The Pros and Cons of Ordering a New Car From the Factory

The traditional car buying process has undergone significant changes due to recent global supply chain issues stemming from the pandemic, which began in 2020, and ongoing trade tariff threats. Canadian car buyers can no longer expect to find a full range of models, trims, equipment, and colours readily available at their local dealer. Many dealers are now limiting their inventory, making it a challenge to find a new vehicle that meets your exact specifications.

Despite these challenges, ordering from the factory is the best path for buyers who want their next new vehicle built to their exacting standards.

Why Should You Order a Car From the Factory?

Dealers generally prefer buyers to choose from their existing inventory for several reasons. Firstly, it allows them to quickly turn over their stock, which boosts their cash flow. Secondly, it reduces the risk of holding onto a vehicle that may become less desirable over time.

Local market preferences also influence what they keep on the lot. This is also true for many automakers that build vehicles tailored to a country's market. Canadian models may include features to accommodate our colder climate, such as heated seats and a heated steering wheel, which are often absent in the American version.

Many automakers also build vehicles that combine various packages based on previous sales data. This approach enables them to tailor vehicle offerings to specific regions, thereby reducing inventory costs and increasing profitability; however, it limits the choices available when you visit your local dealer. These product planning decisions can significantly impact the available options for models, colours, trims, packages, and equipment.

Geography also plays a role. Where you live in Canada may affect what your local dealers will have on hand to buy. If you reside in a rural area, your dealer may have a wide selection of pickups and SUVs in stock, but not many sports cars. The same applies to electric vehicles (EVs) in Canada, where dealers in provincial governments offering EV purchase incentives are likely to have an EV in stock. 

How Do I Order a Car From the Factory?

In the past, it was possible to place a factory order, although the delivery process was lengthy and time-consuming. Today, many automakers have made custom orders less complicated for buyers who want to get the new vehicle of their dreams.

In Canada, ordering a car from the factory varies slightly among manufacturers. Canadian law often requires vehicles to be sold through franchised dealerships rather than being sold directly by the manufacturer. But several Canadian manufacturers allow direct factory orders. Ford, General Motors, Honda, and Toyota have manufacturing plants in Canada, enabling factory orders to be placed through their dealerships.

Some manufacturers have developed online ordering systems that allow buyers to complete the entire car purchase online. Tesla does so with all of its models, with many EV companies like Rivian and Lucid following the same approach. For these manufacturers, the entire ordering process is conducted online, with the company's website guiding you through the process for your vehicle.

For most automakers, factory orders are typically placed through a dealership, rather than directly with the manufacturer. You'll work with the dealer to configure your desired vehicle, and they'll then submit the order to the manufacturer on your behalf. Some automakers allow you to complete nearly every step in the ordering process online. However, a local dealership still handles the paperwork for your order and oversees the delivery of the car to you.

If you want to combine a holiday with your next vehicle purchase, many foreign car manufacturers, including BMW, Porsche, Volvo, and others, offer European delivery programs. These programs allow you to purchase a vehicle from your local dealership, travel to Europe to pick it up at the factory, enjoy a European road trip with the car, and then have it shipped back to Canada. 

Whatever path you choose, here are the six typical steps to ordering a car from the factory:

1. Build Your Vehicle

Ordering a vehicle from the factory isn't all that different from buying a car the traditional way. The first step is typically to use the automakers' online vehicle configurators, where you can select the make, model, trim, colours, options, and packages you want. This allows buyers to analyze their needs and create a budget before choosing the car that best suits them. 

2. Locate a Dealership

The manufacturer's website will likely connect you with a local dealership to finalize the order. The dealer's sales staff will assist you in placing the order and guide you through the financing process that accompanies it. 

3. Negotiate the Price

When it comes to negotiating the price, it's important to note that while manufacturers that sell cars directly to buyers, like Tesla, do not negotiate car prices, most automakers will work with their customers to finalize the price, including any applicable rebates, incentives, and taxes, just as you can when purchasing from dealer stock.

When you factory order the car, remember to keep a copy of the buyer's order with your signature and the sales manager's signature on it to set the price. 

If you plan to trade in your existing car, note that the dealer will typically negotiate the value of your trade-in only after your new vehicle arrives and you are ready to take possession.

4. Secure Your Order

You'll likely need to make a deposit to secure your factory order. 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.

5. Wait for Delivery

The dealership can provide you with a realistic estimate of the delivery timeline. Be prepared for a wait of three to six months, as the delivery date is subject to change due to various reasons. The factory may not be immediately ready to produce the car exactly as you ordered, which could result in a wait of several weeks. High-demand models often have longer delivery times. Plus, once the car is produced, the manufacturer must ship the vehicle from the factory, which could be located on another continent.

6. Take Delivery

Once the vehicle is built and delivered to the dealership, you'll complete the purchase and take delivery. 

What if You Change Your Mind?

Every manufacturer has specific policies regarding the cancellation of factory orders. While it's always possible to cancel, the possibility of a refund depends on the terms of the dealership's agreement and the circumstances surrounding the order cancellation. 

Excessive build time could be a reason for refunding a deposit. Some automakers and dealerships are more open to returning deposits, but the vehicle's unique configuration can influence the decision, as the dealer may struggle to resell it. Carefully review the factory order paperwork to ensure you fully understand the details before signing.

What Are the Cons of Ordering a Car From the Factory?

While you gain more control and personalization, the major drawback of ordering from the factory is the wait time. 

It may also prove disappointing to discover that you can't get precisely what you want, even though it's a custom order directly from the factory. 

Lastly, it's essential to note that you can't test drive a car that has not yet been built. Some buyers prefer to inspect the actual vehicle they plan to purchase before putting down a deposit. The alternative is to test drive a car at the dealership that is as close as possible in specification to the vehicle you are ordering.

Is Ordering a New Car From the Factory Right for You?

Like buying a custom home, ordering a car from the factory will give you the best chance to get the product customized exactly how you want it. It also removes the emotion of seeing a vehicle on the dealer lot and wanting to drive it off the lot the same day. 

While you can get the exact car you want, you may have to compromise on some features due to package or production limitations. Alternatives to ordering from the factory, such as dealer trades or waiting for a vehicle that is in the process of being delivered from the factory to the dealership, can offer a quicker solution. Ultimately, factory ordering is best for buyers who value customization and are willing to wait.