- Costco is becoming a major player in the auto industry thanks to its auto program that allows Costco members to get discounts on new and used cars at participating dealerships.
- In 2018, it sold more cars than ever through the program.
- Executives are gearing up for rapid growth in sales of used cars specifically, as more dealerships look to partner with the retail giant.
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Costco has quietly become a major player in the auto industry thanks to the auto program it offers that allows members to get discounts on new and used cars at participating dealerships.
Sales of cars through the program have soared. In 2018, Costco members purchased more than 650,000 cars, a 25% increase from 2017.
Now executives are prepping for rapid growth in sales of used cars specifically, as more dealerships contact the retail giant to partner up with it.
Rick Borg, the executive vice president of operations at Costco Auto Program, recently told Automotive News that Costco is expecting used-cars sales through the program to double by 2020. This portion of its business is already achieving rapid growth. In 2018, it sold 104,000 used vehicles, which was a 57% increase from the year before.
“We’ve had a high concentration of interest from OEMs (Original Equipment Manufacturers) in the last 14 to 16 months and are currently working through several initiatives with multiple OEMs,” Borg said in an emailed statement to Business Insider. “If everything goes as planned, we do expect these initiatives to have a tremendous impact on Select Pre-Owned (SPO) and Certified Pre-Owned (CPO) sales.”
While Costco doesn’t make money on each individual sale, it does charge dealerships an administrative fee to be included in the program.
The biggest perk for members is that the prices are fixed, and they don’t have to worry about bargaining to get the best deal.
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