Car Buying

Buying a Car: Why Is the Destination Charge Listed Separately?

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author photo by Doug DeMuro August 2015

If you're interested in buying a car, you've probably realized that "destination charge" is always listed separately from a new car's price on the window sticker. This can be annoying for some shoppers, as it makes the car seem like it'll cost less than it does -- until you get to the window sticker and discover the additional destination charge, which can sometimes add more than $1,000 to the purchase price. So why is the destination charge listed separately? We have the answer.

It Used to Be Worse

Interestingly, splitting up the destination charge as a separate item was originally intended as a tool to protect consumers, not annoy them. In years past, some unscrupulous dealers would charge an additional "delivery fee" on top of the sticker price in order to earn extra profit. Following complaints from customers, the federal government stopped the practice by mandating that automakers charge one uniform delivery fee for each model -- and that they display it separately on window stickers to show a car's "true" shipping cost to potential buyers.

As a result, the requirement to split up destination charge into a separate category on window stickers is actually federally mandated -- and all automakers must follow the practice. This is to ensure buyers won't get tricked into paying extra for a special "delivery charge" beyond the actual cost to ship the vehicle to the dealer.

The Problem -- And a Solution

Unfortunately, the addition of a destination charge to window stickers has meant that automakers can advertise the prices of vehicles without destination, much like other goods are advertised without tax. This is because the destination charge isn't technically part of the vehicle's price, but rather a separate line item on the window sticker.

If you're constantly being surprised by the destination charge when buying a car, we have a solution for you: simply add about $800 -- or as much as $1,000, to be safe -- to the advertised price of every car you see. For instance: if you hear that a car you're considering starts at $29,995, assume that you'll pay at least $30,995 with shipping. Also assume that figure comes before taxes and options, which could drive up the price even further. It may be annoying, but it's better than paying a separate -- and varying -- "delivery fee," which was a common practice before destination charge became a separate item on the window sticker.

This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
Buying a Car: Why Is the Destination Charge Listed Separately? - Autotrader