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. 'Toxic' times: How repeal of Florida's tax on services reverberates, 30 years later

    State Roundup

    TALLAHASSEE — Long before Hurricane Irma attacked Florida, the state faced a troubled fiscal future that the storm will only make worse.

    Robertson says the tax debate is now “toxic.”
  2. Fewer Tampa Bay homeowners are underwater on their mortgages

    Real Estate

    The percentage of Tampa Bay homeowners underwater on their mortgages continues to drop. In the second quarter of this year, 10.2 percent of borrowers had negative equity compared to nearly 15 percent in the same period a year ago, CoreLogic reported Thursday. Nationally, 5.4 percent of all mortgaged homes were …

    The percentage of Tampa Bay homeowners underwater on their mortgages  continues to drop. [Times file photo]
  3. 'What Happened'? Clinton memoir sold 300,000 copies in first week


    Despite being met with decidedly mixed reviews, What Happened, Hillary Clinton's new memoir about the 2016 presidential campaign, sold a whopping 300,000 copies in its first week.

    The new memoir by former presidential candidate Hillary Clinton sold 300,000 copies in its first week.
  4. After Irma topples tree, home sale may be gone with the wind

    Real Estate

    ST. PETERSBURG — To house hunters searching online, the home for sale in St. Petersburg's Shore Acres neighborhood couldn't have looked more appealing — fully renovated and shaded by the leafy canopy of a magnificent ficus benjamini tree.

    Hurricane Irma's winds recently blew over a large ficus tree, left, in the yard of a home at 3601Alabama Ave NE, right, in Shore Acres which is owned by Brett Schroder who is trying to sell the house.
[SCOTT KEELER   |   Times]

  5. Unemployment claims double in Florida after Hurricane Irma


    The number of Americans seeking unemployment benefits dropped by 23,000 last week to 259,000 as the economic impact of Hurricane Harvey began to fade.

    Homes destroyed by Hurricane Irma on Big Pine Key last week. Hurricane Irma continued to have an impact on the job market in Florida, where unemployment claims more than doubled from the previous week.
[The New York Times file photo]