A few years ago, we’d have told you that ordering a car directly from the factory was possible but difficult, often costly, and involved a long wait. But not so today. Due to current supply shortages, buying almost any car can be difficult, often costly, and can involve a long wait. Custom ordering changes those factors, but less than it used to.
Under normal conditions, Americans became accustomed to buying a car from dealer stock. Traditionally, we map out some idea of what we want through online research. Then we negotiate with a dealership to get as close as we can to our desires and often drive our new car home the very same day we first set foot in the dealership.
But car shopping doesn’t work that way everywhere. Many Europeans are accustomed to custom-ordering the exact car they want, then waiting for it to be built and shipped. Waiting, in some cases, months.
That approach has historically been rare in the U.S. But it has long been an option.
The forces reshaping the automotive industry today make it a far more common, far more appealing option. Throughout 2021, dealerships found themselves short of many popular models due to production hurdles caused by a world-wide microchip shortage. With fewer models in stock to choose from, more buyers started ordering the car they want directly from the manufacturer.
Many in the automotive industry would like to keep things working that way. A build-to-order model would allow dealerships to spend less money on unneeded inventory. It would save automakers storage fees and never leave them needing to discount a model because it was produced faster than it was selling.
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It can also be the right option for shoppers. A factory order allows you to get precisely the car you want, in the color combination you desire, with the options you prefer. We’ll walk you through how the process works and how to decide whether it’s right for you.
Why order a car from the factory?
Most of us dream about buying exactly the car we want. But in reality, we want things now or we need something to help us get around much sooner. A perfect car for you, down to the last detail, is likely not something your local dealership carries in stock. Getting the right color may mean compromising on the sound system. Getting the all-wheel-drive system you need for rough winters may limit you to boring colors.
Custom ordering your car allows you more control. To be clear, you may not be able to mix and match every option. Many automakers build certain features only as part of options packages. So, even when ordering a car custom-built, selecting the larger infotainment screen may require you to purchase a premium stereo you don’t care about.
But dealers stock the combinations they think customers prefer in their area. So, buying from dealer stock inevitably leaves you buying something typical, where ordering your own will allow you more freedom of expression.
Ordering a car can also get you access to packages that may not be popular where you live. If you’re pickup truck shopping in the rural West, for instance, there’s a good chance your dealer has a truck with the maximum tow package on the lot today. Many buyers in that area ask for that package. If you’re truck shopping in a more urban area in the East, they’re less likely to have that model in stock. If you still require a trailer to pull, you need to order a truck.
Lastly, ordering a custom-made car can be a smart life hack. It cuts you out of the emotional process of seeing a car in the flesh — well in the sheet metal in front of you — and wanting it now. Custom orders take time and allow you to make a careful financial decision. After all, this will likely be the second-largest purchase that you make, behind your home.
How to order a car from the factory
Ordering a car from the factory differs slightly from manufacturer to manufacturer.
Only a handful of manufacturers sell cars directly from factory to buyer. Tesla does so with 100% of its products. Volvo
does with its new electric vehicles, like the new C40 Recharge SUV that is ordered online and picked up at a dealership. Many electric startups, like Rivian and Lucid Motors
plan to follow the Tesla
For these manufacturers, the entire ordering process takes place online. The company’s website can guide you through ordering your car.
With every other automaker, there’s a dealership involved in the process. They may or may not be very visible in the process, but they exist. Some automakers allow you to follow through with nearly every step in the ordering process online, but a local dealership still handles the paperwork for your order and oversees delivering the car to you.
Some manufacturers have developed robust online ordering systems that allow buyers to complete the entire car purchase process online. With a system like Toyota’s
SmartPath system (called Lexus Monogram for Toyota’s luxury brand), shoppers can simply follow the steps on the manufacturer’s website to place an order, then wait for a local dealer to contact them to arrange delivery.
However, with most car brands, you will need to work with a dealership to complete your order.
Ordering a car: steps for success
- Get qualified. Work with your bank or credit union to qualify for a loan if you plan to use one.
- Choose dealership. Research local dealerships and choose one as if you would if you were planning to buy a car from dealer stock.
- Design your perfect car. Use the Build and Price feature on the manufacturer’s website to design the vehicle with the features that you want.
- Make a copy. Print the page with the final results. We’ll call this the “build sheet.”
- Schedule an appointment. Call your chosen dealership and explain that you’re custom ordering a car and would like to schedule an appointment.
- Visit the salesperson. Bring your printed build sheet to the salesperson, and request an “out-the-door price” for the vehicle.
- Haggle. Just as you would with any other car purchase, you can negotiate the out-the-door price. You have the right to negotiate every aspect of the transaction aside from state tag and title fees, just as you would with any other car.
- Entertain dealership financing offers. Feel free to entertain the dealership’s offer for financing, but only accept it if it beats what you obtained from outside sources.
- Sign the paperwork and get copies. When satisfied with the price, sign the buyer’s order, and get the sales manager to do the same thing. If you leave without a signed buyer’s order, your agreed-upon price isn’t locked in. Get a signed copy for yourself and leave a second signed copy with the dealership.
- Pay your deposit. The amount of the deposit varies by brand but is typically $1,000 or less. If you do not pay a deposit, you haven’t truly reserved the vehicle. The dealer has simply ordered one with a plan to sell it to you later. Pay this now so that the car is reserved for you. Make sure that the deposit is refundable in case you change your mind.
