Costco pricing in Oregon?

About a week ago I was in contact w/ the Costco Auto Program. They have yet to have the 2010 Prius incorporated into their program. No clue as to if or how long it might be before this might happen.

 

Last I checked Costco didn't have 2010 Prius option on their website for a Portland zip code. I contacted a dealer that I worked with a few years ago (for Costco pricing) when I was looking at (but did not buy) a Prius and they offered $250 below MSRP for a 2010 Prius III.

 

Touching the area below msrp already,,, here we go!

 

Costco has nothing to do with the pricing a dealer is offering. The dealers set the pricing, not Costco.

 

For the Costco pricing, does it make a difference if you are an executive or regular member?

 

It does not make a difference in terms of what a dealer may offer, as only the dealers who choose to partcipate may do so.

However, if you do choose to go through with, and you contact a dealer THROUGH Costco, they sometimes provide a $100 gift card for executive members, as I have recieved mailings with that information before

 

Dear accordingly,

Thank you for contacting the Costco Auto Program. We take our members’ feedback seriously and appreciate you taking the time to provide us with your comments.

The 2010 Toyota Prius is a newly-designed model and dealers are inclined to see how the market reacts to it before offering significant discounts. New model vehicles tend to be in short supply in the first few months since vehicle manufacturers want to make them available to all their dealers on a national basis. While pricing adjustments may be made as supply becomes more in line with demand, at this time it’s not possible to predict when that might happen. We apologize for any inconvenience this may cause.

If you have any further comments or concerns, please contact us at (800) 556-4730. We are available Monday through Friday from 7:00 am to 6:00 pm Pacific time.

Sincerely,



Jennifer Henderson
Member Advocate Group
Costco Auto Program

 

And there you have it. I don't doubt that some dealer out there is offering some small discount to costco members, but the VAST majority will not. I know a lot of people on this board seem to think that dealers will be discounting them within a few weeks, but I seriously doubt that. As the new model comes out, and more people see it, more people will want it. The more people want it, the higher the price goes. Simple economics 101. And IF toyota re-allocates units to japan and take them away from the US market, that will just exacerbate the problem.

If you truly want one, just buy one. To wait a potential 4-6 months to see if a dealership will save you $250 doesn't make a lot of sense to me. If you break it down, over the life of the car (say, 5 years of ownership) that extra $250 is literally less than having whip cream added to your favorite latte.

 

If that is the case, then what is the advantage of using the Costco program? Costco advertises "ignore the sticker price, Costco members pay less" ... so they must have some leverage with the dealer.

That said however, I can well believe that for a brand new model such as the 2010 Prius, the initial supply is swamped for a time by the pent-up demand, so dealers will control the pricing.

If you want a good price for the car via Costco, wait a year. That shouldn't be so difficult, should it?

 

The dealer agrees to sell the vehicle to costco members cheaper simply because it is found business. It is probably a customer that I wouldn't have had. That is why dealers agree to do something with Costco.

And yes, an invoice deal can be had. Just not in the foreseeable future.

 

Of course Costco has leverage with the dealers. The dealers don't set the price, the MARKET sets the price. During this very short period of demand exceeding supply, the price may be MSRP and in some areas MSRP plus some bogus add-on's. Given today's economy, this price will drop quickly. You are already seeing more people than I would have expected reneging on their pre-deposits because dealers are asking MSRP or above. There is a broad rejection of this pricing. The dealers will be forced to lower their prices or else sit on inventory and sell very little. You won't have to wait a year. A month or two should do.

 

The leverage, is actually motivation dealers have in the number of potential customers that are referred to them thru the program. The pricing and terms are set by the dealership, not Costco. Members are not charged a fee for this buying service. I don't know if the dealership pays for each lead. Not my business, and I don't really care.

Let me relate an experience I had just this morning. A rep from the Costco Buying service called me to follow up on an inquiry that I had sent weeks ago regarding a Prius 2009. I told him that I was no longer interested in the 2009, but wanted to buy a 2010. He replied that Costco was just adding the '10 model to the program starting this coming Monday. I asked which local dealer is participating and he mentioned one that had previously quoted $2k over MSRP. I then asked him to refer me to another dealer as I wouldn't do business with that store. He said that he could only refer me to one participating dealer per inquiry. However, since this was a new inquiry ('10 vs '09 model) he could refer me to another dealer that was roughly the same distance from my home. I asked him if Costco set pricing or documentation fees (which are very high in Arizona). He said that those amounts were set by the dealership and I'd have to discuss that with the dealership. However, he added that the doc fee was consistent across the participating dealerships.

