New Car Destination Fees Are Way Up: Here's Why

Washington DC July 29, 2019; The AIADA reported that if you haven't shopped for a new car lately, you might balk at an item near the bottom of the window sticker: the destination charge.

Once a digestible fee of around $500 (see transportation charge on sticker above), charges have ballooned in recent years, according to USA Today.

Destination charges on the top three best-selling cars through May 2019 – the Chevrolet Silverado, Ford F-Series, and Ram pickup – are more than $1,500 apiece.

So why are rates going up? It's not due to the cost of fuel. Diesel fuel, a major factor in trucking costs, has actually fallen in price during the span. But other factors are at play, said Sean Cabin, of vehicle-transportation firm RCG Logistics.

"The modest cost reduction [in diesel fuel] during the last year is more than compensated by tight driver and new equipment markets," said Cabin, RCG's chief compliance officer. "These bottlenecks have caused many carriers to reduce their driver hiring requirements and added further risk when purchasing essential equipment."

Read more here.