If You Are Determined to Buy a New Car, Here Is Where to Start Shopping

Gary North - January 08, 2016

Costco.

A site member reports.

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My time is short, so friends have been encouraging me to spend on myself. I have never before bought a new car. I always buy used and pay cash, always.

A friend visited who drives for Uber and he showed us his new Ford Fusion Hybrid plug in model. The quality was amazing and that started me thinking. I wish to take a long trip around the USA soon, so why not splurge.

First I went to the local dealer to see if the car would fit me and I liked it. I did, so then I called Costco and signed up for their program. They offer their pre negotiated deal on new and used cars and trucks. No used ones could be found for what I wanted.

Turned out that my closest Costco approved dealer is the same one that I had first visited, so I asked for the same great salesman. They gave me the Costco price and I asked if they could beat it and save me even more. No, they said that they can't even come close to the deal because it was arranged between Ford and Costco. The dealer just gets paid to deliver it. 

The savings was over $3100.

It might even pay to go to a state with Costco just to save the money.

Tell your friends. While this is the right sub forum, I hope that those from the "General" portion find this. . . .

I just signed up for car insurance from Costco. My Geico was costing me just over $1100 for 6 months and now I pay $708 for six months. I found that Geico had added in a few charges that I didn't need, but still it would have been around $1000 for 6 months. . . .

My good friend just showed me his September 2015 issue of Consumer Reports on how the various states deal with pricing. I highly recommend that you read it, as you may be very surprised.

This friend comes from 28 years in the insurance industry, so he knows something about the issues. He claims that about 30% of the insurance companies left California a few years ago due to over regulation.

http://www.garynorth.com/members/forum/openthread.cfm?forum=27&ThreadID=42889#

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Start shopping here.

If you are a skilled negotiator, you may choose not to use Costco. If you don't like face-to-face negotiating, Costco is good.

Here is a good assessment. What will amaze you is this: Costco has offered this service ever since 1989. Who knew?

Promoted with vehicles placed near the entrances of nearly all its 449 warehouse stores in the United States and Puerto Rico, the Costco Auto Program (CAP) doesn't allow you to drive away from Costco with a car. Franchise laws still guarantee that nearly all retail new-vehicle purchases must go through dealers; Costco can't make direct sales. Instead, the CAP is a buying program that connects Costco members with dealerships promising to sell specific cars at specific prices.

Established in 1989, the CAP has counted more than 1 million sales over just the last five years. But it's not alone; buying services are also available through auto clubs, credit unions, and other organizations. About 1500 such "affinity groups," including the USAA, many AAA clubs, American Express, and Consumer Reports, offer vehicle-buying services like Costco's, funneling buyers through a network maintained by TrueCar Inc. TrueCar also operates the TrueCar.com website and Auto Lease Guide, which determines residual values.

While the services may vary in detail, they all operate similarly: Affiliated dealers pay the service a marketing fee or, in Costco's case, a set amount each month, which varies dealer to dealer. For TrueCar, its fee is levied for each car sold, usually $299 for new cars. The dealers are basically paying to leverage Costco, AAA, and other entities to help lure more buyers. In turn, the dealers offer set discounted prices to those clients. That effectively eliminates the nerve-racking negotiations over price that many buyers dread.

But while a buying-service price is good, it's rarely the rock-bottom figure for which a dealer will sell that car. Those prices are still the product of thorough research, shopping around, and hard-nosed negotiation. Also, these services typically don't deal with trade-in values or financing and usually aren't much use when it comes to determining exactly which new car or truck is best for a buyer. It can also be a hassle if the dealer to which the service refers a buyer isn't local or is otherwise inconveniently located.

Buying a commodity product such as a Toyota Camry, Honda Pilot, or Mercedes-Benz C250--cars that dealers stack like cordwood--will be pretty straightforward through Costco. But it's problematic for more limited-production vehicles. If you want an oddly optioned or a highly sought-after car, such as a 2014 Corvette, the dealer isn't likely to offer you much of a deal.

For anyone rattled by the buying process, the relative ease of Costco's program takes out the shakes. It's a solid deal that comes with some peace of mind. Even guys who chew through dealership salesmen for sport may find the Costco price a good tool for starting negotiations. After all, information is power, and there's no such thing as being too powerful when it comes to getting a deal.

Business Insider reports.

Costco is becoming a huge force in the auto world.

Through partnerships with auto dealers, the warehouse retailer sold 400,000 vehicles in 2014, twice as many as in 2008, Bloomberg Business reports.

"Without fanfare, the membership-only merchant better known for selling flatscreen TVs and jumbo-size boxes of cereal has pulled within spitting distance of No. 1. car retailer AutoNation, which sold 533,000 vehicles last year," according to Bloomberg.

Customers prefer buying with Costco to traditional car dealerships for one reason: fixed prices.

"The Costco Auto Program helps members purchase new and select pre-owned vehicles from exclusive participating dealerships in their market area that have been selected, trained and certified to provide a top-notch buying experience, and offer vehicles to the member at a great value," Costco told Business Insider in a statement. "Additionally, we bring more business to our participating dealerships' service departments; with the 15% parts, service and accessories discount available to Costco members."

This means there is none of the notorious haggling or upselling of traditional auto dealers. Many buyers told Bloomberg this resulted in less anxiety during the process.

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