Destination costs continue to rise in the automotive industry

Image from the article titled As cars become more expensive than ever, destination costs continue to rise

Picture: David Zalubowski (PA)

Even after class actions against DG, Ford, and Stellantis, destination charges continue to increase across the industry. And like Automotive News reports, very few customers notice the costs because they tend to get bogged down in the details.

You might think the increase in burdens has something to do with the distortion of the global supply chain due to Covid. But the reports of Edmunds and Consumer Reports show that U.S. automakers have been raising those fees faster than anyone else in the past four to five years – or long before the pandemic. Ford class action lawsuit filed this summer claims Ford has increased its destination charges “42 percent in the past four years”, A rate that exceeds some luxury car manufacturers. The problem with these fees, the lawsuits say, is that buyers are unaware that automakers are pocketing a portion of these fees. A lawsuit against Stellantis has even gone so far as to call the charges “hidden annotations”.

Stellanis is also the worst offender. Its prices have increased in most of its brands over the past four years.

FCA’s shipping costs started to climb around 2017, Monticello said. Consumer Reports found that they had increased on average by 90% for Chrysler, Dodge and Jeep vehicles from 2011 to 2020, by 74% for Ram trucks during the same period and by 114% for Fiat from 2012 – its first year full sales in the United States – to 2020.

Image from the article titled As cars become more expensive than ever, destination costs continue to rise

Screenshot: Jeep

The recently introduced Jeep Grand Wagoneer, for example, has the highest destination price I have ever seen on a car. Regardless of the finish, its destination fee will set you back $ 2,000. A Jeep dealership owner in Houston complained to a customer about it, but said most of the time it wasn’t a problem because it was rarely noticed.

Most of the time they don’t even really see it because it’s built into the bill, ”said Wolf, owner of Helfman Dodge-Chrysler-Jeep-Ram-Fiat in Houston. “It adds to the cost of the vehicle, but in my experience this is very rarely a problem.

While automakers are still not entirely clear on the allocation of costs, some are calling for price transparency. Especially since the costs are not negotiable. As Consumer Reports Mike Monticello said, “It just feels like they’re not transparent, and it looks so weird that the destination charge is all over the map.”