Is the Destination Fee on Price-Stickers Ripping us off?


Is the Destination Fee on Price-Stickers Ripping us off?


Here's a topic that I think deserves some discussion...I haven't seen a lot of it in this forum. On many, but not necessarily all, new vehicles today, part of the final MSRP on factory window-stickers (irrespective of a second-sticker dealer-price-markup) will include a destination fee, which on today's new vehicles, is now often well above $1000.

Of course, it costs money for auto companies to ship new vehicles from the factories to the dealerships....which is usually done by truck-transporters, freight-trains, or, across oceans, by cargo-container ships. Fine, I get doesn't grow on trees. Trucks, trains, and ships use a lot of fuel. Nor do truck-drivers, train-engineers, and ship-captains work for free. Nor can new vehicles drive themselves from the assembly-plant to the dealerships (although you might not be able to convince Elon Musk of that LOL) . What I DON'T get, though, (and here may be the interesting discussion-part) is why all new vehicles from the same plant, no matter how far away the plants are from the dealership, have the same delivery-fee. Everyone who buys one of those new vehicles, irrespective of location, pays the same Destination Charge if your dealership is only a couple of miles from the plant or if the vehicle has to be shipped halfway around the world from a plant in Korea or China. By having only one fee, in effect, those who live very close to the factory (or buy their vehicles from a dealership close to the factor) are, as I see it, subsidizing the costs of shipping them long distances across the country or across the ocean.

Anybody got any comments on this? If so, Fire Away, Folks.

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The answer to the first question "Is the Destination Fee a rip-off?" is I don't know. If it is a rip-off, that suggests that, collectively, we are all paying more in destination fees than it costs for the automakers to ship their products from the factory or the original port of entry. I don't know enough to say, one way or another.

As to the second question, why the automakers charge all buyers the same amount, regardless of distance from factory or port of entry, it is an equalization measure. If Toyota, for example, charged strictly what it cost to ship the vehicles, Camry buyers would all flock to the Camry factory in Georgetown, Kentucky to buy their cars at super-low destination fees; but those who lived in Middle-of-Nowhere and cannot travel to Georgetown, would be charged an outrageously exorbitant amount in destination fees (or there would be no Toyota dealerships there because no one wants to buy super-high-priced Camrys and Corollas).