By Ryan Felton

Consumers are encountering a new kind of sticker shock when buying a car. It is called the "destination charge" and is now running an average $1,600.

The charge is supposed to cover the cost of shipping a new car or truck to its buyer. Automakers have been upping the fee by hundreds of dollars in recent years, as fuel and shipping costs have risen. Now higher tariff fees are likely contributing to the increases, car dealers and analysts say.

Overall, car buyers spent more than $26 billion to cover destination charges in 2025, according to data from Edmunds, the online car-shopping resource.

"It's a way to raise prices that is, shall we say, less transparent to the consumer," said John Morrill, a Massachusetts car dealer. "Carmakers have raised them a lot, certainly faster than they've raised prices."

Destination charges have gone up for a range of vehicles popular with Americans. The Ford F-150's fee rose to $2,595 in model year 2025 from $1,695 in model year 2020. In the same time period, the Chevrolet Tahoe's jumped to nearly $2,000 from $1,295, and the charge on Toyota Motor's Sequoia SUV increased 53.5%.

When Frank Foulk bought a Mazda CX-50 hybrid last October, he paid a destination charge of more than $1,400, hundreds of dollars more than what he spent the previous time he had bought a car over a decade ago.

"The car companies are sticking a number in there they think you're going to look past," said Foulk, 74 years old, of Geneva, Fla.

A Mazda spokesman said destination charges are set according to transportation costs, which have increased. Toyota declined to comment.

A General Motors spokesman said the charges reflect the overall cost and business considerations associated with delivering vehicles, and the company periodically reviews the charges and adjusts them to remain competitive and aligned with industry practice.

A Ford Motor spokesman said it reviews and adjusts charges as necessary to stay consistent with the industry.

Car buyers used to be able to travel to a factory and pick up a vehicle directly from a manufacturer, negating the shipping costs. Otherwise, automakers levied the fee to help cover the expense.

Starting in 1958, automakers were required by law to disclose the cost of shipping a vehicle to customers. Companies posted the disclosure on a window sticker detailing the various charges a consumer would pay purchasing a car.

Buyers can find the destination charge among a list of costs, broken down on the window sticker, that they will pay to purchase a car or truck. The costs can include add-ons like upgraded floor mats or automated-driving features.

Today automakers generally levy the same destination charge no matter how far the vehicle was shipped. A buyer who lives 10 miles away from a factory pays the same destination charge as someone living 1,000 miles away.

"There's not necessarily an obvious logic to it," said Sean Tucker, managing editor of Kelley Blue Book, a vehicle-valuation and information resource.

Automakers' shipping costs have increased as heavier sport-utility vehicles and pickup trucks have gained in popularity.

More recently, "the manufacturers have been pinched with the tariffs," said Geoffrey Pohanka, a dealer in the Washington, D.C., area. The carmakers might "find they can raise prices in some areas more easily than others, and one would be the destination charge."

The fee can vary by vehicle and manufacturer. The lowest fees start around $1,100, while the highest can exceed $2,600, according to industry data. Some fees have increased a few hundred dollars, while others have gone up by nearly $1,000.

In 2020, before automakers raised prices during the pandemic, the average destination charge was closer to $1,200, according to industry data.

Consumers have challenged the fees. A 2023 class-action lawsuit filed against Jeep-maker Stellantis alleged the carmaker inflated the charge and collected from consumers amounts far above the true cost of delivery to make additional profit.

The lawsuit said Congress intended for the 1950s law to limit the fees to shipping costs alone, and carmakers shouldn't be able to book profit from the charges.

A federal appeals court dismissed the case last October, saying that "no reasonable consumer would be surprised to learn" that a destination charge includes profit.

A Stellantis spokeswoman said the company's charges are competitive with other automakers. She declined to comment on the litigation.

Automakers have mostly held off on raising sticker prices during the past year, though tariffs imposed by the Trump administration have raised their costs by billions of dollars. Stellantis said Thursday that it expected tariffs would cost it an additional $1.9 billion in 2026.

Dealers and analysts say the destination charge is a way for the automakers to help offset tariff costs without raising car prices.

Dealerships fight with automakers about the destination charge because it increases the costs for customers, said Stephen Wade, a Utah dealer with more than a dozen stores.

"It's the escalating cost of doing business," he said.

Write to Ryan Felton at ryan.felton@wsj.com

(END) Dow Jones Newswires

March 02, 2026 05:30 ET (10:30 GMT)

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