Sam’s Club, the warehouse division of Walmart, is getting into the car-buying business through a new partnership with TrueCar, giving members access to more than 10,000 TrueCar-certified dealers nationwide at launch.
That’s more than three times the nearest competitor in the warehouse club channel, as Sam’s Club puts it in a statement. No doubt that’s a jab at Costco Wholesale Corp., which has quietly jumped into the new and used car-selling business and sold nearly 400,000 vehicles last year.
Sam’s Club says its new program “provides guaranteed savings off the manufacturer’s suggested retail price (MSRP) on new cars and access to exclusive member savings on used cars.”
The entry of Sam’s Club and Costco into the car-buying market is a result of growing demand among consumers for the best price on a vehicle without having to haggle with dealers. Sam’s Club cited a recent survey by J.D. Power and Associates finding that two-thirds of “millennials” — those born between 1980 and 2000 — view buying a car as one of the most intimidating purchases they’ll ever make. Most also said the experience is worse than a trip to the dentist.
A basic annual membership at Sam’s Club costs $45. Sam’s has 653 stores in the United States and Puerto Rico.
“Whether it’s your first car or your sixth, the process of purchasing a vehicle can be a daunting task,” said Seong Ohm, senior vice president of merchandise business services at Sam’s Club. “We’ve chosen to launch our auto buying program with TrueCar based on their proven ability to bring car buyers a best-in-class experience. Our auto buying program will save members both time and money.”
Ohm said the company did not expect to make money on the TrueCar service, but it can serve as a factor in driving up membership. Both Sam’s Club and Costco make the bulk of their profit through membership fees.