What is a destination charge for a new car? Can you avoid it?

When you buy a new car, you can usually expect to pay a large number of fees to the dealer. Some of these fees are reasonable, while others seem somewhat questionable.


One fee that is starting to get a lot of attention is the car destination fee. The car destination fee is not included in the price of a car sticker and many new buyers are surprised by both the amount and the fact that they are required to pay it.

So what is the destination charge for the car and is it negotiable?


What is a car destination allowance?

The destination charge for the car is a charge to cover the cost of shipping a car from the factory to the dealer. To ensure that all buyers pay the same amount, the cost of the fee is the same regardless of where the dealer is located.

The name of the fee varies and is often referred to as a delivery or freight charge.

How much does a car destination cost?

The destination fee for a new car currently ranges from $1,000 to $1,700. The price depends on the type of car you buy and not on the dealer’s location.

To determine the destination fee of a vehicle you are interested in, visit a dealer and check the window decals. Dealers are required by law to include the destination charge as a new line item on all new car windows. Destination charges are also listed on car manufacturers’ websites.

It’s worth noting that while dealers are required to list the fee on window decals, it’s not included in the manufacturer’s recommended retail price. It is also not always clearly stated when a car is advertised.

Consumers are strongly advised to add the surcharge themselves when comparing car prices.

Does the car destination surcharge apply to used cars?

The car destination fee does not apply to used cars. The fee is specifically based on the cost of taking a car from the manufacturer to the dealer.

When a dealer buys a used car, it is usually issued by the previous owner. While there are additional costs associated with selling a used car, these costs are included in the sale price rather than as a specific fee.

Is the car destination surcharge negotiable?

The car destination fee is non-negotiable. It’s a flat fee, depending on the type of car you buy, and all dealers charge the same amount. While many dealer fees are negotiable, the destination fee is something that all consumers must pay in full.

What about additional destination costs?

Auto destination fees are non-negotiable, but some dealers are trying to charge consumers twice the same. Many people are not aware that the destination fee is the same regardless of the dealer’s location.

A dishonest dealer may claim that there is a second additional fee to get the vehicle on their particular lot. This is not a flat rate; it should not be paid and is actually a good reason to buy your car elsewhere.

What fees should you negotiate instead?

While the car destination fee is non-negotiable, many of the other fees charged by car dealers are. Here are a few alternative ways to save money when buying a new car.

Vehicle preparation costs

Many dealers charge an additional fee that is intended to cover the cost of getting the vehicle ready for sale. This may involve washing the car or removing protective coverings. This fee is not charged by all dealers and should be declined upon request.

VIN Etching

VIN etching is the process of etching a car’s vehicle identification number onto the windows and is mainly done for security purposes. While VIN etching is worth it, many dealers charge up to $300 for the service. You can get it done significantly cheaper by taking the vehicle to a body shop or by purchasing a DIY VIN etching kit online.

Dealer Installed Accessories

Dealers often offer a wide selection of upgrades and installed accessories. When looking at the final price for your car, it’s important to review each upgrade and make sure you’ve actually requested it. It is not uncommon for dealers to add upgrades without discussing them. When deciding which upgrades to buy, it’s also important to shop around. Many accessories can be found cheaper if bought directly.

Extended Warranties

An extended warranty is a warranty that starts when the manufacturer’s warranty expires. Whether you need an extended warranty is debatable and depends on how often you expect the car to need repairs. However, refusing an extended warranty is an easy way to lower the price of a car.

Market Adjustment

If a dealership says that a particular car model is in high demand, they may charge a market adjustment fee. This is an additional fee that allows them to charge more than the recommended retail price for a vehicle. This fee is not a fixed amount and is often negotiable.

GAP insurance

Guaranteed asset protection (GAP) is a type of insurance intended to cover the difference between how much your car is worth and how much you owe if the car is a total loss. While GAP insurance is often a worthwhile purchase, it may be available at a lower rate if you buy from your insurance company instead.

Tire and wheel protection

Dealers often offer tire and wheel protection. This is intended to cover the cost of a flat tire or tire replacement. While damage to a vehicle’s wheels is common, it’s also not an expensive problem to repair. So you can save money by refusing this add-on and paying for any wheel damage yourself.

The car destination fee is not negotiable, but other costs include:

The destination charge for the car is not included in the advertised price of a car, and consumers are often dissatisfied to discover that it is non-negotiable. The good news is that while you can’t get around paying a destination fee, many other dealer fees can be reduced.

If you’re looking to save money on a new car, look to the optional extras like VIN etchings and extended warranties instead. You should also be prepared to shop around if you can’t get a good deal.

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