This article is reprinted by permission from NerdWallet.
With vehicles in short supply at the dealership, more shoppers are ordering cars from the factory.
In return for a wait of a few weeks — or months — you get exactly what you want. In the current market, you’re likely to save money as well.
While Americans have long been accustomed to finding a car and driving off the same day, “build-to-order” is common practice in Europe, and it’s the method embraced by electric carmakers such as Tesla , Lucid and Rivian . Now that supply chain delays have created bidding wars for vehicles that land on dealer lots, build-to-order is having a moment in the U.S.
Ford now allows buyers to order some popular models online and have them delivered to a dealership. The company says it took 74,000 new vehicle retail orders in November — an increase of 64,000 over the previous November.
Most dealerships are eager to take special orders as well.
“That seems to be the hot move right now,” says Matt Jones, director of corporate marketing for automotive shopping site TrueCar. “Folks want to get exactly what they want as opposed to buying what’s available.”
See: Don’t get fleeced in this auto 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 might also help you avoid markups from the dealer, says Ron Montoya, senior consumer advice editor and content strategist for car research site Edmunds.
Montoya’s aunt recently was shopping for a Subaru Crosstrek and was offered a car on the lot at a local dealer at $3,000 over the sticker price. Instead, she asked the dealer to order one from the factory and paid only the sticker price. “And these days, sticker price is a good price,” he notes.
Read: What to do if your car is totaled
Indeed, the current market is brutal. Casual shoppers are competing with drivers who’ve lost a car to theft, accident or major mechanical issue. Some buyers are leveraging inflated trade-in prices to offset the thousands over MSRP they’re paying on a new ride.
A factory order allows both buyer and seller to take a deep breath.
For a dealer, a special order represents a sure sale rather than the risk that you find your ideal car elsewhere.
For the consumer, build-to-order gives time to reflect and make wise choices. Kelley Blue Book calls ordering a custom-made vehicle a “smart life hack” because “it cuts you out of 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.
Shoppers typically order a vehicle one of two ways:
Configure a vehicle on the manufacturer’s website and submit your order through an assigned dealer. The MSRP you see is not guaranteed. Negotiations are handled through the dealer.
Negotiate and order directly with the dealer of your choice.
Before you sign anything, get these details from the dealer:
Time frame: The dealer can’t give you an exact delivery date, but its ordering system should be able to give you an estimate. Consider going elsewhere if the delivery date is too far out, as manufacturers allot cars to dealerships at different rates.
Changes: Clarify the points of no return. With perhaps months before delivery, you may change your mind about color or options. You may be able to back out completely by a certain date.
Deposit: Typically this is $500 to $1,000. Many dealers don’t actually cash the check or run the credit card number since the deposit is really “just to prove the customer has glue in the game,” Jones says. Ask what happens to your deposit if you decide to back out.
Documentation: Ask what paperwork you’ll receive after placing your order and how to track your vehicle’s arrival. Often, dealerships provide a build order sheet that lists the model, final negotiated price and estimated delivery date.
Price: While it’s not binding, agree on the purchase price and ask that the paperwork you receive reflect that agreed-upon amount. It should include the negotiated price of the car, any dealer-installed extras that you agree on, taxes, title and license. Ask if this is the amount you’ll pay when the vehicle arrives. While rebates and incentives are rare these days, according to Jones, clarify which are reflected in the price and what happens if they change.
Before your vehicle arrives
Before your car lands at the dealership, make sure you track it periodically or follow up with the salesperson. Once you get a delivery date:
Arrange financing. Find a preapproved car loan. You’ll avoid surprises with your credit and have a rate for the dealership to try to beat.
Have your trade-in appraised. A dealership won’t give you a trade-in price until you’re ready to sign papers on your new car. If you’re considering trading in, quotes from internet retailers such as Carvana can help you get the most value for your car.
Ask about incentives. It doesn’t hurt to check the manufacturer’s website or ask your sales representative in case new incentives are available.
Check out: 10 top cars of the year
When your new vehicle arrives
Act quickly. If you have a delivery date or get a call from the dealership, ask if the car will be marked as sold and how long the dealer will hold it. Grab it as soon as you can, Montoya advises.
Inspect the car. Look the car over to make sure the vehicle matches what you ordered and that it hasn’t been damaged in transit.
Talk over any trade-in. Ask the dealer to appraise your old vehicle and show them any competing offers. Bear in mind that the sales tax savings of trading may be significant.
Review the deal with the finance office. If the agreed-upon price isn’t honored, ask why. You aren’t obligated to buy a vehicle on new terms, just like the dealer isn’t obliged to honor the old ones. You can walk, or you may decide the difference in price isn’t worth the hassle of scrapping the deal and starting the whole process over again.
Read next: 5 ways to get a bigger — and quicker — tax refund
More From NerdWallet
Don’t Spend a Dollar to Save a Nickel on Gas
Let the ‘Out-the-Door Price’ Drive Your Next Car Negotiation
5 Mistakes That Can Lead to a Bad Car Loan
Philip Reed writes for NerdWallet. Email: email@example.com. Twitter: @AutoReed.
Leave a Reply