If you feel like automakers are taking you for a ride with their exorbitant destination fee, get ready for a bumpy road if you look into buying
a new Jeep or Ram this year. Stellantis, the parent company of Jeep and Ram, has been leading the charge in hiking destination fees over the past decade.
Though, they really topped the cake this year with a hefty $2,000 destination fee for the Jeep Grand Wagoneer
and Wagoneer, followed closely by a $1,795 fee for the Jeep Cherokees and Ram pickups
. What are destination fees, and why are they increasing so rapidly?
Decades ago, destination fees were known as freight and dealer preparation fees. They are meant to cover the automaker's cost of getting the vehicle from the manufacturing plant to the dealer and the dealer's cost of getting the car ready to show, from taking the plastic covers off seats to washing the vehicle.
Automakers are required to calculate an average cost for shipping and prepping their vehicles, charge each sale that average cost, and disclose the cost on the price sticker. That way, vehicle buyers far from the factory or port are not charged a higher fee than those closer.
In 2021, Consumer Reports
evaluated destination fees over the prior decade and found the fees for Chrysler, Dodge, and Jeep rose an average of 90 percent, whereas inflation was only 18 percent over that span. Ram truck destination fees increased 74 percent over the same time period, and Fiat increased 114 percent. All of these are brands of Stellantis, formerly Fiat Chrysler.
Automakers who were even willing to discuss the increases would give only vague answers about higher freight costs and the buyer preference for larger SUVs and pickup trucks meant they could fit fewer vehicles on trains and trucks.
Dan Bedore, an independent consultant who worked for 25 years in the auto industry, told Consumer Reports that it was pretty obvious if automakers could sneak an extra $100 in the destination fee and sell 2 million units, that's a nice boost to the bottom line.
The costliest destination fees for 2022
Consumer Reports
compiled a new list of top destination fees for 2022 that disclosed those sky-high numbers for Jeep and Ram.Large SUVs and pickup trucks from Cadillac, Chevrolet, Ford, GMC, and Nissan also joined the top 10 list with destination fees of $1,695. Dodge ranked on the list with the only car models with the Charger and Challenger netting a cool $1,595 destination fee, along with the Durango SUV.
These higher fees are coming on top of the increasing price of vehicles during 2022 as the chip shortage and low inventory drove prices higher than the manufacturer's suggested retail price at many dealerships.
MORE: Nobody Is Talking About This Huge Change Happening Across the Car Industry
Shopping for a lower destination fee
If you are determined to buy a new car during this overheated market, you can still find reasonable deals on destination fees. Mini offers the lowest destination fee at $850 on all makes and models. BMW hangs in under $1,000 with a $995 destination fee on all cars and SUVs.
Chevrolet, Subaru, and Volkswagen also offer $995 destination fees on some vehicles, while Honda barely tops $1,000 with a fee of $1,015 on the Accord, Civic, and Insight.
Of course, you also could look for a late-model used car and pick up a good deal on a vehicle after someone else already paid the destination fee.
Buying insurance for your new ride
Whether you are buying a new Jeep, Ram, or another vehicle, or even opt for a used car, you can count on Jerry
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