When it’s time to purchase a new ride what’s the first place that comes to mind? For most people it’s probably a dealership. But did you know it’s possible to buy a car or truck at Costco? In fact the membership warehouse sold nearly 400,000 vehicles last year.
Did You Know Costco Sells Cars?
That figure is twice as high as it was back in 2008 and this performance puts them on the back bumper of AutoNation, the country’s top vehicle retailer, which delivered about 533,000 cars and trucks last year.
The curious thing is that Costco doesn’t necessarily sell vehicles. What the company does is leverage its purchasing power to get discounted prices for members, which number more than 45 million in the United States. They’ve partnered with a vehicle-buying service called Affinity Auto Group and they work with local dealers and ensure prices are better than what’s offered by rivals.
SEE ALSO: What Really Goes on at Dealerships, Part II
This strategy adds up to big savings. Purchasing through Costco can save buyers as much as $1,000 per vehicle. Ensuring dealers uphold agreed-upon prices the retailer sends out mystery shoppers.
Curiously Costco does not actually profit from selling cars. They offer this service as a way of attracting new members and keeping existing ones happy. The annual fee to join their club is $55.
And it’s not just members that are taking advantage of Costco’s vehicle-sales operation. Automakers are now coming to them to participate and there’s even a waiting list for dealers to get involved.
In the fourth quarter of last year GM sold more than 43,000 vehicles through Costco, a figure that accounted for about 6 percent of their domestic deliveries during that time period.
[Source: Bloomberg]
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