How to buy a car from the factory and save money
As vehicles are scarce at the dealership, more and more buyers are ordering cars from the factory.
In exchange for waiting a few weeks – or months – you get exactly what you want. In today’s market, you are also likely to save money.
While Americans have long been used to finding a car and driving it the same day, “build to order” is common practice in Europe, and it’s the method adopted by electric car makers such as Tesla. , Lucid and Rivian. Now that supply chain delays have created bidding wars for vehicles landing on dealer lots, build-to-order is having a moment in the U.S.
Ford is now allowing buyers to order certain popular models online and have them delivered to a dealership. The company says it took 74,000 new vehicle retail orders in November, up 64,000 from the previous November.
Most dealers also accept special orders.
“That seems to be the hot move right now,” says Matt Jones, director of corporate marketing for automotive shopping site TrueCar. “People want to get exactly what they want rather than buying what’s available.”
See: Don’t be fooled in this car market: 5 mistakes to avoid if you’re buying a car now
Is build-to-order cheaper? It can be
Ordering a car from the factory can also help you avoid dealer markups, says Ron Montoya, consumer advice editor and content strategist for automotive research site Edmunds.
Montoya’s aunt was recently buying a Subaru Crosstrek and was offered a car on the lot at a local dealership for $3,000 more than the list price. Instead, she asked the dealership to order one from the factory and only paid the list price. “And these days the sticker price is a good price,” he notes.
Read: What to do if your car is totaled
Indeed, today’s market is brutal. Occasional buyers compete with drivers who have lost their car to theft, accident or major mechanical failure. Some buyers take advantage of inflated trade-in prices to offset the thousands of dollars over the MSRP they pay for a new ride.
A factory order allows both buyer and seller to breathe deeply.
For a dealer, a special order represents a guaranteed sale rather than the risk that you will find your ideal car elsewhere.
For the consumer, making to order gives time to think things through and make wise choices. Kelley Blue Book calls ordering a custom vehicle a “smart life hack” because “it saves you the emotional process of seeing a car…and wanting it now.”
How to place a factory order
If you have the luxury of waiting for delivery, here’s how to navigate the build-to-order process.
Buyers generally order a vehicle in two ways:
Configure a vehicle on the manufacturer’s website and submit your order through a designated dealership. The MSRP you see is not guaranteed. Negotiations are handled by the concessionaire.
Negotiate and order directly with the retailer of your choice.
Before you sign anything, get these details from the dealership:
Time range: The dealer can’t give you an exact delivery date, but their ordering system should be able to give you an estimate. Consider going elsewhere if the delivery date is too far off, as manufacturers assign cars to dealerships at different rates.
Changes: Clarify the points of no return. With maybe months before delivery, you may change your mind about color or options. You may be able to withdraw completely on a certain date.
Deposit: Typically, it’s $500 to $1,000. Many dealers don’t cash the check or run the credit card number because the deposit is really “just to prove the customer has some glue in the game,” Jones says. Ask what happens to your deposit if you decide to withdraw.
Documentation: Ask what documents you will receive after placing your order and how to track the arrival of your vehicle. Often, dealers provide a build order sheet that lists the model, final negotiated price, and estimated delivery date.
Price: Although not binding, agree the purchase price and ask that the documents you receive reflect this agreed amount. It should include the negotiated price of the car, any dealer-installed extras you agree to, taxes, title and license. Ask if this is the amount you will pay when the vehicle arrives. While discounts and incentives are rare these days, according to Jones, clarify which ones are reflected in the price and what happens if they change.
Before the arrival of your vehicle
Before your car lands at the dealership, be sure to track it periodically or follow up with the seller. Once you get a delivery date:
Arrange financing. find a pre-approved car loan. You will avoid surprises with your credit and have a rate that the dealer will try to beat.
Have your trade estimated. A dealer won’t give you a trade-in price until you’re ready to sign papers for your new car. If you’re considering a trade-in, quotes from online retailers like Carvana can help you get the most out of your car.
Ask about incentives. It doesn’t hurt to check the manufacturer’s website or ask your sales representative if any new incentives are available.
To verify: 10 best cars of the year
When your new vehicle arrives
Act quickly. If you have a delivery date or receive a call from the dealership, ask if the car will be marked as sold and how long the dealership will keep it. Take it as soon as you can, advises Montoya.
Inspect the car. Examine the car to make sure it is what you ordered and has not been damaged in transit.
Talk about any exchange. Ask the dealer to appraise your old vehicle and show them competitive offers. Keep in mind that trade sales tax savings can be significant.
Review the agreement with the finance office. If the agreed price is not honored, ask why. You are not obligated to buy a vehicle on new terms, just as the dealership is not obligated to honor the old ones. You can walk away, or you can decide the price difference isn’t worth dropping the deal and starting the whole process over.
Read next: 5 Ways to Get a Bigger, Faster Tax Refund
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Philip Reed writes for NerdWallet. Email: [email protected] Twitter: @AutoReed.