Buying a car from the factory sounds expensive, but it can actually save you money. Here’s how to do it.

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This Article reprinted with permission of nerdwallet,

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With less supply of vehicles at dealerships, more buyers are ordering cars from the factory.

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In return for waiting a few weeks or months, you get exactly what you want. In the current market, you are likely to save money as well.

While Americans have long been accustomed to finding a car and driving it the same day, “build-to-order” is common in Europe, and is the method adopted by electric carmakers such as Tesla, Lucid and Rivian. Now that supply chain delays have caused a bidding war for vehicles landing on dealer lots, build-to-order is having a moment in the US

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Ford now allows buyers to order some of the popular models online and have them delivered to dealerships. 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.

“It’s the hottest move right now,” says Matt Jones, director of corporate marketing for automotive shopping site TrueCar. “People tend to get exactly what they want as opposed to buying what’s available.”

Don’t run into this auto market: 5 mistakes to avoid if you are buying a car now

Is Build-to-Order Cheap? This may happen

Ordering a car from the factory can also help you avoid the markup from the dealer, says Ron Montoya, senior consumer advice editor and content strategist for car research site Edmunds.

Montoya’s aunt was recently shopping for a Subaru Crosstrek and was offered a car at a local dealer for $3,000 plus the sticker price. Instead, he asked the dealer to order one from the factory and paid only the sticker price. “And these days, the sticker price is a good price,” he noted.

Reading, What to do if your car is totaled

Actually, The current market is brutal, Casual buyers are competing with drivers who have lost a car to theft, accident or major mechanical problem. Some buyers are taking advantage of the increased trade-in prices to recover thousands over the MSRP they are paying on a new ride.

Factory orders allow both buyer and seller to take a deep breath.

To a dealer, a special order represents a certain sale rather than the risk that you might find your ideal car elsewhere.

For the consumer, build-to-order gives time to reflect and make wise choices. Kelley Blue Book orders a custom-built vehicle a “smart life hack” because “it takes 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.

Buyers typically order a vehicle in two ways:

Before signing anything, get these details from the dealer:

stipulated time frame: The dealer can’t give you an exact delivery date, but its ordering system should be able to give you an estimate. If the delivery date is too far, consider moving elsewhere, as manufacturers allot cars to dealerships at different rates.

Change: Explain the points of no return. Perhaps months before delivery, you may change your mind about colors or options. You may be able to withdraw completely by a certain date.

Deposit: Usually it ranges from $500 to $1,000. Many dealers don’t actually cash the check or run a credit card number because the deposit is really “only to prove that the customer has glue at play,” Jones says. Ask what happens to your deposit if you decide to back out.

Documentation: Ask what paperwork you will receive after placing your order and how to track your vehicle’s arrival. Often, dealerships provide a build order sheet that lists the model, last negotiated price, and estimated delivery date.

Price: Although it is not binding, agree on a purchase price and ask that the paperwork you receive reflect that agreed amount. This should include the fixed price of the car, any additional accessories installed by the dealer that 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, make clear what is reflected in the price and what happens if they change, according to Jones.

before your vehicle arrives

Before you drop off your car at the dealership, make sure you track it down in a timely manner or follow up with the seller. Once you get the delivery date:

Arrange financing. Seems like Pre Approved Car Loan, You’ll avoid surprises with your credit and a rate the dealership will try to beat.

Get your trade-in evaluated. The dealership won’t give you a trade-in price until you’re ready to sign the papers on your new car. If you are considering doing business, 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 when 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 keep it. Grab it as soon as possible, Montoya advises.

Inspect the car. Check the car to make sure the vehicle matches what you ordered and that it hasn’t been damaged in transit.

Talk about any trade-in. Ask the dealer to evaluate your used vehicle and show them any competitive offers. Keep in mind that the sales tax savings of the business can be significant.

Review the deal with the Finance Office. If the agreed value is not respected, ask why. You are not obligated to buy the vehicle on new terms, just as the dealer is not obliged to honor the old vehicles. You can walk away, or you decide that the difference in price isn’t worth the trouble of scrapping the deal and starting the whole process all over again.

Read further: 5 Ways to Get a Bigger — and Faster — Tax Refund

more from NerdWallet

Philip Reid writes for NerdWallet. Email: [email protected] Twitter: @AutoReed.


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