canada, btw.

 

I don't think Costco makes money off it. Not directly. I think it's a benefit for members that adds value and would make membership more attractive, in theory at least. The dealership benefits because they get customers to come directly to them, referred by Costco. Costco members shouldn't have to spend a lot of time at the dealership since, in theory, the negotiating is done already. Choose your car, get your Costco price, sign papers, drive away. Less time on that transaction should mean more money in the long run for the dealer. They can go spend time with other customers.

 

I have tried the Costco program for a used car and they pretty much just hook me up with the closest dealer ..and they don't have what I am looking for ...used PiP advanced

Kenny

 

Glenn, I'd like to know how you are doing in your car search. You seem very diligent and knowledgeable in exploring all options in order to get the best pricing, which is what I am struggling with right now.

Not looking for a 4th gen Prius, but rather a Prius V or a Rav 4 hybrid. I've emailed Dianne, but no response yet. I figure she is super busy. For the vehicles that I've listed above, I'm not looking to pay above invoice---Prius V I've seen below invoice; but for Rav 4 hybrid, I'm sure it is very difficult to impossible since it is new and not readily in stock.

In my experience, Costco does not necessarily gets you the lowest price, but rather a generally low price with little effort. I generally like to contact dealers via email, so that way there is no hassle, I don't have to travel, and every offer is recorded and retrievable. It seems like True Car may not be that accurate, but it's a good starting point to reference. There was a service that I really liked called Carwoo! that basically lets dealers message offers to you and negotiate without giving them your personal information (so aggressive dealers won't harass you). Using this service in joint with True Car really made my car buying experience a couple years ago simple and effortless. Unfortunately, this service is no longer available.

 

I'm talking with a few dealers right now. Most are within 25 miles or so of me. I have gotten one down to $30,800 for a Four Touring with CX and Z5 packages installed. I could live without the Premium Accessory Package, but the one I test drove had it so I thought it might be a kind of deal where they are putting those in all Four Tourings.

Anyway, I'm waiting a bit for two reasons. One is that the end of the month will find dealers possibly more hungry to sell units, regardless of price. The other is that I need to sell my current car and the amount I owe is pretty close to what I can get on a private sale. If I trade it, I will lose money. So, I'm working on that part of it right now.

I recommend fightingchance.com for information on car pricing. I will say that most of the information they got me can be found freely on the 'net, but it helped me to have it all at once and to kind of confirm the numbers elsewhere. It's not very expensive to pay $40 if it saves you $1000, or more.

Right now, I think if I gave the dealers an ultimatum, I could get them to go down to $30,500 or less even. But, the end of the month might make that easier. End of March might even be more so if they have 1st quarter numbers to meet.

 

Good idea. One other thing to consider is state of gas prices that has been driving down the hybrid prices. It's been low in socal for quite some time, and I don't anticipate any drastic rises anytime soon, but it's still a possibility.

I'll check out fightingchance.com

 

"I came to you through Costco, and not your advertisements, so I'm not going to pay for your ads. And I already paid for my Costco membership, so I'm not going to pay you for that, either."

Or, play hardball. Fold up the price quotation and put it in your pocket. Then, say, "If you don't sell me the car for the Costco price, without the add-ons, I'll show this quotation to Costco and recommend that they remove you from their dealer program." And don't take that paper out of your pocket no matter what.

Sometimes, it helps to being a friend, especially if he knows how to behave in front of an obnoxious car salesperson jerk.