Costco Car Buying Program vs TrueCar: Process, Pricing, etc Compared

The Costco Auto Program and TrueCar are car-buying programs that help connect customers with dealerships and find the vehicle they want. Both programs help negotiate pricing to make the transaction process as haggle-free as possible. Below, we compare the two programs in terms of their pricing, selection, and warranty/coverage options to help customers choose the best option. 

What We Recommend

While Costco’s Auto Program typically has better pricing options and a more seamless process, it’s important to note that the program is only available to Costco members. If you already have a Costco membership or find that signing up would be worthwhile, the Costco Auto Program is the best option.

See our related research for more information on whether Costco’s membership fee is worth it. If you decide that you don’t want to become a Costco member, or you’re looking for a more extensive selection of dealerships and vehicles, TrueCar’s program is likely the better option for you.

Costco Auto Program vs. TrueCar

Car-Buying Process

The Costco Auto Program works similarly to a membership service. Automobile dealers pay a small fee to be part of Costco’s network, and in return, they gain access to a dedicated customer base. The dealers pre-negotiate the price of a car with Costco, and customers can buy at that price.[1][2]

TrueCar works a bit differently, developing relationships with reputable dealers in different regions. When calculating a “TruePrice,” TrueCar takes the average of offerings from all dealerships within the area to sort out poor, good, and exceptional offers. After you choose an offer you like, TrueCar will send you to the dealership to finalize the transaction. TrueCar receives a commission from every purchase.[3][4]

The main difference in these programs is that the Auto Program isn’t Costco’s primary line of business; it’s an additional service the company provides to customers. TrueCar, however, specializes in connecting customers to dealers. The company forms partnerships with as many dealers as possible to sell more cars, providing a wider selection of options. 

Pricing

For a realistic pricing comparison, we chose to compare Costco and TrueCar’s pricing process for a 2020 Toyota Camry and a 2020 BMW 2 Series.

TrueCar displays transparent pricing, compared side-by-side with the vehicle’s MSRP. The Costco Auto Program, however, doesn’t show a price until the dealer provides that information (or the customer contacts the dealer directly). However, we found that since Costco’s prices are pre-negotiated, they tended to be slightly lower than the prices offered by TrueCar.

The appeal of using a car-buying program is that Costco or TrueCar will do the haggling for you, making the process quicker and easier than direct negotiation. However, it’s also worth noting that while you’ll get a competitive deal with these car-buying programs, you may be able to get an even better offer by negotiating with the dealer directly.

Dealership and Vehicle Options

While options can vary, we found that TrueCar typically has a significantly larger selection of dealerships and vehicles. With over 15,000 dealerships in its network, TrueCar likely has a partnership with a certified dealer near you.[5] Costco doesn’t provide the exact number of dealers in its network but states that it works with around 3,000 dealerships nationwide.[6]

Additionally, TrueCar has a significantly wider selection of cars by showcasing both new and used cars. Costco’s Auto Program limits your search to models within the last two years.[2][4]

Warranty and Coverage

Since neither the Costco Auto Program nor TrueCar sells vehicles directly, they don’t offer warranties or extended coverage for your purchase. You’ll need to work with the dealership that’s selling the car to get coverage. The manufacturer typically provides warranties, and the dealer may offer additional or extended coverage for your vehicle.