Destination Charges Are Soaring: What Are They and Why Now?

If you’re looking to purchase a Chevy Silverado 1500 or Ford F-150, you’ll have a little charge tucked down at the bottom of the window sticker. It is the “destination charge.” It is non-negotiable-always has been. But it has never been as high as it is now. Any light-duty pickup truck today has a $1,695 destination charge. 

Destination charges have tripled the rate of inflation

destination fees
Dealership salesman | Getty

According to Consumer Reports, transportation from the factories to dealerships is triple the rate of inflation over the last decade. And that is reflected in a transportation fee also found on the sticker. So then what is a destination charge, or delivery charge, if transportation is already covered? 

One explanation is that transporters can load fewer trucks and SUVs because they’re larger than cars. So the destination charge covers the difference between 10 cars able to be shipped while only maybe with or six trucks make it onto the transporter. It seems rather cockeyed, but that is about as close as we can get to what a destination charge is. 

A Jeep Wagoneer destination charge is now $2,000

destination fees
Another happy customer paying $1,695 in destination charges | Getty

But that doesn’t explain the rate it has spiked, and that a Jeep Wagoneer or Grand Wagoneer has $2,000 in destination charges. Nor does it explain why in five years the destination charge increased from $995. Others have also noticed, to the extent that lawsuits against Ford, General Motors, and Stellantis, have been filed over it. 

Sometimes, in this age of ordering online, the destination charge isn’t even enumerated. There might be an asterisk with the fee or fees in the six-point fine print. Prices for Stellantis vehicles, formerly Fiat Chrysler, ramped up Jeep fees almost 100-percent between 2011 and 2020. Fiat, which has seen sales plummet, saw fees rise 114-percent since 2012. Ram trucks saw a rise of almost three-quarters. 

Some say destination charges even out shipping to different regions

destination fees
Ford salesman with buyer | Getty

Some dealers try to justify destination fees by telling customers manufacturers increase shipping charges across the country. This is done so that the amount is the same for any region. That keeps all sticker prices even across all marketing and advertising campaigns. 

Of course, to the average consumer, it looks like a sly way of keeping MSRP prices low. Most other consumer products bake the price into the cost of the item. You never really see what delivery costs are applied. The price is the price, other than sales tax in some states. 

“We make sure they are competitive and fair” 

Car dealership salesmen
Car dealership salesmen | Getty

A GM spokesperson recently told Automotive News that the company looks “at all input expenses across each mode of transportation and each vehicle cost is calculated by type. It typically costs less to transport smaller vehicles versus larger vehicles. Therefore, the model mix comes into play as the larger the vehicle you ship, the higher the expense. We reevaluate these charges periodically in order to make sure they are competitive and fair.” 

Some call it a “complicated calculation.” But it sure is easier to tack on extra fees when supplies are so thin. It is like “if you want it then pay up, or find one at a different dealership.” From dealerships surveyed by Automotive News, most say the fees are not questioned by buyers.