IMO, Costco's auto buying service is a referral service. They get buyers phyisically into the store. If the dealership chooses to participate, then they'll agree to the fee that has set by the first dealership. In other words, the first one sets precedence. Eventually, additional dealers join to take advantage of this lead generation source, i.e., Costco.

Anyway, that's the way I see it as an outsider just trying to make some sense of it. I welcome others who know different to let me know. Knowledge is leverage.

 

That is a good thought. However, there is a big fly in that price structure. The tanking value of the US dollar. Silver just hit a one month move record and gold is rallying. The dollar is sinking fast because we are forced to debase its value. The printing press of money will raise the cost of everything and we will be getting screwed.

Sure they could hold the price down but the dollars value drop is off setting that move. The price will have to go up to cover their costs or they will have to start cutting their profit margin. I hope they will just keep the price the same and eat the difference in value drop. They certainly had enough of a profit to do so. So lets hope so.

Lower the price? I have seen $500 below MSRP but how long that will hold is up to the dollars free fall.

Check out Everbank.com for their free newsletter the Phenning to keep up with the currency drop if you are serious on buying this car down the road.

 

You are 100% correct on how the program works.

Even if the dollar drops below the value of the mexican peso, I still want dollars when you buy the car. You are talking about a global economy, dealers don't look at it that way. I have a hard price I have to pay for the vehicle once it is shipped. Regardless of what happens in the market, Toyota does not come back to us and say, "The dollar value dropped, so we are going to give you some money to compensate for that.. go ahead and lower the price."

The VAST majority of dealers are at MSRP. Some are over by adding "fluff" items. I am willing to bet that 1 out of 50 is discounting the car. In the end, your are correct though. If you want one at a larger discount, wait whatever it time it takes.

 

This is not a typical auto market or typical economy. It will not take as long for a new model's market price to drop in 2009 as it would have taken a year ago.
Of course, right now most dealerships don't have any 2010s available yet or they only get one or two at a time, so even in a slow market selection is poor.

You do not get an automatic discount for being a Costco member. Certain dealerships chose to participate with the Costco buying program and Costco will refer you specific contacts at those dealerships who have an agreement to sell to Costco members at no-hassle prenogotiated prices (which isn't necessarily below MSRP).

It's a huge assumption that the price difference between trying to buy one of the first 2010s to hit the dealer lots today and buying the same car in 6 months will only be $250 or anywhere near that small.
Not likely!

 

Jeff, do you think it's possible that Toyota will adjust the price upward later this year if demand remains strong and the US dollar continues to devalue? I was also thinking that once the general public recognizes that there's a new generation Prius, a foothold will be established and Toyota will feel less compelled to compete on price with competition such as the Insight. Oh well, better reign myself in... I'm getting way off topic...

 

No. Toyota has pretty much bet that it should sell the numbers it needs to at their current price point. IF there is an increase, it will be in the neighborhood of 100-200 bucks. I have never seen a bigger increase mid-model year. Besides, if the dollar recovers against the yen, they would just be making more money anyway. Best way to sell something is figure out what the least you will take for it given the market conditions. If something changes in the market behind the scenes (cheaper manufacturing, cheaper suppliers, etc) and you can leave the MSRP alone but still make more money, you are golden.

Basically, Toyota would be shooting themselves in the foot if they decided a large ($1000 or more) increase is in order. Gives all other hybrid manufacturers something to grin about.

 

It may very well be sooner than that. It will be based on supply and demand, the price of gas in the US, etc. Just like it is every year. Prii are a VERY cyclical vehicle. Prices in the winter go down, and go up in the summer. Has for the last 6+ years. Given this is a new vehicle, I would imagine that trend to continue. But I will not hazard a guess as to when the prices will come down. Is it worth a 6 month wait to save $250? I personally don't think so. Is it worth a 2 month wait to save $250? Absolutely. Is it worth a 6 month wait to save $1,000? I think so too. But that is a guess by everyone. In the meantime, you are still driving your vehicle which is depreciating day by day. We can study numbers all we want, but in the end, a vehicle purchase is based on emotion.