Vincent Rives was in the market for a new car, but the process felt overwhelming. Car dealerships are notorious for hard-sell techniques and upselling the customer on everything from tires to floor mats.
He was shopping for groceries at Costco when a flyer for the Costco Auto Program caught his eye. Could the great savings and customer experience you expect from Costco be transferred to buying a car? (1).
Costco promised a fixed price and no haggling, which could turn a stomach-churning six hour ordeal into an easy one hour experience.
It wasn’t just the process that was easier either. Rives ended up going with the 2025 RAV4 hybrid that was listed at $48,540, but because he bought through the Costco Auto Program, it only cost him $36,720 — a savings of over $11,000.
His approach frames a larger trend in the automotive world: as prices and monthly payments remain near historic highs, buyers are increasingly willing to explore nontraditional paths to avoid haggling and unexpected costs. Here’s how buying a car at Costco works, and what consumers are doing to find the best deals.
You can’t walk into your local Costco looking for cars on the top shelf. Though the retailer is famous for purchases in bulk, it doesn’t actually sell cars. Instead, the program is a way for Costco to offer value to both its members and car dealerships by cutting out uncertainty for both parties.
This is how it works. Costco members are serious about shopping and saving money. When you pay your $65 annually for a Gold Star Membership ($130 per year for an Executive Membership), you show you’re committed to making Costco your go-to destination for great deals (2).
Costco members are famously loyal, and the company knows your shopping profile. That’s valuable information for a retailer who has to spend large sums to attract the attention of someone like you. Armed with this information, Costco goes to local car dealers and offers to be a broker between a high-intent customer (you) on the condition that the deal shaves off some of their profit margin on the vehicle (3).
Dealers accept slimmer margins because programs like Costco’s can deliver sales volume while cutting what it costs to find a buyer. With dealerships often spending roughly $400 to $800 per vehicle sold on advertising, a membership referral pipeline can function like a built-in lead source that offsets those marketing costs (4).
Data from Kelley Blue Book showed that the average new-vehicle transaction price reached $50,326 in December 2025, which explains why middle-income shoppers feel priced out of the market or are afraid they will be forced to make significant compromises when they’re under the glare of a high-pressure sales person (5).
Even when a buyer can technically afford the sticker price of a vehicle, the reality of financing is stretching household budgets to the limit. Reports from Experian indicate that average monthly payments for new cars have hovered around $748, while used car payments averaged $532 as of the third quarter of 2025 (6).
For Costco Executive members, who get up to 2% cash back on purchases, the rebate on buying a $45,000 vehicle is another potential source of value. But beyond the raw numbers, many shoppers are desperate to avoid markups and surprise add-ons.
Negotiating is a major pain point for most buyers, and dealerships often generate their highest margins through trade-in valuations, financing markups and back-end products like extended warranties or protection packages. For buyers like Rives, not having to worry about negotiating add-ons is worth it.
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On the other hand, skilled negotiators may be able to get a better price than the Costco deal, especially if they are financing the car. For example, if you are pre-approved for a loan, you can ask the dealer to match or beat that rate. Many dealers have access to automaker incentive program, which allow them to beat a bank’s rate, sometimes with as low as 0% financing (7).
While Costco’s club model is popular, it is only one option among several. AAA offers its own auto buying program that promises upfront pricing through a network of certified dealers. Sam’s Club provides a similar service powered by TrueCar, which often includes post-sale benefits for members (8, 9).
Additionally, many credit unions, such as PenFed, pair their financing options with car-buying portals to give members a streamlined experience. These programs all share a similar goal of reducing negotiation fatigue through upfront offers (10).
These programs all work in slightly different ways. Sam’s Club, for example, is more of an online marketplace than a club deal like Costco’s. Nevertheless, buyers still have to do their homework with regards to dealer fees, additional products, and financing terms.
These services reduce the hassle of the initial price search, but they do not replace the need for due diligence, especially since actual savings may vary.
To get the best result, shoppers should treat membership pricing as just one quote in a broader process.
Before visiting a dealer, it’s a good idea to secure preapproved financing from an independent bank or credit union. Buyers should also request written all-in quotes that include all taxes and fees from at least two different dealerships to ensure the membership price is truly competitive before you visit the showroom floor.
It is also helpful to compare a membership offer from Costco, for example, against other portals like those offered by AAA or Sam’s Club. Throughout the process, the focus should remain on the total cost over the life of the loan rather than just the monthly payment, as longer loan terms can often hide high interest costs.
Membership-based car buying programs are useful tools for avoiding stress and occasionally securing significant savings, but they work best when paired with traditional research. The primary takeaway is not simply to join a club to buy a car, but to use every credible pricing channel available and verify the math before signing any contract.
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Business Insider (1); Costco (2); WebProNews (3, 4); Kelly Blue Book (5); Experian (6); The Wall Street Journal (7); AAA (8); Sam’s Club (9); PenFed Credit Union (10)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
