If buying a car feels more expensive than ever, the destination fee is one reason. This fee, which is tacked on to a new car’s price (also called a delivery fee, freight fee, or destination charge), has exploded — jumping from an average of about $839 in 2011 to $1,244 in 2020. In 2024, consumers saw destination fees as high as $2,095. Today, the high end for destination fees hovers around $3,250.
In 2024-2025, Chevrolet, Ford, and Ram increased the destination fees for their flagship half-ton pickups by more than 30%.
These increases add up fast. Car buyers collectively paid more than $26 billion in destination charges last year. Combined with high-in-demand models selling well above MSRP (Manufacturer’s Suggested Retail Price), consumers are facing serious sticker shock when in the market for a new vehicle. Automakers aren’t required to include the destination fee in the advertised price, which adds to the stress of the car buying process.
What Is a Destination Fee?
A destination fee is the mandatory charge the manufacturer adds to every new car to cover the cost of transporting it from the factory to the dealership. It sounds like a shipping fee, but is more of a built‑in pricing tool automakers use to recover logistics costs. Carmakers average the cost to transport the vehicle from different parts of the country, so the fee you’ll see is the same amount for that model, no matter where you live.
Car dealers are required to itemize and highlight this fee on the window sticker price. But it’s rarely included in the advertised pricing of the vehicle, which is legal. That means many shoppers walk into a dealership expecting the online price of the vehicle, only to find a much higher sticker price. The result is a frustrating surprise that makes true comparison shopping difficult.
Destination fees are not applied to used cars.
I Thought Junk Fees Were Illegal?
The Federal Trade Commission (FTC) issued the CARS Rule (Combating Auto Retail Scams) in 2023 to target junk fees and bait-and-switch tactics in the automotive industry. Under this rule, dealerships could not misrepresent a vehicle’s price or cost. They also had to disclose the actual price the consumer can pay and reinforce that many add-ons (like maintenance plans) are optional.
Previously, under the CARS Rule, any add-ons that did not provide a clear benefit were prohibited. This included unnecessary extended warranties and service contracts or subscriptions that don’t make sense for the vehicle (like oil changes for an electric vehicle). The CARS rule was not intended to prohibit destination charges, however. Even if it had, the Fifth Circuit Court of Appeals invalidated the CARS rule in 2025.
The FTC also issued a rule on unfair and deceptive fees in May 2025. But this rule applies to obscure fees for ticketed events and hotel and other short-term lodging. It doesn’t apply to car purchases.
The FTC defines a junk fee as an unexpected or hidden charge added to a purchase, often late in the transaction, that inflates the final price without providing much value to the consumer — imagine a two-star hotel charging an exorbitant resort fee. Regardless, because a new vehicle destination fee covers a real cost (transporting the vehicle), it doesn’t fit the criteria of a true junk fee.
Some states have their own laws prohibiting junk fees, such as Minnesota and California, but these laws also exclude automotive sales.
You Can’t Fight the Delivery Fee
Unfortunately for car buyers, the destination fee is non-negotiable. But this doesn’t mean you’re out of options for driving down the overall purchase price of the vehicle. You can still shave down the total cost by negotiating dealer add-ons, optional packages, financing terms, and trade‑in value.
Keep in mind that MSRP is just the manufacturer’s suggested price. The dealership is not required to sell the vehicle at that price. You can always negotiate the actual vehicle price tag, but the leverage you have depends significantly on the market and the vehicle model. Dealerships are not likely to discount the price of an in-demand vehicle.
It can also help to get a written price quote before discussing a trade-in or financing. Getting a quote is easier than ever with online vehicle marketplaces like CarMax or Carvana. Even if you plan to trade in your old vehicle, you can say you’re still deciding. It can hurt your ability to negotiate if the dealership knows they will have to apply the trade-in value to the cost.
The Best and Worst of Destination Fees
In general, expect to pay a higher markup for a larger vehicle. This is because destination fees vary by vehicle weight and size.
According to Consumer Reports, the vehicle brands with the highest destination fees are:
- Alfa Romeo
- Cadillac
- Chevrolet
- GMC
- Ram
- Jeep
- Lincoln
- Ford
Conversely, car buyers will pay the least in destination fees for the following brands:
- Mercedes
- Toyota
- BMW
- Acura
- Honda
- Kia
- Nissan
- Subaru
- Volvo
- Mazda
There’s Still Hope for Car Buyers
The delivery charge may be unavoidable, but understanding how it works puts you in a stronger position when shopping for a new ride. Think of the price you see advertised in a magazine or on TV as a snapshot of the total out-the-door price. By knowing what’s negotiable (and what isn’t), you have more control over the final number you pay. But your most powerful tool as a car buyer is a willingness to walk away when the numbers don’t add up.
Related Resources
- How To Sue a Car Dealer for Misrepresentation (FindLaw’s Learn About the Law)
- Can You Dispute Junk Fees? (FindLaw’s Law and Daily Life)
- Car Dealerships Fight Regulations Lowering Surprise Fees (FindLaw’s Courtside Blog)
