Costco Sued Over “Deceptive” Auto Buying Program

A little ways back I described my experience buying a car through Costco, which was generally positive.  Now, via Reading Teal Leaves, I find that not everyone is happy with the program. In fact, a New Jersey woman is leading a class-action lawsuit against Costco, saying the program is deceptive, mainly due to advertising the cars at “$X00.00 over invoice” when in fact they may be much more than that. Here’s the suit. I wanted to quote from it but can’t figure out how to cut and paste from a PDF.

I will tell you that the individual leading the suit bought a Toyota Highlander Hybrid via Costco and was told it was $500 over invoice but after buying the vehicle she got a new purchase document showing an invoice price that was actually $2187 less than the price she paid.

I never understand these class-action lawsuits. This woman is the lead plaintiff but it doesn’t really say how her situation proves that this is a pattern with the Costco Auto Program, only that this was her experience. If you’re an attorney I’d love an explanation.

Anyway, I don’t know that I still have the relevant documents for the vehicle I bought from Costco (also a Toyota Highlander but not the Hybrid), so I can’t check how I did against invoice. It will be interesting to hear if this case gets anywhere.


3 responses to “Costco Sued Over “Deceptive” Auto Buying Program

  1. I tried Costco Auto Program twice in July of 2009.

    The first attempt was for a 2009 Jetta Sportswagen TDI Diesel. Although the dealer responded that they were participating in the Costco program for that model, upon arrival at the dealership the manager stated that this vehicle was exempt from the program and at best could only offer $500 below MSRP.

    The same happened today when shopping for a 2010 Toyota Prius. The manager immediately stated that Prius is exempt. He also refused to provide written offers as stated in the Costco program and and instead put a purchase contract on the table when I requested the dealer’s lowest offer. He walked off the floor when I stated that I would not buy on the spot.

    I have been a long time Costco member and feel they are hands down the most efficient and fair retailer in the U.S. Their products, customer service, and return policy are of best to be found. But my experience with Auto Program is that it does come close to satisfaction of service that I am used to at Costco. I am surprised that Costco is even involved with this type of operation.

  2. Helga Fellay

    I had a similar experience in August 2013. Tried to buy a Prius C through the Costco Program, was referred to the local Toyota dealership, but they tried to sell it to me outside the Costco Program. I think the dealership signed up for the Costco Program in order to get Costco members referred to them, but then try to swindle Costco by circumventing the program in order not to have to pay Costco the $100 fee for the referral. I walked out and did not buy the car.
    HF in Seaside, CA

  3. I just went through the Costco auto program and was very disappointed. They advertise a no pressure, stress free buying experience where you get a discount but that wasn’t the case at all for me. People at the dealership still subjected me to endless sleazy sales tactics, flat out lies, pressure to give them my money as fast as possible and I could have gotten a much better deal by NOT going through Costco and just haggling on my own and going someplace else.

    I don’t think I’ll use Costco again and would not recommend their auto program to anyone. By the way, I also got this $200/ 50% off coupon but just found out you MUST use it at the dealership where you bought the car.

    I’m so reluctant to ever go back to that dealership again that I don’t even think I’ll use the coupon. I feel totally misled by Costco; their advertising materials are lies.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s