Image: Couple shopping for a new car © Tetra Images, Getty Images

Americans buy virtually everything at Costco. Eyeglasses, big-screen TVs, crates of oranges, jumbo boxes of cornflakes and giant jugs of mouthwash are stacked in the company's almost 600 warehouse stores. So why not buy a couple of tons of new car there, too?

"We are a service to the members," says Gina Paolino, the president of the Costco Auto Program, which operates as a separate division of -- and vendor to -- Costco Wholesale. Because there are about 60 million Costco members in North America, that could well include virtually everyone on the continent who is considering the purchase of a new car.

Claiming more than 1 million completed new-car purchases during the past five years, the Costco Auto Program is one of the largest buying programs around. Beyond that, because there are so many Costco members, it's one of the most generally available as well.

Of course, the Costco program isn't alone out there. Similar buying programs are offered by AAA clubs and other groups, with slight or significant differences. The AAA programs can vary from club to club around the country, and some are administered by outside vendors such as the Affinity Development Group. A company called TrueCar administers purchasing programs for USAA, American Express, Overstock.com and even Consumer Reports, among others.

How the programs recruit dealers, how they're financed and what services they offer consumers differ. For instance, though many programs are financed through dealer-paid marketing fees like Costco's, others, like at least some of TrueCar's, are paid set amounts (maybe several hundred dollars) by the dealers when sales leads turn into actual sales.

At Costco, it's almost impossible to avoid seeing the new cars placed near the entrances of most of the retailer's warehouses. They're usually mainstream models -- such as Toyota Camrys, Ford Fusions, Honda Accords or Chevrolet Malibus -- covered in signs almost begging shoppers to save money with the Costco Auto Program. And for most buyers, that's what the program would do.

Still, "most buyers" is a group that may not include you.

What Costco doesn't do

To be clear: It's impossible to buy a new car through Costco itself. The franchise laws and dealership agreements the auto industry operates under mean virtually every new car sold in America at retail must go through a dealership. Costco doesn't maintain an inventory of cars, has no agreement with manufacturers to sell any cars and can't use the leverage of its massive purchasing power to buy and/or sell cars at lower prices.

But when it comes to buying a car, the Costco program does reduce the pain.

What Costco does

The Costco Auto Program is a service that pre-negotiates discounted vehicle prices with participating local dealerships and then brings that dealership and Costco members together to complete the purchase. So a Costco member buying a car this way doesn't have to negotiate on price with the dealership or deal with a salesperson. As long as the buyer knows what he wants, the new-car financing is in place, and there's no hassle over a trade-in, it's about as straightforward as a new-car purchase transaction can get.

"What you get is a protected experience," explains Phil Reed, the senior consumer advice editor for Edmunds.com, an automotive-pricing website. "And this protected experience has value. Because without it, the customer can be aggressively sold all sorts of warranties and add-ons he doesn't need or, usually, really want. What consumers hate is the unknown, and with this you get an upfront price and a protected experience."

That experience starts with a visit to the Costco Auto Program website or a phone call to its toll-free number, 1-800-755-2519. With the information in hand about what car or sort of car the buyer is seeking, Costco puts the buyer in contact with a "certified" dealership that has at least one employee trained to work with the program. The buyer then goes to that dealership, picks out a particular car, test-drives the vehicle and is shown a Costco member-only price sheet. If the buyer is satisfied, the purchase is made.

For this protected experience, the Costco Auto Program charges the new-car buyer nothing, and the retailer gets no sales commissions. The program is funded by marketing fees that dealerships pay Costco.

The Costco price

"The Costco prices are very good prices," says Edmunds.com's Reed. "For some vehicles, probably close to within $500 of the lowest price possible."

The Costco prices are determined by what Costco's Paolino calls a "pricing matrix." That matrix uses information gleaned from Kelley Blue Book, Edmunds.com and other pricing websites, along with comparable-shopping reports and other elements, to determine "pricing modules" for each dealer. There is no one nationwide Costco price, and dealers certified in the program aren't obligated to accept one another's pricing.

"Our pricing is extremely competitive," Paolino says. "It's usually about $1,000 less than kbb.com (Kelley Blue Book) and Edmunds.com's TMV (True Market Value)."

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"It's best for mainstream brands," adds Reed, citing vehicles from carmakers such as Toyota, Ford, Hyundai, Nissan and Chevrolet. "When you decide to go to premium brands or for unusual orders or where availability is restricted, there's only so far that dealerships are willing to go."

In other words, it's easy to use the Costco program for commodity products such as the Honda Accord LX sedan, which has limited factory options and is stocked by the dozens by dealers. But Porsche dealers don't have lots full of new 911 sports cars, and 911 buyers often want to tailor their cars to their high-end tastes from the long list of options that Porsche offers.

That doesn't mean luxury brands such as BMW, Lexus, Mercedes-Benz or even Porsche don't participate in the Costco program. They do, and the Costco pricing on their machinery can be keen. But even those dealers want to move the iron that's in stock on their lots, not special-order vehicles for razor-thin profits.

"For hard-to-find things, it's almost better to go on your own," asserts Reed. Still, reports Paolino, at least one Aston Martin was bought through the program.

Getting the most from Costco

The Costco Auto Program doesn't offer much help in deciding which new car is right for you. You still need to use resources like MSN Autos, Consumer Reports and Car and Driver for research. You may also have to go to some dealerships for a few test drives, even if that means testing your resistance to pressure from salespeople to make a decision then and there. This is a big purchase, and getting it right means more than looking for the best price on a car you assume will be right for you.

If you're leasing a new car, knowing the Costco price at a dealership is also useful. After all, leases are based on the selling price of the vehicle, its predicted residual value at lease end and the price paid for it by the leasing company. Reducing the selling price will show up in the cost of the lease.

The Costco Auto Program also has some muscle with the dealers if the transaction develops problems. "We have a whole division called 'Member Advocacy,'" explains Rick Borg, the vice president of the Costco Auto Program. "We follow up with the dealer and the member to make sure things go well. We're a service to our members, and it's part of their membership at Costco."

In fact, says Costco's Paolino, the dealers certified in the program are "shadow-shopped" regularly to ensure they're performing as they promised they would. And, she adds, about a dozen or so dealers a year are expelled from the program.

"We try and correct mistakes and make sure the members got the right deal," she continues. "We try and work with the dealers through mistakes once or twice. But after that, it's time to say bye."

However, Costco doesn't offer any price guarantees. So the program's advocacy has its limits.

The best deal

About 250,000 cars were bought through Costco last year. Yet while the Costco Auto Program is huge, it doesn't necessarily cover every brand in every market. It's rare, but it may be that there are no Costco certified dealers in your area for the car you want. And it may be that the closest certified dealer is too far away.

But if you're a Costco member, using the Costco Auto Program makes sense most of the time. Even if you're a silver-tongued negotiator, having the Costco price in hand provides a good jumping-off point for the down-and-dirty of hammering out a deal.

Be honest with yourself. If you're the type of person who dreads buying a new car, then the protected experience of a Costco Auto Program transaction has true value. You still need to be aware of your financing options before going to any dealer -- always shop for the money first. You should also know the value of your trade-in and recognize that as a separate negotiation that may be unavoidable.

The best new-car prices still come from hard-core research and flinty negotiation between buyers and multiple dealers in a competitive environment. But that route isn't for everybody. Costco's price might not be the ultimate low price, but a pain-free transaction at a very good price can often be worth a couple hundred bucks.