Justin Sullivan/Getty Images
- Costco is becoming a major player in the auto industry thanks to its auto program, where Costco members can 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.
- Visit Business Insider’s homepage for more stories.
Costco has quietly become a major player in the auto industry thanks to the auto program that it offers where members can 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 them.
Rick Borg, 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 currently 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.
- Chick-fil-A is exploring vegan menu items as chains like Burger King and Chipotle double down on meat substitutes
- McDonald’s confirms it’s bringing international hits to the US — here’s what’s on the menu
- Panera employees share their tips for saving time and money at the chain