Most automakers jacked up destination charges big time in the past 4 years
If it weren't for BMW cutting its charges, the average increase would be much higher than inflation.
Shipping costs are up, for sure, but destination charges are even higher.
The price you see on a new car's window sticker is not what you pay. And we're not talking about taxes, we're talking about the destination charge. That's the fee automakers pass on to car buyers for shipping the car from a production facility to a dealership somewhere in the US. Amid rising car prices across the board, new data from Edmunds shows these destination charges from most automakers are increasing rapidly, too.
Nearly every automaker jacked up destination charges in the past few years, save for one outlier: BMW. Its fees actually dropped by 17% on average. But General Motors, Ford, Stellantis, Honda, Porsche, Hyundai and many others increased these charges by over 20%. Ford and Porsche tied for an increase of 29% on average. The average Ford comes with a $1,393 destination charge, and the average Porsche requires buyers to cough up an extra $1,350. According to Automotive News, which reported on the data Monday, the charge grew at three times the rate of inflation during the past decade.
On average, an automaker's destination charge increased by 12% compared to vehicles sold for the 2017 model year, which would include some cars sold in 2016 and in 2017. That's roughly in line with general inflation over that period, but the figure would be much higher without BMW's big decrease. The average increase means a new car typically has a $1,200 destination charge attached to it these days.
Stellantis has the highest average destination charge, according to the data. Jeeps, Rams, Dodges and the numerous other brands under Stellantis' portfolio require buyers to pay $1,573 on average.
It's not entirely clear whether these destination charge increases are driven by greater costs, whether it be vehicles' average size increasing, or too few drivers to deliver new vehicles to dealerships during the pandemic. One thing remains certain, however: Higher prices haven't kept millions of new car buyers from purchasing vehicles in 2021.
