Mar 25, 2026
When buying a new car, there’s a laundry list of details to look out for in your contract before you sign on the dotted line. Edmunds recommends making note of no less than 10 points, including the sale price, credits and the details of your auto loan, if applicable (1).
But industry experts are also calling out the cost of hidden fees, one of which has risen exponentially in the past few years: the destination charge.
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The Wall Street Journal reports that this charge, which covers the cost of shipping a new vehicle to the buyer, has now hit an average cost of $1,600 — largely driven by increases in the costs of fuel, shipping and import tariffs (2).
Here’s what you need to know about this additional cost and how it could impact your budget when you’re buying a new car. Plus, we’ll offer a few tips on budgeting for the high cost of new vehicles and how you can be sure you’re buying what’s best for your needs.
What is a destination charge?
According to Consumer Reports (CR), destination charges aren’t just about covering the cost of transporting the vehicle to you individually. The charge is an average of the cost to ship a vehicle from the factory to anywhere in the country, the logic being that this price doesn’t penalize those who live farthest away (3).
However, their 2021 investigation revealed that destination fees rose from an average of $839 in 2011 to $1,244 in 2020 (4). They’ve continued to rise since then, with CR reporting “a notable increase from the 2024 to 2026 model years.”
According to their data, the range of destination charges was $995 to $2,095 in 2024, according to the brand you chose. In 2026, that range of prices is $1,150 to $3,250 (3). Their reporting included 19 auto makers, spanning domestic and foreign manufacturers, and every budget category from Kia to Alfa Romeo. Interestingly, their research shows that you’ll pay more than twice the destination fee for a Ford than for a BMW or Mercedes-Benz.
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What auto industry experts are saying
Consumer Reports is one of many consumer advocate groups calling for transparent pricing practices. They specifically recommend that auto manufacturers be required to include destination charges in their listings and marketing info.
“It’s a way to raise prices that is, shall we say, less transparent to the consumer,” said John Morrill, a Massachusetts car dealer, speaking to the Wall Street Journal (2). “Carmakers have raised them a lot, certainly faster than they’ve raised prices.”
“The automaker should be responsible for getting their product to the retailer, just like eggs to a grocery store or electronics to a store such as Best Buy,” Jack Gillis, executive director of the Consumer Federation of America, told CR (4). “There is no reason why destination charges are not incorporated into the cost of the vehicle… except that it enables the manufacturer to charge more.”
What a new car costs now
These rapidly increasing fees are coming at a time when the sticker price of a new vehicle is also reaching record highs. Kelley Blue Book reported in October 2025 that the average transaction price for a new vehicle hit $50,080, the first time the price had crossed the $50,000 threshold (5).
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Additional fees are often folded into the cost of financing a new car, which Edmunds reports is a way for dealerships to make more money in the long run. Dealerships earn a portion of the interest rate or a fee when they arrange a loan on behalf of a bank or auto company. With the cost of a new car so high, the standard 48-month car loan has turned into a standard 72-month loan, and some buyers are even stretching to 84 months (6).
Edmunds also advises consumers to be on the lookout for other fees that are additional to a car’s sticker price (7). These can include:
- Market adjustment: If a vehicle is in short supply at the dealership, they may charge thousands of dollars extra for taking it off the lot. This fee can usually be negotiated down, so be sure you do your homework and shop around.
- Advertising fees: This is usually a charge by the manufacturer to the dealer, though some dealerships tack on additional fees for their own advertising, so it’s worth inquiring about a breakdown.
- Add-ons: Extra features like anti-theft devices, window tinting, chrome-plated wheels and all-season floor mats are perks, but they’re not always necessary. You can negotiate on the costs or skip what you don’t need to lower your total purchase price.
Edmunds also notes that some dealers will tack on additional lines to the contract with “official-sounding names, such as ‘S&H’, ‘PDI’, ‘dealer prep’ or even ‘shipping’” (7). They advise asking about any fees you don’t understand before signing a financing contract, and understanding what fees are permitted by state.
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How to take the shock out of the sticker price
The best way to avoid paying a higher-than-necessary price for your new car is to do your homework. Understand the vehicle’s value by searching on Kelley Blue Book, and look up which fees are common in your state, including registration fees at the DMV. Edmunds offers a chart to help estimate your fees (7).
Before signing a contract, make sure you stick to your budget by:
- Understanding your optimal and maximum total price you can afford for a car, separate from your desired monthly loan payment
- Reviewing all line items in the contract carefully, especially anything with a dollar figure
- Ensuring you bring the discussion back to the overall cost, not just the monthly loan payment. Do the math on how much interest you will pay over the life of your car loan vs. how much the vehicle is worth
- Look for the federal Truth in Lending disclosure, and be sure it outlines the interest rate, total payments and the finance charge. This protects you in case you encounter shady lenders.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Edmunds (1, 6, 7); Wall Street Journal (2); Consumer Reports (3, 4); Kelley Blue Book (5)
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Rebecca Holland is dedicated to creating clear, accessible advice for readers navigating the complexities of money management, investing and financial planning. Her work has been featured in respected publications including the Financial Post, The Globe & Mail, and the Edmonton Journal.
