Quick Facts About Buying Directly From the Manufacturer
- When ordering from the carmaker, you can negotiate the out-the-door price just as you would with any other car purchase.
- Ordering a custom-built car allows you to choose precisely the combination of colors, packages, and features you want.
- The major drawback of ordering from the manufacturer is the wait time.
Do you find yourself dreaming of a very specific car that is proving hard to find? If you’re willing to wait, you can order a car built to your exact specifications directly from the manufacturer.
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. While the automotive supply chain continues recovering from pandemic havoc, buying the exact car you want can be challenging, a bit more costly, and can involve a long wait. Custom ordering doesn’t change those factors, but it’s less complicated than it used to be.
We’ll walk you through how the process works and how to decide whether it’s right for you.
How Factory-Ordering Cars Became Popular
Americans are 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 possible to our desires and often drive our new car home the very day we first set foot in the dealership.
But car shopping doesn’t work that way everywhere. Many Europeans grew accustomed to custom-ordering the exact car they wanted and then waiting for it to be built and shipped. Waiting, in some cases, took months. That approach has historically been rare in the United States. But it has long been an option.
The forces reshaping the automotive industry today make it a far more common and appealing option. During the past few years, dealerships found themselves short of many popular models due to production hurdles caused by a worldwide microchip shortage. With fewer models in stock to choose from, more buyers started ordering the car they wanted 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.
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.
According to Cox Automotive, approximately 1 in 3 consumers are likely to order their vehicle and expect delivery to take about 10 weeks. Cox is the parent company of Kelley Blue Book.
Why Order a Car From the Factory?
Most of us dream about buying precisely the car we want. But in reality, we want things now or 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 custom-built car, 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, whereas 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 are 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 could 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 small handful of manufacturers sell cars directly from factory to buyer. Tesla does so with 100% of its products. Volvo does this 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, follow the Tesla model.
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 follow the steps on the manufacturer’s website to place an order and 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 prequalified. Work with your preferred bank or credit union to prequalify for a loan. This helps you know where your credit score stands and could potentially bring you negotiating power on the final price of the vehicle.
- Choose a dealership. Research local dealerships and choose one as 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. Your agreed-upon price isn’t locked in if you leave without a signed buyer’s order. Get a signed copy for yourself and leave a second signed copy with the dealership.
- Pay your deposit. The deposit amount 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 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 typically pay at least the manufacturer’s suggested retail price (MSRP) or sometimes more for specific models, even as the microchip shortage starts to resolve. Chipmakers are still playing catch-up on automobile orders. That has kept prices higher than usual.
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.
RELATED: Is Now the Time to Buy, Sell, or Trade-In a Used Car?
How Much Should You Put Down?
If you are financing your new car purchase, treat the loan process the same, whether ordering a custom-built car or buying one from dealer stock. Most financial advisors recommend a down payment of at least 20% of the loan’s value upfront, if possible.
When you order, you will pay a reservation fee to reserve your car. This fee is separate, usually $1,000 or less. It does count toward the principal of your loan balance. But its primary purpose is 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 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 period. Everyone waits when ordering a car from the factory. Wait time depends on many factors, including supply chain disruptions. These and other factors are constantly in flux.
The dealership can give you some idea of what to expect, but be prepared to wait several months, and the delivery date could change.
In a normal year, the factory might not be equipped to make the car precisely the way you ordered it for several weeks. Then, the manufacturer must ship the car from the factory, which could be on another continent.
Many custom buyers wait at least two to four months in the current market. Others may need to wait much longer. We’ve heard stories of wait times of up to nine months for select vehicles.
MORE: Car Safety Features 101: Everything You Need to Know
Are You Really Getting the Car Straight From the Factory?
When you order a custom-built car, the automaker does build that specific car just for you.
Some manufacturers ship that car directly to you. This is common with Tesla and other electric car companies like Lucid and Rivian, which lack traditional dealerships. Corvette buyers wanting VIP treatment can arrange to pick up their fresh-off-the-assembly-line Stingray at the National Corvette Museum for an extra fee. 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 for a dealership employee to 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.
Pros of Ordering From the Factory
There is only one major advantage to ordering a custom-built car. 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 is that 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 need to store. Many are very happy to accept that business.
Cons 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 though it’s a custom order. Sometimes, a manufacturer advertises a feature like a head-up display 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 plan to buy before putting money down.
Alternatives to Ordering From the Factory
The manufacturer and dealership coordinating your order may first try to steer you to an existing car very similar to the one you want, whether from their 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 can speed up the process, so there’s no harm in letting dealerships try.
What if You Change Your Mind?
Every manufacturer has 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 and ask questions to find out before you sign.
Today’s limited-supply market with higher interest rates also means that the dealership may not easily find another buyer for the car you decline. Still, if your financial circumstances change, talk to the dealership quickly. You may have options.
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Editor’s Note: This article has been updated since its initial publication.
