New car buyers should budget for destination charges, which aren’t included in the MSRP.

Car buyers are often surprised by an unexpected expense: the destination charge for new vehicles. Depending on the model, the fee can add thousands of dollars to the price of a car. Let’s look at what destination charges are and whether you have to pay them.

What is a destination charge?

Destination charges cover the cost of shipping cars from the manufacturer to the dealer’s lot. The charge appears as a line item on the vehicle’s price sticker and may be listed under names such as “destination and delivery,” “transportation” or “inland freight and handling” fees.

Why car buyers are surprised by destination charges

Destination fees catch auto buyers by surprise because they aren’t included in the manufacturer’s suggested retail price (MSRP). The amount of the fee varies by manufacturer and can add $1,200 to $3,250 to the purchase price.

Destination fees have been in use for decades but recently hit record highs, reports Kelley Blue Book. From 2019 to 2025, destination fees rose 37%; the average in 2025 was $1,551. In just the past year, GM increased the destination fee on trucks by 40%. Tariffs have been a primary driver of year-over-year increases.

Why are destination charges so high?

Manufacturers try to keep the MSRP as low as possible to remain competitive. By keeping destination charges separate from the MSRP, they can attract more buyers.  Although advertisements note the price doesn’t include taxes, title, registration and destination fees, manufacturers know an attractive headline price will bring buyers into the showroom.

Destination fees aren’t standardized. Some manufacturers average the cost, so destination charges are consistent across the country. Others use variable fees based on the state where the vehicle is delivered.

Do you have to pay destination charges?

Dealers won’t budge on destination charges and you can’t avoid them—even if you pick up the car at the factory, according to CarBuzz. To get your best out-the-door price, you’ll have to negotiate other fees and add-ons, and ask about dealer incentives.

Financing your new car

Understanding that destination charges are added to the MSRP helps you prepare for a new car purchase. Another helpful step in the car buying process is to get pre-approved for a vehicle loan before you go car shopping. At Consumers, you can apply directly with us or through participating dealerships for an auto loan. Either way, you’ll get competitive rates and great service.

 

All loans subject to approval. Rates, terms, and conditions are subject to change may vary based on credit worthiness, qualifications, and collateral conditions.