Car rates

How to order a car from the factory

It’s no secret that buying a car has become a challenge. Supply chain issues led to fewer cars being delivered to dealerships, which in turn led to fierce competition for these new cars. This leads to higher prices and a more limited selection. You may have to compromise and pay more for features you don’t want or give up features you had planned to buy, depending on what’s available out there when you’re shopping for a car.

Car dealership landGetty Images

But there is another way, which has been popular in Europe for years: you can order your car from the manufacturer rather than buying from the dealer’s available inventory. This strategy is so common around the world that Mercedes-Benz has announced the closure of 10% of its showrooms worldwide (but not in the United States). The German automaker will target 80% of its sales through this agency model, as it is sometimes called, by 2025. Brands under the Stellantis umbrella will do a similar move in Europe. Volkswagen and Audi already sell electric vehicles through the agency model, like their EV rivals Tesla, Rivian and Lucid.

It’s a trend that’s also gaining traction in the United States, thanks in part to the shopping habits shoppers turned to at the start of the COVID-19 pandemic. People started doing more car purchases online, including negotiation and paperwork processes, and dealerships even offered delivery services. In order to meet buyers where they are – in front of their screens – Ford instituted a direct ordering system. More than half of Ford’s retail sales in the United States in June 2021 came from direct orders.

Factory ordering is a little different from the door-to-door deliveries that dealerships offered during the pandemic and continue to offer in some areas. Many dealerships allowed buyers to buy vehicles that were in the lot, just like you would in person. Custom ordering means that the car does not exist until you place your order and it enters the schedule of the factory where that model is built. Then they build it just for you, based on what you ordered.

As with everything, there are pros and cons to ordering a vehicle from the manufacturer, and we’ll look at them below. But first, let’s review the ordering process.

How to order a car

Choose your dealer: In almost all cases, a dealer will act as an intermediary between you and the manufacturer. Check local dealer reviews and choose one to work with for this process. Good communication is especially important when ordering a car that will take a while to arrive.

Configure your car: this step is probably the most fun. Most manufacturers have a configurator tool on their websites that allows you to choose the colors, trims, engine, transmission, and features you want. Remember, this is a real car that costs real money, so be careful with your budget.

Pay a deposit: Most manufacturers ask between $500 and $1,000 as a deposit. This might be refundable if you opt out of the sale, but it might not be, depending on the manufacturer, so read the fine print.

Three people seated around a table in a car dealership

Three people seated around a table in a car dealershipGetty Images

Get documentation: Make sure you have the build sheet, estimated delivery date, and final negotiated price, including any discounts or incentives, on hand or at least in your inbox. You want to see all the features you selected and the price for each option and plan listed.

Learn the deadlines: The dealer or manufacturer should be clear about the deadlines. When should you finalize your order? How far in the process can you request changes? What is the last day you could opt out of the sale altogether? Will you lose your deposit at this time?

Be prepared to wait: you’ll typically wait about eight weeks for cars built in the United States and three months for cars built outside the country. Remember, though, that supply chain shortages don’t just mean fewer cars in the field; they also mean fewer parts for these cars at the factory. You may have to wait longer. Ford will allow you to track your car through the process once it has been assigned a VIN. Some manufacturers, like Toyota, allocate cars to order rather than building them from scratch. This means that you configure your car and they find a model somewhere that matches your specifications. Then they ship that car from wherever it is to a dealer near you.

Arrange financing: After paying the deposit and placing your order, you have time to research good interest rates. Check the deals available from the dealership against car loan rates from banks and credit unions.

Make sure you get insurance: Since you know everything there is to know about your car before it’s even built, you can also shop around for insurance.

Be Prepared: You’ll want to be ready to take delivery of your new car as soon as possible once it arrives at the dealership. You may need to go to the dealership to finalize the paperwork, or they may have a system for you to finalize the sale online and have it driven from the dealership to your doorstep. Depending on the terms of your contract, the dealer might try to resell it if you leave it lying around.

Check your new car carefully: If you’ve rented a car, you’re probably familiar with the routine. Look for dents, dings, scratches, and anything else that shouldn’t be there on a new car. But also make sure that everything that should be there is there. Check all the features on the build sheet against the car now in front of you.

Trade in: If you’re considering trading in your old vehicle, now is the time to go through this process with the dealership.

Why should you order

As we noted earlier, if you order a car, you get exactly what you want. You won’t have to pay for features you don’t want, or settle for a car that doesn’t have the features you need. You are not at the mercy of a dealer’s inventory.

A person who orders a Porsche online

A person who orders a Porsche onlineGetty Images

Speaking of which, you also potentially save money. Dealerships sometimes have more mid-level versions available, as they are generally popular. But if you’re on a budget or aren’t a picky shopper, you might just want the cheapest basic trim. Sometimes the only way to get that trim — and not be sold on features you don’t need — is to order it.

During the first two years of the COVID-19 pandemic, when car buying was most competitive, we saw new vehicles marked up several thousand dollars off their list price. If you order a car, you’ll pay the suggested retail price for the features you select, plus taxes, title and fees, minus the markup.

Ordering at home also relieves the pressure. You can make choices based on your needs and budget without a salesperson making “helpful” – and expensive – suggestions while you shop. There’s also no incentive to “act now”, since the car you’re about to buy doesn’t even exist yet. It’s car shopping like the turtle, not the hare.

Why you shouldn’t order a car

The biggest downside to ordering a car is the wait time. You’re looking at least a month before the car is in your driveway. If your old car is hopeless or was destroyed in an accident, you may not have the luxury of waiting a month or two for a new, custom car.

Ford factory

Ford factoryGetty Images

Ordering a car also doesn’t get you around the supply chain issues that everyone is familiar with. We’ve said this before, but it’s important to remember that it’s not just entire cars that are backed up, it’s the parts that make those cars, especially the microchips. There’s no way to predict if your three-week delivery time could be affected by another shortage of a critical auto part.

On the plus side, you’ll pay the sticker price with no markup. On the negative side, you will pay the displayed price with little room for negotiation. Additionally, many of the financing offers and incentives advertised are limited to a dealership’s current inventory. These will not apply to a car you order.

Building a car exactly to your specifications is rewarding. But be careful in your choices if you hope to resell it in a few years. Wild paint colors or expensive audio systems can limit your car’s resale market. Just because you paid extra for a feature you like doesn’t mean the next potential buyer will pay for that feature.

Car Ordering FAQs

  • Is it cheaper to buy cars from the factory? This may be the case, especially if you’re looking to buy a basic trim or avoid markups in a tight market.
  • How long does it take to order a vehicle from the factory? You’ll typically take delivery of your new car in three weeks from a factory in the United States and eight weeks from a factory outside the country. These lead times are currently higher due to supply chain constraints.
  • Can you pick up a car from the factory? A few select manufacturers allow you to collect the car from the factory, such as the Volvo Overseas Delivery program.
  • Can you order a car online? Yes, you can order a car online. But you’ll still go through a dealership to complete the ordering process and arrange for pickup or delivery of the vehicle.