Here's what a destination charge means and how it's calculated Page 2

October 21, 2016

While most automakers keep destination charges consistent throughout an entire model year, others will adjust them (typically upward) in the event of, say, a fuel price spike. That means that two otherwise identical cars on a dealer lot may be priced $20 to $50 different from one another because one was shipped prior to the price hike and one came after. It's worth noting that a few automakers also adjust MSRPs throughout the year, as well, so look very closely at the paperwork before signing on the dotted line.

And if you're buying a high-end exotic, you'll pay a lot more. For instance, on a Ferrari the delivery charge is upwards of $4,000—but Ferraris get rather special treatment when they are transported from Italy to dealerships. They're delivered in a closed carrier and they receive the proverbial white glove treatment during their entire journey. 

But that high destination charge hardly stops anyone from buying a new Ferrari. 

Federally mandated, but not necessarily advertised

You might think that automakers are trying to pull one on you with their destination charges. Well, they are, but only by not necessarily including it in the price they've advertised on their website. Some automakers include it, while others (like Nissan, pictured) do not show it to you until you've finished working your way through their "Build and Price" configurator.

... plus destination charge

... plus destination charge

The federal government requires separate line item on the window sticker, which is referred to as a Monroney, for the vehicle's delivery charge. The automaker is required to pass this cost directly on to consumers and not to inflate it.

(Trivia: The Monroney is named after Oklahoma Senator Mike Monroney who sponsored a 1958 congressional act requiring a uniform retail price displayed in a car's window.)

Here's one complication: The charge listed on the window sticker is only supposed to account for the cost of transport within the United States. So that Chevy SS? The cost of getting it to U.S. soil is actually calculated into its price before the destination charge, which helps explain why you're nearly at $50,000 to buy a new SS (it's worth it, trust us). 

2016 Subaru Outback

2016 Subaru Outback


Although most brands charge a flat rate within the continental United States, and some even extend that courtesy to Alaska and Hawaii, that's not universal. Two Japanese automakers still rely on distributors to fill dealer lots. Toyota's Gulf States distributor covers Texas and a few south central states and Southeast Toyota handles the region it's named after. Subaru of New England, meanwhile, delivers cars exactly what its name suggests.

Distributors are big money makers, even if they don't have very creative names. 

2016 Chevrolet SS

2016 Chevrolet SS

Destination charges are generally slightly higher with these distributors. Although these distributors used to tack on profitable port-installed options that jacked prices up by thousands of dollars,that practice is mostly gone today and their presence is largely unobtrusive to consumers. However, if you're buying a new Toyota in Texas or a Subaru in New Hampshire, you're actually buying the car from the dealership, which bought it from the distributor, which bought it from the automaker. 

 And you thought that Chevy SS had some stories to tell? 

Let's not forget about the 49th and 50th states, which sometimes have their own destination charges depending on the manufacturer. So despite the fact that automakers are supposed to charge the same to ship a car to Portland, Maine, as they are to Portland, Oregon, there are some loopholes—Alaska, Hawaii, and those distributors. 


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