Destination fees—those non-negotiable charges tacked onto new car purchases—are rising faster than inflation, adding unexpected costs for buyers. Here’s what you need to know about these fees and how to navigate them:

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What Are Destination Fees?

• Definition: Fees that cover the cost of delivering a car from the factory or port to the dealership.
• Placement: Often listed as "destination" or "inland freight and handling" charges, typically hidden in fine print on window stickers or automaker websites.
• Non-Negotiable: Buyers can’t opt out of these fees, unlike optional features like upgraded sound systems or leather seats.

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Key Findings

Fee Inflation:
- Average fees rose from $839 in 2011 to $1,244 in 2020—more than 2.5x the rate of inflation.
- Some brands, like Stellantis (formerly Fiat Chrysler), increased fees by up to 114% for certain models.

Top Offenders:
- 2021 Ford F-150: $1,695 destination fee.
- Jeep Cherokee: Jumped from $995 in 2016 to $1,495 in 2019.

Least Affected:
- Luxury brands like Audi, BMW, Lexus, and Mercedes-Benz increased fees by less than 20%, keeping pace with inflation.

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Why Are Fees So High?

• Automakers claim increased shipping costs and logistics challenges, including:
• A shift to larger vehicles (SUVs and trucks).
• Fewer vehicles per carrier, raising transport costs.
• Consumer advocates argue these fees are a profit-padding tool, allowing manufacturers to raise revenue without increasing the sticker price.

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Issues With Transparency

• Opaque Pricing: Automakers don’t clearly disclose what the fees cover or how they’re calculated.
• Lack of Accountability: Manufacturers are vague about whether fees actually reflect delivery costs.
• Consumer Misunderstanding: Buyers often don’t realize these fees aren’t optional, unlike optional features.

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How to Navigate Destination Fees

Know the Fees:
- Look for the last line item on the car’s window sticker, just above the "total MSRP."
- Fees may not be included in online or advertised prices—check the fine print.

Compare Models Carefully:
- Ensure price comparisons include destination fees and other charges for an accurate assessment.

Negotiate Smartly:
- Focus on the out-the-door price (total cost, including fees and taxes) rather than debating delivery fees directly.
- Haggle for a lower overall price to offset fees—dealers expect negotiation.

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Advocacy

• Transparency Call: CR is urging automakers to include destination fees in advertised prices to help consumers make informed decisions.
• Fee Disclosure: CR highlights destination fees in its car reviews to ensure buyers are aware of total costs upfront.

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Bottom Line

Destination fees are unavoidable, but understanding them and negotiating effectively can help you save money on your next car purchase.

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