It’s not clear whether those earlier talks were hampered by the outbreak of the coronavirus pandemic. Maxwell told Automotive News in August that Costco executives regularly discuss potential partnerships with automakers on incentives, including on CPO vehicles. But in 2022, as dealers in the Costco network continued to struggle with the limited allocation of new vehicles, the Costco Auto Program went back to expanding incentives for used vehicles, he said.
Volvo was the first automaker to partner with Costco Auto Program in 2007 on an incentive for new vehicles with structured pricing. Since then, the two companies have offered about 12 different vehicle incentives, Maxwell said. Automotive News. And both sides came to the same conclusion in 2022, he said: why not design an incentive program for CPO vehicles, which are desirable to buyers and not nearly as scarce as new cars?
“Our dealers are no different from what dealers in general experience [with] inventory availability,” said Maxwell.
It made sense to partner with Volvo on such an effort, Maxwell said, because the automaker and the Costco Auto program already had that “very good working relationship.” Volvo’s vehicles are also a popular option for Costco members — usually the No. 1 or No. 2 luxury brand they request, he said.
Offering used vehicle deals to those members, however, is not new to Costco. The program has long provided pre-agreed member prices for certified used vehicles through authorized dealers in its network. Costco’s first used vehicle programs launched in 2006 in some markets.
If the new Volvo CPO promotion matches the success of its other promotions, it seems reasonable that Costco would aim to offer other automaker-specific CPO incentives, Maxwell said. He did not disclose any other brands that Costco Auto Program may already be working with to develop such incentives.
“We are in talks with all of our OEM partners about all of our offerings, and as this is a new offering, everyone is taking a look,” said Maxwell.