Thursday, February 15, 2007

Gotta love Costco. Toilet paper, TVs, and Financial Services?


It's been awhile since I last posted but a lot has happened over the last several months. I finally bought a car and will blog on that experience. As part of the car buying ordeal, I came to the realization that Costco offers a whole lot more than cases of soda, digital cameras, and toilet paper by the bulkload. They also offer a bunch of very practical services, including the ability to finance your car.

In buying my car, I knew I would get the best credit offers because my credit score is >780. So I browsed different options including the local brick and mortar banks (i.e. BofA, Wells Fargo, Washington Mutual), local credit unions (San Diego Credit Union, USE credit union), and online banks. I tried meta-searches like Lending Tree. For some reason, the best rate I could get on Lending Tree was 6.49% for a new car, 36 month payment term as provided by Capital One. I then looked at Costco.

Costco offered 5.64% for the same loan terms (i.e. new car, 36 month repayment) ONLY for executive members. The loan is also provided by Capital One. I'm only a regular member with membership dues of $50/year. However, the executive membership costs an additional $50 for a total of $100/year. With executive membership, Costco will give you 2% rebate on all purchases at Costco. This translates to having to purchase $2600 annually to make up that addtional $50 difference.

I was already sold on the executive membership as the $50 difference was more than made up for with the different loan rates (5.64% versus 6.49%). However, Costco makes it a no-brainer. If you do NOT spend enough at costco to make up the additional $50 difference, they will refund you the remainder of that extra $50! It's a no-lose situation.

Not only does executive membership give you 2% rebate and a lower rate on an auto loan, but there are several other perks that executive members get. I'm starting to sound like a Costco commercial but really.... what other company provides such no-risk terms! Something about those companies in the Northwest that just provide fantastic service and products (see Nordstrom, R.E.I., Costco). Extra bonus. Get a Costco True Earning American Express card and you get 3% rebate on travel, 2% on dining out, 1% on everything else (this is in addition to your 2% rebate on costco purchases if you are executive). Awesome.

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