Volvo XC90 on display inside the entrance of a Costco store in Toledo, Ohio. Photo credit: Costco
Costco Auto Program is expanding efforts to make special offers on individual brands that go beyond standard discounts or employee pricing at prescreened dealerships.
Since 1989, the warehouse club’s auto program has let its U.S. members get certificates guaranteeing specific discounted prices on vehicles from participating dealerships that agreed to not upsell those customers into other vehicles. Starting in 2013, some brands even offered discounts equivalent to what the automaker’s employees receive to Costco members in special sales drives.
But two new Costco discount programs offer new twists:
1. A program with Volvo Cars combines both special incentives and employee pricing.
2. Costco members can claim special incentives at any U.S. Chrysler dealership, not only those vetted by Costco.
“This is just the beginning,” said Jay Maxwell, director of strategic partnership development for Costco Auto Program. “We expect to do many more special programs like this next year with a variety of automakers.”
In a promotion with Volvo Cars until Oct. 2, Costco members can receive employee pricing, an additional incentive and a $200 Costco cash card on eligible 2017 and 2018 Volvo vehicles.
This year’s Volvo offer to Costco members includes A-plan pricing and additional incentives of $3,000 on 2017 and 2018 S90 models; $750 on 2017 and 2018 S60, V60, V90 Cross Country and XC90 models; and $750 on the 2017 XC60.
Participants can combine the Costco incentive with existing Volvo discounts and incentives. After completing purchases through the program, Costco members who complete a member satisfaction survey will receive the $200 Costco cash card.
In 2013, a Costco-Volvo joint promotional effort produced 7,500 vehicle sales, the companies said.
In a separate promotion also until Oct. 2, Costco members can receive a special $1,000 incentive on 2017 and 2018 Chrysler Pacifica minivans. The Costco special incentive also can be combined with other current Chrysler rebates and incentives.
The Pacifica initiative is the first time Costco has opened participation to any of a brand’s dealers on a national basis, “but we can do this on a regional level as well,” Maxwell said.
In July, Costco tested expanded custom drives with a promotion for the northeastern and western regions of Cadillac. “We sold 1,700 Cadillacs,” Maxwell said.
Until now, Costco promotions were available only at dealerships that had agreed to strict conditions as to how they would treat customers sent by Costco. Failure to abide by those rules could lead to a dealership being dropped from Costco’s list and thereby losing the additional business.
In 2016, U.S. Costco members bought 490,000 new and used vehicles through the warehouse club’s auto program, up 5 percent from 2015, Costco spokeswoman Honey Mae Kenworthy said. The total includes cars, light trucks, motorcycles, RVs and 7,000 powersports vehicles such as all-terrain vehicles and personal watercraft.
The Costco Auto Program is primarily aimed at new-vehicle buyers, but 14 percent of its 2016 volume was used vehicles.