- Wait. You must now wait for your vehicle to be built and delivered. The dealership should keep you informed on timing, but feel free to call or email them for updates
- Negotiate your trade-in vehicle. If you are trading in a car, the dealership will want to complete this process only when your new vehicle arrives. Negotiating over the value of your trade-in should always be a separate process from negotiating the price of the car you are buying.
- Enjoy. Accept delivery of your new car.
Can you negotiate the price?
Manufacturers who sell cars directly to buyers, like Tesla, do not negotiate car prices.
But, when ordering a car from most manufacturers, you are still working through a dealership. You can negotiate a price just as you can when purchasing from dealer stock.
Don’t forget that when you order the car, you will need a copy of the buyer’s order with your signature and the sales manager’s signature on it to set the price. Most dealerships won’t attempt to renegotiate the price on delivery of the car, but some less ethical dealers might try. A signed agreement, complete with your deposit, will protect you from this.
In today’s market, buyers are typically paying sticker prices or even above for many cars. A world-wide shortage of microchips has left many cars in short supply. That has pushed prices higher than usual. Analysts don’t expect that situation to ease until mid-2022 at the earliest.
If you are trading in a car, the dealer will want to negotiate the value of your trade-in only when your new car arrives, and you are ready to take possession. Negotiating trade-in value should always be a separate step from negotiating price.
How much should you put down?
If you are financing your new car purchase, treat the loan process the same, whether ordering a car custom-built or buying one from dealer stock. Most financial advisers recommend putting down at least 20% of the loan’s value up front, if possible.
You will pay a reservation fee to reserve your car when you order it. This fee is separate, usually $1,000 or less. It does count toward the principal of your loan balance. But its primary purpose serves to reserve the car for you. If a dealer offers to let you out of the reservation fee, don’t accept.
The reservation fee helps to lock in your price. If you don’t pay it, an unethical dealer may choose to take the car as dealer stock and sell it to someone else for a higher price.
How long does it take for delivery?
This is a tricky question. There is no fixed time period. Everyone waits when ordering a car from the factory. Wait time depends on many factors, including a truck driver shortage. These and other factors are always in flux, especially during the COVID-19 pandemic.
The dealership can give you some idea of what to expect, but be prepared to wait several months and to have the delivery date change.
In a normal year, the factory might not be equipped to make the car precisely the way you ordered it for several weeks. The manufacturer must then ship the car from the factory, which could be on another continent.
Pandemic-related production delays have interrupted supply chains. A world-wide shortage of microchips has closed factories for weeks at a time. Dealers themselves are struggling to obtain some popular models.
At press time for this article, Fiat dealers stock more than 100 days supply of 500X SUVs to sell. There is a good chance a Fiat dealer could find the exact car you wanted already built. On the other hand, Kia
dealers have less than a week’s supply of Telluride SUVs to sell. Many Tellurides sell the day they reach the showroom. If you ordered a Telluride, you would likely need to wait months for it to be built.
Are you really getting the car straight from the factory?
When you order a car custom-built, a car factory does build that specific car just for you.
Some manufacturers ship that car directly to you. This is most common with Tesla and other electric car startups like Lucid and Rivian.
But most manufacturers ship the car to a dealership near you to handle the final delivery steps. They may ask you to pick it up at the dealership or arrange to have a dealership employee bring it directly to you.
Dealerships should know better than to try to tack on additional charges at the last minute. But it is always possible that an unscrupulous dealer will try to sell you an upholstery coating, wind deflectors, or some other added-cost extra installed at the dealership. Resist the temptation.
Advantages of ordering from the factory
There is only one major advantage to ordering a custom-built car. If you’re reading this article, you probably already know what it is. A factory order allows you to choose precisely the combination of colors, packages, and features you want.
Owning a car built to your specifications can also be an emotional thrill for many people.
Custom orders can also lead to a pleasant dealership experience. A little-known fact — dealers are making payments on the cars on their sales lots. Custom orders give the dealership the chance to earn a commission on a car they never have to store. Many are very happy to accept that business.
Drawbacks of ordering from the factory
The major drawback of ordering from the factory is the wait time. Even under the best circumstances, you can wait a month for your new car. In current market conditions, you might be waiting several months.
It might also prove impossible to get precisely what you want even through a custom order. Sometimes a manufacturer advertises a feature but struggles to get the parts necessary to build it.
Lastly, you can’t test drive a car that isn’t built yet. Some buyers prefer to inspect the actual car they’re planning to buy before putting money down.
Alternatives to ordering from the factory
The dealership coordinating your order may first try to find a car very similar to the one you want that has already been built, whether from their own stock or on the lot of another dealership. Let them.
Sometimes dealers can trade vehicles with other dealers of the same brand. A dealership in Massachusetts may locate a car much like what you’re looking for in Texas and have it shipped to them to sell to you. That will speed up the process, so there’s no harm in letting dealerships try.
What if you change your mind?
Every manufacturer has its own policies about canceling a custom order, but it is always possible to cancel. In some states, it’s even possible to return a car shortly after taking possession of it.
What may not be possible is getting your deposit back. Tesla deposits are nonrefundable. Some other automakers are more open to returning your deposit. You should read the special order paperwork carefully to find out before you sign.
Today’s hot-selling, limited-supply market also means that the dealership may have an easy time finding another buyer for the car you decline. So, if your financial circumstances change, talk to the dealership quickly. You may have options.
This story originally ran on KBB.com.