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Why Do We Still Have The Ridiculous Destination Charge?

Illustration for article titled Why Do We Still Have The Ridiculous Destination Charge?

Most people think that buying a car is a difficult process. I know this because I have several friends with old cars, terrible cars, cars so bad that their entire list of amenities consists of government-mandated safety equipment, and they refuse to buy a new one. And it’s not because they’re too busy, or a new car is too expensive. Instead, it’s because the stress and aggravation of buying a car is so bad that they would rather drive around and say things like: “I enjoy reaching across the seat to unlock the door! It’s good exercise!”


And, frankly, it’s hard to blame them. The last time I bought a car, I visited the local Cadillac dealership. I went there with my girlfriend and we stood outside for several minutes, looking at Cadillacs, until a salesman walked up, deduced that we aren’t of the age where your body parts swell up when the weather changes, and asked: “Are you lost?”

No, that isn’t really what he said. What he said, over the next four hours, is that the car I was considering is an exceptionally good Cadillac, and that it’s hard to imagine a better Cadillac than this one, and that it rides like a Cadillac, and handles like a Cadillac, and it’s probably the best Cadillac ever made, assuming, of course, that I agree to buy today.


So I did. But once you agree that you’ll buy the car, you aren’t finished. No, sirree! Shaking hands with the salesman is like a signal that the process is just beginning.

The next thing that happens is some guy walks up to “present a few options with your car,” which means he’s going to show you aftermarket accessories. This involves walking into the parts department to examine a wall of wheels, and grilles, and little twirly keychains that are priced in a strategic manner that involves a) leading focus groups to discover what these items should cost, and then b) doubling it.


You have to feign interest in this for 10, maybe 20 minutes, as he explains your aftermarket grille options, namely that you can have a silver grille, or a black grille, or – and he grabs your arm here, because this is really too radical for some people – a grille that is both silver and black. Eventually, you tell him you’ll “think about it,” even though the only thing you’re thinking is how terrible it must be to have a job selling aftermarket grilles.

Next, you’re led into the F&I Manager’s office under the pretense of signing the paperwork. But really, you’re going to hear about even more automotive accessories, except that you can’t actually see these accessories. This is stuff like wheel and tire packages, and LoJack, and undercoating, and VIN etching, and by this point you really start to wonder if maybe you should just move to some city with excellent public transportation and swear off car ownership for life, even if it means leaving behind your family.


So all of that sounds pretty bad, and it is. But I’ve left off the worst part about buying a new car: the destination charge.

For those of you unfamiliar with the destination charge, allow me to explain. Let’s say you watch a commercial for a new car, and the commercial says the car starts at $19,995. That’s great, right? You can walk into a dealer with twenty grand and walk out, after four hours of insisting you don’t want dealer-installed splash guards, with this brand-new, zero-mile, perfectly clean new car.


Except that you can’t. And that’s because of destination charge.

You see, in the car world, prices are advertised before they add in the vehicle’s destination charge. In other words, that car they’re advertising for $19,995 is actually more like $19,995 plus a $795 destination charge, which may sound like a small number until you realize it’s something like four percent of the entire value of the car.


Now, I wouldn’t have a problem with the destination charge if there were some way you didn’t have to pay it. For instance: you can get that advertised $19,995 price, but you have to come down to the docks and pick up your car from Big Al, the union longshoreman who saves his deodorant for special occasions.

But here’s the thing: you can’t get out of the destination charge. It’s not some tacky add-on they try to stick you with when you’re too tired to argue any further. You have to pay it, and it’s included in the price of every new car, whether you like it or not. Drawing this bizarre pricing strategy to its natural conclusion, my question is: why stop at the destination charge? Why not advertise each car for $18,995 plus tires? Or $16,495 plus doors? Or $83.50, plus all the parts that make up a working automobile, except for a passenger side door mirror?


The thing about this topic that really surprises me isn’t the fact that automakers are still allowed to do it. It’s that they’re allowed to do it in the automotive industry, which is so heavily regulated that you can’t start a vehicle in the fall without a helpful tire pressure warning light reminding you that it’s getting cold outside.

Imagine if other industries started following this trend. Oh, sure, online retailers quote prices before shipping – but that’s because the item is in a warehouse somewhere, and the shipping cost is dependent on where you live.


But imagine this: you walk into an Apple Store to buy one of those shiny new computers all the college kids these days are using to browse Facebook. You’re excited. You’re happy. You pay the $1,499 retail price. You go home, eager to set it up and get started. And then you glance at your receipt, only to discover they tacked on an extra $75 “destination charge” for an item that was sitting in the store.

I bet you’d be pretty upset if that happened. But hopefully, you wouldn’t be too angry. After all: at least they didn’t try to sell you VIN etching.


@DougDeMuro is the author of Plays With Cars. He operates He owned an E63 AMG wagon and once tried to evade police at the Tail of the Dragon using a pontoon boat. (It didn't work.) He worked as a manager for Porsche Cars North America before quitting to become a writer, largely because it meant he no longer had to wear pants. Also, he wrote this entire bio himself in the third person.

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