Buying a car via Costco

June 5, 2015

Share this article:

Costco members know they can buy a wide variety of products, from flowers and tires to pizza, in the vast warehouse stores and online.

Now, Bloomberg Businessweek reports that Costco has quietly become a major player in selling automobiles.

In 2014, Costco Auto moved almost 400,000 new vehicles of all major brands in the U.S., twice as many as in 2008. It also offers used cars, motorcycles and RVs.

The new car sales compare with the No. 1 car retailer, AutoNation, which sold which sold 533,000 vehicles last year. “That’s a much bigger number than I would have expected,” LMC Automotive analyst Jeff Schuster told Bloomberg Business Week. “This reinforces that everybody wants a deal, but they don’t want all the headaches of haggling.”

You can’t just pull up at a Costco and drive home in a new vehicle. Costco works through a buying service called Affinity Auto Group, arranging discounts for its 45 million members.

For instance,  Costco and General Motors last October offered U.S. buyers a $500 store gift card plus a non-negotiable price for most GM models. In the fourth quarter of last year, GM sold 43,300
vehicles through Costco, or about 6 percent of the automaker’s total domestic sales in that period.

Thus far, Costco isn’t making any money itself on the auto sales, allowing any profits to go to the local dealers who deliver the cars.

And, where Costco once couldn’t get automakers attention for the promotion, Gina Paolino, president of the Costco Auto Program says automakers are now coming to it.

For story ideas, see if any shoppers at your local Costco purchased their cars through the program. Talk to local car dealers to see how many vehicles they are delivering to Costco customers.

Author

  • Micheline Maynard

    Micheline is a contributing columnist at the Washington Post concentrating on business and culture. She has written about flooding in Detroit, tainted water in Benton Harbor, nationwide shortages of restaurant staff, and vaccine hesitancy.

More Like This...

Changes in the auto industry are impacting businesses well beyond Detroit. Consider your local gas station. (Image by StockSnap via Pixabay, CCO Creative Commons)

Reporting on the future of gas stations

Before long, your local gas station may be running on empty. While it’s roughly estimated that there are just over 121,000 gas stations in the

The auto industry is a never-ending source of business stories. These six articles will get you up to date before plunging in. ("Google Self-Driving Car" image by "smoothgroover22" via flickr, CC BY-SA 2.0)

Car industry update: Eight great reads

The automotive industry has never been a richer source of business stories. Driverless cars, millennial buyers and President Trump’s initiatives to keep manufacturing jobs at home

As summer travel season approaches, here are six must-read articles to inspire your own reporting. ("Beach chairs on Sand" image by "williamsthomas310" via flickr CC BY 2.0)

Travel industry update: Six great reads

As the year’s big travel season approaches, business writers looking for new story angles should read-up on the latest trends and predictions for the tourism industry.

Two Minute Tips

Sign up now.
Get one Tuesday.

Every Tuesday we send out a quick-read email with tips for business journalism.

Subscribers also get access to the Tip archive.

Search

Get Two Minute Tips For Business Journalism Delivered To Your Email Every Tuesday

Two Minute Tips

Every Tuesday we send out a quick-read email with tips for business journalism. Sign up now and get one Tuesday.

Our free eBook has gotten a makeover!
It now has expanded topics and downloadable chapters.