Make us your home page

Understanding the mysterious destination fee

What's a destination charge, and why do you have to pay it? The charge isn't usually part of the advertised price, but it can add several hundred dollars or more when you buy a new car or truck.

It covers the cost of shipping the vehicle from the plant and what the dealership did to get it ready for you. Depending on the manufacturer, that can range from a wash and mechanical inspection to hand-detailing and a demonstration of features.

"The destination fee is set by the manufacturer," said Forrest McConnell, chairman of the National Auto Dealers Association and owner of McConnell Honda and Acura in Montgomery, Ala. "There's no markup for the dealer."

That makes it the one part of a car's price that's not negotiable.

Destination charges vary from one company to another, and from one vehicle to another within an automaker's lineup. For instance, says Ford charges $825 for a Fiesta subcompact and $1,195 for an F-150 pickup. Destination charges for imported vehicles are generally in the same range as domestics, despite having traveled farther. The charges on a Japanese-made Honda Fit and German-made BMW 320i are $790 and $925, respectively.

Federal law says the destination charge for a vehicle can't vary from one part of the country to another. Whether you buy a Cadillac ATS a mile from the assembly plant in Lansing, Mich., or 2,200 miles away in Beverly Hills, Calif., the fee remains $925.

That's because buyers from around the country used to flock to Detroit to see their car built and buy it for hundreds of dollars less than at their neighborhood dealership, automotive journalist and historian Mike Davis said. Local dealers objected, so Congress mandated uniform fees.

"Everybody pays the same destination charge for a given vehicle," chief analyst Jesse Toprak said. "For the consumer, there's no point wasting time trying to negotiate it. Even if you don't like it, you have to let it go. It's like death and taxes."

Understanding the mysterious destination fee 04/03/14 [Last modified: Thursday, April 3, 2014 4:21pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Federal agencies demand records from SeaWorld theme park


    ORLANDO — Two federal agencies are reportedly demanding financial records from SeaWorld.

    Killer whales Ikaika and Corky participate in behaviors commonly done in the wild during SeaWorld's Killer Whale educational presentation in this photo from Jan. 9. SeaWorld has been subpoenaed by two federal agencies for comments that executives and the company made in August 2014 about the impact from the "Blackfish" documentary. 
[Nelvin C. Cepeda/San Diego Union-Tribune/TNS]
  2. Legalized medical marijuana signed into law by Rick Scott

    State Roundup

    TALLAHASSEE — Gov. Rick Scott on Friday signed into law a broader medical marijuana system for the state, following through on a promise he made earlier this month.

    Gov. Rick Scott signed legislation on Friday that legalizes medical marijuana in Florida.
  3. Line of moms welcome Once Upon A Child to Carrollwood


    CARROLLWOOD — Strollers of all shapes and sizes are lined up in front of the store, and inside, there are racks of children's clothing in every color of the rainbow.

    At Once Upon A Child, you often as many baby strollers outside as you find baby furniture and accessories. It recently opened this location in Carrollwood. Photo by Danielle Hauser
  4. Pastries N Chaat brings North India cuisine to North Tampa


    TAMPA — Pastries N Chaat, a new restaurant offering Indian street food, opened this week near the University of South Florida.

    The menu at Pastries N Chaat includes a large variety of Biriyani, an entree owners say is beloved by millions. Photo courtesy of Pastries N Chaat.
  5. 'Garbage juice' seen as threat to drinking water in Florida Panhandle county


    To Waste Management, the nation's largest handler of garbage, the liquid that winds up at the bottom of a landfill is called "leachate," and it can safely be disposed of in a well that's 4,200 feet deep.

    Three samples that were displayed by Jackson County NAACP President Ronstance Pittman at a public meeting on Waste Management's deep well injection proposal. The sample on the left is full of leachate from the Jackson County landfill, the stuff that would be injected into the well. The sample on the right shows leachate after it's been treated at a wastewater treatment plant. The one in the middle is tap water.