So we were in the market to get a new car.I usually do not prefer to
buy new cars , however there was significant financial incentive
offered by our employer to buy a new Hybrid or electric vehicle.
So we decided to buy a new Prius C One due to it meeting the criteria
set by our employer for the financial incentives.Other choices were
Honda Fit and Insight and then the higher range cars , original Prius
Hatchback , Chevy Volt, Nissan Leaf etc etc.
We did not want to haggle with the car salesman as in general it is not
a good experience which always leaves a bitter taste due to their shady
business practices.So we thought we will try the Costco Auto program.
Usually I become very paranoid as far as car salesman are concerned and
when prices are not clearly printed on anything as that leaves too much
room for error and most of the time consumers end up loosing.
I submitted my zip code and my email address to Costco site at about
7:45 PM PST and I got a response from Piercey Toyota
in Milpitas at about 9:45 PM PST that they are a costco certified
Dealer and I can set an appointment with them.
We told the dealership via email which exact model we were interested
in it was the Magnetic Metallic Gray Prius C One and we made it
clear to them that we don't want any additional options and we are not
interested in any upselling and we will not need any financing and it
is a simple deal.
So I asked a few questions to the Costco Auto Program people.Here are
my questions and their answers
Bhavesh Q1: Are dealers required to give car prices in an email
or do I need to physically go to the dealer and get the quote for the
car which Im interested in even though I know the exact VIN# ?
Costco Rep : Dealers are not obligated to give prices in writing or on
phone as Costco does not require it.
Bhavesh Q2: Is the out the door fees negotiated by Costco and
will they show me the out the door price?
Costco Rep : Yes they will show you the out the door cost including
Bhavesh Q3: How frequently is the price of the car updated , as
thanksgiving is coming near by does the Costco price change based on
market conditions ?
Costco Rep : I honestly do not know the answer to that , but I think it
would be once in a quarter.
I was also not very happy with answer to Q1 in todays age if you
already have the VIN# and don't want any addnl options on the car I
dont know why the dealers would not give the price via email , and why
would Costco not require.But considering from where we have come as far
as new car buying experience is concerned it is still a huge step.
Indepedently a few google searches told me that there is no Costco set
price for each cars and basically Dealers are obliged
to sell the car at the
dealer invoice price(not MSRP) + $100(which goes to Costco Auto Program)
Some people on Internet were saying that Dealers can have any invoice price
as they want but I'm not sure if that is true or someone is just trying
to spread FUD(Fear ,Uncertainty, Doubt).
On Saturday we showed up at the dealership without setting appointment
as we wanted to close the deal sooner because of extreme low to zero
availability of the model/color we were looking for in the entire bayarea
.Also I personally
think Toyota purposely might not be building too many Prius C 0ne's and
probably building more of higher models of C two,three,four to
upsell folks , some other forums also mentioned similar observations of
low availability of starter models.
Now comes our real experience with the dealer .
On arrival we straight went to the Costco salesman and he was a Fleet
manager.He was a good person and was not at all pushy in fact I dont
even think he was a salesman as he was not at all pushy and very calm.
So I asked him to show the dealer invoice price and he showed it to me
for the VIN# I had chosen , Cargo and other mats were shipped
from the factory along with the bumper guard.So that was included in
the dealers invoice price which was $19,349 and miles on the car were 45.Ideally I wanted the
base model without these silly addons like bumper guard and Toyota mats
for the full car, but the salesman said that for our region
they always ship mats.To which I didnt have much choice as the
model/color was just not available .
As per costco agreement we need to pay $19349(which is the official
dealer invoice price which he said will be same across entire
california, dont know how true that is) + $100 , so the final price
comes to $19,449.Though , one nuance is the invoice sheet he printed did not have costco logo.I would have preferred to see a Costco logo for peace of mind. He also told me that they are legally obliged to
submit the official dealer invoice price to Costco.I do remember that
when I had signed up for the Costco Auto Program I did ask Costco to "
verify my savings after purchase." and here is
the text from costcos website
So then we asked him about all the addnl fees etc and he gave us a
printout of the price along with all the addnl fees(mainly from DMV)
and it came to $21,409 out the door price since we did not need any
financing etc.The documentation fees was $85 which is the maximum
anyone can charge in california and it was included in the out the door
Here is the exact breakout based on our contract.
Cash Price : $19449
Documentation Processing Charge(not a government fee) : $80
Sales Tax : 1635.61
Electronic Vehicle Registration
or Transfer Charge : $18.60
Paid to Public officials
Vehicle License Fee : $127
Registration/Transfer/Titling Fees : $90
California Tire Fees : $8.75
Also we made it clear to him that part of payment will be via Amex as
we wanted some cashback from Amex.To that he said that Piercey Toyota
has a cap on maximum amount to be charged on any Credit card as $2000(Apparently as per Amex site $2000 is the minimum they have to accept
.We didnt want to haggle on it too much so we said fine and the rest of
the amount we paid via personal Check.
