Costco Is Becoming One of the Best Places to Buy a Car Thanks to This Huge Perk
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Costco's power in the auto industry is growing.
On Saturday, the budget retailer announced it is once again partnering with General Motors for its popular Holiday Sales Event, which will last from October 1 to January 3.
Last year, 58,000 vehicles were sold during the promotion, a 34% increase over 2014 sales during the promotion. More than half of the people who purchased vehicles through the event said they switched to a General Motors brand such as Chevrolet, Buick or Cadillac because of the promotion.
All in all, Costco sold 465,000 vehicles through partnerships with auto dealers in 2015. Technically, Costco itself does not sell the cars, and doesn't make any money on the auto sales, instead using the program as a way to attract new members and maintain existing members' interest.
Despite this, Costco is not far behind the No. 1 auto retailer in the U.S., AutoNation, which sold 533,000 vehicles in 2014.
Costco has one major perk that traditional car dealerships lack: fixed prices. That means customers can skip the bargaining and upselling that is expected at traditional auto dealers.
This streamlined process means greater customer satisfaction. Costco surveys every member who buys a car though the program. According to the company, more than 96% of members who responded to the survey gave the program high marks for value, service and overall experience.
"Seeing the continued success of the Holiday Sales Event with each year, GM is pleased to offer the largest selection of vehicles to date for Costco members that will make the event just as popular, if not more so, than last year's event," GM spokesperson Jim Cain said in a statement.
Costco launched its auto program in 1989. Today, the retailer sells cars through more than 3,000 dealerships to Costco members across the U.S.