Cars and Drivers

The Place That Sold the Most Cars in 2018 Is Not Even a Dealership

Paul Ausick

Published: March 28, 2019 3:17 pm

Last Updated: January 6, 2020 5:55 am

The largest retail automobile dealership group in the United States based on the number of new vehicles sold is AutoNation. Last year the company sold more than 538,000 new and used vehicles. That’s 20% less than the nation’s leading seller of new and used cars and light trucks.

The honor goes to Costco. The membership shopping club sold more than 650,000 vehicles last year (more than 533,000 were new) through its Costco Auto Program. That’s a new sales record and an increase of 25% from the total 520,000 vehicles sold in 2017.

The largest dealership in the United States when measured by total unit sales of new, used, fleet and wholesale vehicles is Penske Automotive group, which sold a total of 644,100 units in 2016, according to data collected by Automotive News. AutoNation sold more new vehicles (nearly 311,000) than any other U.S. dealership.

The Costco program also holds an annual three-month holiday season event with General Motors that posted a 22% year-over-year increase in 2018. Costco did not provide a total sales number for the event but did say that the total set another record.

Costco does not actually sell the cars. Affinity Auto, which manages the program for Costco, negotiates a vehicle price with local dealers who are then obligated to offer buyers a set price and forbidden from offering additional options. Any dealer or manufacturer incentives are typically included. Costco does not make any money on the sale.

What Costco gets out of the deal is membership revenue from satisfied customers, 96% of whom give the program high ratings for value, service and overall experience, according to the company. In some ways, Costco’s car-buying program resembles Amazon Prime, wherein the membership is based on free two-day delivery but offers other “free” benefits to keep consumers paying the membership fee. Costco has been selling cars this way since 1989.

During the 2018 holiday sales event, 47% of the vehicles sold were sport utility vehicles and 37% were trucks. During the rest of the year, SUVs accounted for 58% of sales and trucks just 8%. Passenger cars, recreational vehicles, motorcycles and powersports products like snowmobiles are also available through the Costco program.