So the deal seemed reasonable to me so I wanted to test drive the car
and when we checked the car we found there were 107 miles on it versus what was on the invoice as 45.I
really didnt like it but the salesman told me the car came from
Vallejo.But since I had read about this online that there is quite a
bit of possiblity in buying new cars that there are some miles on it ,
so it was not too much of surprise for me.
We took it for a short test drive and things seemed ok.
So then I ran a calculations on my smartphone and online.
My calculation was following , based on
the cost of the car was for Milpitas(Piercey
Toyota is in Milpitas)
Base Price : $18,003
Options Price :$189
Destination Charge : 795
Now Costco's own website showed the following
Base Price : 18,003
Options : $189(Cargo/Carpet Floor mats, this price is costco's
Destination Charge : $795
Total : $18,987
So even I were to get the best deal in town I would have to pay $18987
+ $100 for Costco Auto program , so it comes to $19,087 and what I was
quoted is $19,449.
So the difference would come to is about $362.
Also anyone who fills out Costco survey would get $50 back from Costco
their survey and that can be only used at the Dealership which you bought
the car from and $20 cashback from Amex.This $70 I would have got back
regardless of the price of the car and the cost of the car .
So overall even if I overpaid , I might have overpaid by $362-$70 =
To me this ~ $300 is well spend considering that there was literally
zero availability of model/color in entire SF bay area, that
overall we felt that we might have not got the most perfect deal but it
was reasonably good.We could have visited 5-8 dealers in SF bay area
and negotiated with sleazy salesman and would have "potentially" saved
another $100-$200 but we felt it was not worth the hassle.
Overall we were ready to buy the car and so we finished the paperwork
in the salesman's office.Unfortunately since we were paying by personal
check the full amount , we still had to give our social security and
had to go through a credit check .I had already read about it online
that for personal checks they do have to do a credit check etc, so we
gave our Social security number.
Then for the final steps of payment we were asked to meet the Finance
department guy who wanted to sell me(to some extend scare me by showing maintenace costs) extended warranty etc and I told
him that we are not interested and would like to finish the
paperwork.We were done with all the paperwork in 20 mins or so while
our car was getting detailed etc and they went and filled fuel in it ,
when i saw the car again it had 5 more miles , so i asked how and they
said they took it to fill gas(2.5 miles each way).
The original salesman who helped us buy the car did a walk thru of the
car and we were on our way.
Then suddenly while I was driving I felt that I was speeding at 50 mph
in a 40mph , but to my surprise the car was showing in km/hr , Phew...I
never expected that it will be in km/h instead of mph .In any case I
quickly figured out to change to mph and lots of other people on
various forums had the same problem when they bought the Prius from dealers. I dont
understand why the dealers would not take care of this simple check as
it really can cause issues especially newer cars make less noise and it
is hard to figure out that you are speeding on a new car.
Overall to summarize our experience was pretty good in today's age of
dealership controlled monopolies and behind the door pricing etc.My
hope is that in future we are able to buy cars online by pricing it
correctly and knowing exactly how much we are paying upfront and from
home.But until that day comes I feel Costco's auto program is a decent
compromise and I would recommend it to "my grandma to buy her car with Costco Auto Program" .
Update 1 on 11/18/2012 : I filled the Costco Auto program survey to receive the $50.I also gave them the URL of this blog post and they told me that their Membership advocacy group will follow up with me on my experience in 3-5 business days and might ask a testimonial from me as well to be published.They instantly send me the $50 voucher via email after filling survey.
Update 2 : On Nov 22 , 2012 , Costco's Membership advocacy group followed up with me and have asked me to send the Invoice/MSRP/Contract to them as they would like to review my case.I was more then happy to get it reviewed.
Update 3 : Enrolled on Toyota.com and found out on their website that indeed the car was shipped from Vallejo.And then as per the printed invoice which i got as above had 45 miles on it.And the distance from Vallejo Toyota to Piercey Toyota as calculated by Yahoo is about 62 miles so 45+62=107 miles , bingo my odomerter reading as I bought it.Also on Toyota's website I found something weird that it said that the PDI(Post Delivery inspection) was done at 4 miles and at Vallejo Toyota but that is incorrect as PDI was done with me and the date on Toyota's website was the time I picked up the car.
Update 4 : MSRP on the car was $20,049
Update 5 : Finally figured out how to price it correctly on truecar.com.The Truecar's average price paid for the exact Selection came out to be $19,605
Someone got this awesome deal
on Prius C2
Update 6 : Found out that Costco Program is not same as Truecar.com which is primarliy used by AAA,Amex etc.Here is the link on wikipedia
which confirms that.
Update 7 : Send all the paperwork to Costco Member advocate group and got a call back from them in 24 hours that they confirmed that I had got the Costco price for my car
posted at: 01:03 | category: /personal | permanent link to this entry | Donate via Bitcoin