Most car manufacturers have raised destination taxes significantly in the last 4 years

Car holder

Shipping costs are definitely rising, but destination charges are even higher.

Andre Kudyusov / Getty Images

The price you see on a new car windshield sticker is not what you pay. And we’re not talking about taxes, we’re talking about destination fee. This is the fee that car manufacturers pass on to car buyers to ship the car from a manufacturing facility to a dealer somewhere in the United States. Amid rising car prices across the board, new data from Edmunds shows that these destination taxes from most carmakers are also rising rapidly.

Almost all automakers have raised destination taxes in the last few years, except for one deviant: BMW. Its fees actually dropped by 17% on average. But General Motors, Ford, Stellantis, Honda, Porsche, Hyundai and many others raised these taxes by over 20%. Ford and Porsche fell to a 29% increase on average. The average Ford comes with a destination tax of $ 1,393, and the average Porsche requires buyers to cough up $ 1,350 extra. According to Automotive News, which reported on the data on Monday, the tax grew by three times inflation over the last decade.

On average, a carmaker’s destination tax increased by 12% compared to vehicles sold for the 2017 model year, which will include some cars sold in 2016 and in 2017. This is roughly in line with general inflation in that period, but the figure would be much higher without BMW’s big drop. The average increase means that a new car typically has a $ 1,200 destination charge attached to it these days.

Stellantis has the highest average destination charge according to the data. Jeeps, Rams, Dodges and the many other brands under Stellantis’ portfolio require buyers to pay an average of $ 1,573.

It is not entirely clear whether these increases in destination charges are driven by higher costs, whether it is the average size of vehicles that is rising, or too few drivers to deliver new vehicles to dealers during the pandemic. One thing is for sure though: Higher prices have not held millions new car buyers from procurement of cars in 2021.

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Destination taxes for new cars have increased in the last 10 years


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