Costco Auto Buy Program

[dick]

Re: Costco Auto Buy Program

>>>Costco is fine but when it comes to servicing, you may not get the special treatment a sales associate will give you after the sale. If you buy a car from me, I will personally handle your service needs for as long as you own it.<<<

And get jacked?

I bought my car from a "dealer" (Servco) and I got no "special treatment." Servco screwed me as far as I'm concerned in terms of "service." Close to $150 for standard "service" in Honolulu, but when I moved to Seattle and got my car serviced here at Toyota of Seattle (exact same deal -- oil, tire rotation, etc.) it costs me $50 (plus a free car wash coupon at Brown Bear).

Oh, and I got my recall notice from Toyota of Seattle TWO MONTHS before Servco notified me, even though I bought my car there and notified them of my new address.

Oh wait, there's shipping.

[tutusue]

Re: Costco Auto Buy Program

[...]
I bought my car from a "dealer" (Servco) and I got no "special treatment." [...]

I'm thinking "special treatment" (extra customer service), as Craig described it above, is more the decision of the salesperson than the dealership. It sounds like Craig would rather oversee his customers needs than leave it to the dealership...while throwing in some extra perks. Dick, it sounds like you didn't have a salesperson with the same philosophy.

[hawaiiguy]

Re: Costco Auto Buy Program

[QUOTE=craigwatanabe;257391]

My feelings are that right now many of Hawaii's auto dealers are into their summer sales and quite a few are running ads below MSRP to drum up sales. Because the Costco program locks in a negotiated price between them and the auto dealership, these summer sale prices may be in some instances, lower than the costco price.

QUOTE]

You are so right...i was VERY DISAPPOINTED at the Honda dealership (the one and only guy for the entire state) for the time I had to spend there (over 3.5 hours), then to hear it all at the end (finally) how much is the Costco Pricing and how much they were going to give on the trade-in... HA!

Why, it was four digits *over* the dealer invoice price!!! There was hardly anything between that price and MSRP!...

I am trying other venues, like internet pricing, etc...on other dealers... before the end of this month!

[bueller555]

Re: Costco Auto Buy Program

I wanted to avoid the whole car buying experience, so I went with the Costco program to get my Hyundai. Seriously no pressure and the prices are set with a fixed markup. If you don't mind or relish the haggling experience then the Costco program isn't for you. I don't mind paying a fair price (ymmv) and I hate the whole back and forth bs with regular buying, so the Costco program was perfect for me. If I wanted to squeeze nickels then I would have bought used, not new. The only haggling with the Costco program is with the extended warranty offer and if you have a trade-in. All in all, I actually enjoyed my Costco/Hyundai purchase.

[matapule]

Re: Costco Auto Buy Program

I don't mind paying a fair price (ymmv).

I work out at the gym with a guy who retired from the auto dealership he owned. He owned a Japanese auto dealership and participated in the Costco program. I asked him what a "fair price" is for both dealer and buyer. He said "dealer invoice" is a fair price for everyone. He loved when Costco buyers came in because the Costco price is over invoice. He said that auto dealers make their profit on manufactuer incentives and rebates and service work and used cars. He said anything over invoice on a new car is gravy.

I dunno, that's just what he said.

[craigwatanabe]

Re: Costco Auto Buy Program

I work out at the gym with a guy who retired from the auto dealership he owned. He owned a Japanese auto dealership and participated in the Costco program. I asked him what a "fair price" is for both dealer and buyer. He said "dealer invoice" is a fair price for everyone. He loved when Costco buyers came in because the Costco price is over invoice. He said that auto dealers make their profit on manufactuer incentives and rebates and service work and used cars. He said anything over invoice on a new car is gravy.

I dunno, that's just what he said.

it's fair for the dealership however it's not fair for the sales associate making a living selling the car. When buying thru the Costco program, all leads go directly to the dealer's internet manager where sales associates commission is typically deleted. Almost like buying direct (well sorta).

Manufacturer's incentives are simply buy backs that allow the dealership to lower the cost of the vehicle and recoup thru the manufacturer who "Buy's back" the difference just to move merchandise.

Service work is always considered in the purchase of a new vehicle. Service contracts is how the Service Department makes money. It's also a way for the new car owner to have one place handle all of their servicing needs with all service records. It's more expensive but some really like that convenience.

As for Gravy, the only gravy is the "Dealer Markup" that is clearly identified on the dealer sticker (that thin window sticker next to the Monroni sticker that identifies the standard features that came with that vehicle from the factory). There are dealer add-ons such as protection packages (that can include mudguards, floor mats, side door guards), trim package add-ons such as foglights, alloy wheels and others. The Dealer Markup allows room for negotiating so a dealership can "Hold Gross" and return the highest possible profit margin. Is that bad? Considering many hardware stores mark up their power tool accessories over 100% and their tools themselves close to 40%, the Dealer Markup is considerably smaller percentage wise over MSRP.

It's the cost of doing business. You don't go into business to simply break even, you have to allow a profit margin or else why be in business? Costco uses fleet pricing to ensure the lowest possible price for it's members. But that also means that only a select amount of vehicles can be sold in this pricing scheme. That means Costco is limited to the number of vehicles it can sell at these prices...nationwide.

One of the reasons why people buy from a dealership is the trust bond between the buyer and the sales associate. A good car sales associate will be there for the buyer long after the sale for two reasons: 1) to establish a long term repeat and referral business relationship and 2) to provide a liason between the service department and the buyer.

Many times the sales associate will go out of their way to ensure prompt and courteous service to their customers. For example, if you work and can't get off to bring in your car for servicing, I will go to your workplace, pick up your vehicle, have it serviced and return it at the end of your work day. No charge on the pick up and delivery service. The service department can only offer a shuttle service or a loaner car (if one is available). Try getting that thru the Costco program.

It's the human touch that allows car dealerships to stay in business. Yes you will have a few bad dealerships and even really bad managers and sales associates, but like a good mechanic, doctor, dentist, plumber, whatever the profession, you search out the ones you can trust and stay with them.

And by the way, Tony Honda isn't the only Honda dealership in the state of Hawaii, Fletcher Jones operates Big Island Honda as well as the Mercedes, Porsche, Land Rover dealerships on Oahu.

[hawaiiguy]

Re: Costco Auto Buy Program

I work out at the gym with a guy who retired from the auto dealership he owned. He owned a Japanese auto dealership and participated in the Costco program. I asked him what a "fair price" is for both dealer and buyer. He said "dealer invoice" is a fair price for everyone. He loved when Costco buyers came in because the Costco price is over invoice. He said that auto dealers make their profit on manufactuer incentives and rebates and service work and used cars. He said anything over invoice on a new car is gravy.

I dunno, that's just what he said.

You can say that again!!! the Costco price was four (4) digits over the invoice price...so much that heck, I'm really only saving less than $600 over MSRP...

Decided to go to Pflueger Honda, we wheeled and dealed there late Sunday afternoon, and got a very good price and the suv we wanted...even though we were trying not to haggle in the first place, hence trying out the Costco Program... Our sales person at Pflueger Honda says they honor Sam's Club Auto Program, which is 3% over invoice...now THAT would save us (if we were members, but we aren't) some money...but he also mentioned 'No further haggling' (on the Sam's Club Program).