How Much Are Destination Fees for New Cars?

With the automotive industry in flux, some consumers will undoubtedly hold off on buying cars. However, demand is only rising, and new vehicles are sold with each passing day. 

You might want to spend money wisely, seeing that prices for your dream ride may currently be extremely high due to market conditions. One of the most important factors to consider is destination fees, which can add significantly to the total sum.

Let’s explain what destination fees are, how much they cost, discuss whether they are part of the MSRP, and find ways you can potentially avoid them during your next vehicle purchase.

What Is A “Destination Fee”?

In essence, a destination fee is a cost associated with delivering a new car from the factory to its point of sale. While this is typically the dealership, the final destination may sometimes differ depending on purchase terms. 

Dealerships include such charges to recompensate preparation and logistical costs. Vehicles are transported from the factory to the dealer, and it costs money to transfer it. It is not about profit but rather about cutting back losses as they first have to pay the manufacturer. So, it is uncommon for the dealers to waive or negotiate a destination fee. 

How Much Is The Destination Fee?

Destination fees vary between manufacturers and generally depend on the model. They may range from about $1,000 to $1,500. Sometimes they may even be higher, mainly if the vehicle in question is expensive or a high-performance model. For instance, Bentleys may have a destination fee of $24,725, while a Ferrari may set you back an additional $3,950. 

What Constitutes A Destination Fee?

While a destination fee can be pretty high, the amount of work that goes into delivery is considerable. However, if you are still annoyed about having to pay this fee, let’s look first into what goes into it. 

A destination fee is calculated according to the following:

• Transportation by truck, train, and/or ship from the manufacturer to a regional distribution center
• Transportation from the distribution center to the dealership
• Quality checks and repair of any mechanical or cosmetic issues that may have occurred
• Installation of customer-ordered accessories or equipment

While the list is not definitive, these factors entail labor, equipment, and fuel, the cost of which goes into the destination fee.

Is It Included In The MSRP?

The short answer to this question is…yes! Every new vehicle comes with a document that lists its equipment and options, also mentioning how these factor in the manufacturer’s suggested price and destination fee. This document is called a Monroney or window sticker.

But the format may vary. Some window stickers list the price with the fee added, while others divide the vehicle’s actual cost and the destination fee. Whatever the case, you should be able to find information on this fee somewhere in the document.

Is There Any Way To Avoid Paying This Fee? 

Not in a conventional way, no. Dealers see this fee as justified and will include it when extra legwork is involved. Even if you were to buy through a “straight from the factory” program, the destination fee would still be in the MSRP. These programs are about the experience and may even include lodging, meals, and personalized vehicle handovers. Once again, that jacks up the final price. 

Buying a used car, though, may not incur this fee. It’s common for the seller to deliver the vehicle directly to the dealers for a trade-in. Even if a dealership acquired this car at an auction, they would only have a small sum to ship it to the showroom. 

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