The Real Deal with Vehicle Destination Fees
Destination fees are part of the car buying experience. But what they are? Are they negotiable? Are they required on a used car purchase? We dove in to find out.
Jana Askeland
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What Are They, and Do You Have to Pay Them?
Sometimes car buying can be a challenge. When buying a new vehicle, the sheer amount of fees and add-ons can make your head spin. But there is one charge that is rarely questioned: destination fees. This charge can also be referred to as handling, freight or processing fees. In the hustle and bustle at a car dealership on a weekend, you may find that the more you stare at the sticker in the window of a vehicle you are interested in, the more confusing the list of fees becomes. So let’s break down what destination fees are, how much they are and how negotiable they are.
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Related: Try These Tips the Next Time You Make a Car Purchase
Don’t let destination fees derail your happiness with a new car. Photo: Scotty Reiss.
What Are These Destination Fees, and How Much Are They?
Destination charges cover getting your new vehicle from the factory (where it’s made) to the dealership (where it’s sold). Fees normally range from $750-$2,000 per new vehicle. The car manufacturer sets each unique destination charge which varies based on the vehicle’s make and model. Vehicles are transported to their destination by ship, train, and/or truck. Typically, the further the vehicle must travel – the higher the fee. Fees can also vary depending on the brand and the type of vehicle (luxury and rare vehicles may have much higher fees.)
Are Destination Fees Negotiable?
Car dealers must pay these fees to the manufacturer, so the expense gets passed on to you, the consumer. There’s normally no profit built into the destination fees, so generally, it’s unusual to have a dealer waive these charges. You’ll be able to see all the charges and fees on the Monroney (aka the window sticker). Sometimes the fee is included in the MSRP (manufacturer-suggested retail price), but you may also see it added to the MSRP. Either way, the fees must be clearly disclosed.
The 2023 BMW XM Monroney. Photo: BMW USA
Will Every Vehicle Transaction Have a Freight or Destination Fee?
You won’t see destination charges on preowned vehicles. But, with the explosion of online car buying, you may have delivery fees if you order a car online and it’s delivered from another region. Oftentimes these fees are disclosed upfront and can be negotiated.
Remember, when you buy a new car, the “for sale” price isn’t the final amount you’ll pay because destination charges and dealer fees will be added to the final price (also called the “out the door” price.) To avoid surprises at the dealership, you can research destination charges in advance. Some automakers (like GM) publish theirs online.
Next time you shop for a car and remember to look for the destination fee, you’ll look like this. Photo: Kristin Shaw
In the End, it’s the Price You Pay for a Brand New Car
And for many it’s worth it. That new car smell, paired with a warranty and the opportunity to customize your car how you want to many is the only way to go. Just keep in mind:
- You will pay a destination fee on any new car purchase
- These fees are not negotiable
- Fees vary by make and model
- Typically there is no destination fee on preowned vehicles, but if you shop online, there may be a delivery fee (which we are pleased to tell you is negotiable!)
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