Understanding Destination Fees for New Cars

Introduction

Whether you're purchasing a car from a dealership or online, understanding the costs involved is crucial. One fee that often surprises buyers is the destination fee, also known as the freight fee or delivery charge. If you're unfamiliar with additional dealer fees, you may find it challenging to determine which charges are necessary. This guide will help you navigate destination fees and ensure you’re prepared for a smooth car-buying process.

What Are Destination Fees?

A destination fee is the cost manufacturers charge dealerships to transport a new car from the factory to the dealership lot. This fee is typically not included in the vehicle's advertised price, so it’s essential to ask if the destination fee is accounted for when you receive a quote.

Destination fees are not a profit source for dealerships. Instead, they reflect the full amount the manufacturer charges to deliver the vehicle. These fees are standardized to ensure fairness, regardless of whether the dealership is a few miles or thousands of miles from the manufacturing plant.

You can find the destination fee listed on the window sticker of every new car or disclosed in the fine print on the automaker’s website. Before signing any contracts, verify that the destination fee on the contract matches the fee on the window sticker.

How Much Are Destination Fees?

Destination fees vary by manufacturer and model but typically range from $900 to $1,200. For example, the destination fee for a Honda Civic is $955, while a Chevy Silverado’s fee is $1,595. These fees are fixed for each vehicle, meaning you’ll pay the same fee for the same model, regardless of the dealership's location within the continental United States.

Some dealerships may add an extra delivery charge on top of the destination fee. If you notice both listed on your sales sheet, inquire about the additional delivery charge and request its removal if it’s unnecessary. This principle applies to used cars as well. Unless you specifically arrange for delivery, you shouldn’t pay these additional fees when purchasing a used vehicle.

Tips for Handling Destination Fees

• Research Fees in Advance: Many automakers disclose destination fees on their websites. Check the fine print or the window sticker to understand the costs before visiting a dealership.
• Ask for Transparency: When negotiating the price of a new car, confirm whether the destination fee is included in the quote to avoid surprises later.
• Watch for Additional Charges: If you see both a destination fee and a delivery charge on your contract, ask the dealership to remove any unnecessary fees.
• Consider Overall Costs: While destination fees are non-negotiable, you can focus on reducing other costs, such as optional add-ons or extended warranties, to balance your budget.

Conclusion

Understanding destination fees can help you approach the car-buying process with confidence. While these fees are unavoidable, being aware of them allows you to plan your budget effectively and avoid unexpected costs. With MotorVero, you can get transparent pricing, ensuring a smoother and more informed buying experience. Take the time to research and ask the right questions to make your next car purchase stress-free and cost-efficient.