Are year-end car sales real or just hype?
Automakers are promoting year-end car sales. But is it worth it to shop now, or is this just a strategy to lure you into the showroom?
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- Automakers are increasing mandatory destination and delivery charges on new cars.
- These non-negotiable rates are rising faster for the 2025 model year than they have been in the past decade.
- Analysts have suggested such fee hikes would help cover the costs of inflation and tariffs without raising sticker prices.
- Detroit automakers have raised destination fees more dramatically than other mass-market automakers in recent years.
Automakers are raising prices on new cars in ways that consumers likely won’t notice as much as they would if they increased the actual manufacturer’s suggested retail price (more commonly referred to as the sticker price).
Automakers are increasing the mandatory fee for listing destination and delivery charges on window stickers.
Destination and delivery charges are non-negotiable charges set by the car company and are usually not listed in the advertisement. Don’t get me wrong, the manufacturer’s costs for transporting the vehicle from the factory to the dealership are covered. Even if you drive to the factory to pick up the car yourself, you’ll still have to pay for it.
Destination charges for 2025 models from nearly every automaker rose faster than at any time in at least the past decade, according to data requested by the Detroit Free Press from Edmunds as part of the USA TODAY Network. Within the past year, the Detroit automaker has increased destination fees for its entire lineup of pickups under the GMC, Chevrolet, Ford and Ram brands from $1,995 to $2,595 for the 2026 model year.
In fact, the last time the average destination fee was below $1,000 was in 2017.
Ivan Drury, director of insights at Edmunds, told the Detroit Free Press about recent destination fee increases, “We’ve seen destination fee increases that are above the norm compared to a typical annual adjustment.” “Almost everyone is guilty to some degree, whether it’s due to tariffs, inflation, or hedging their bets. Only one 2025 model has a destination fee under $1,000, the BMW ALPINA
For example, the destination charge for a 2023 Ford F-150 light pickup truck was $1,795, according to Edmunds data. The price increases to $1,995 for the 2024 model and $2,595 for the 2025 model. The Chevrolet Silverado 1500 has increased in price from $1,895 for the 2023 model to $1,995 for the 2024 model and $2,195 for the 2025 model.
Drury said passing the increased cost to the destination for free rather than increasing MSRP means dealers will eat more of the additional cost of tariffs than automakers.
Drury also said, “Factories can put that additional cost behind the asterisk, and by setting a ‘starting price,’ along with the destination charge, dealers can account for increased costs, even if the vehicle has no or minimal changes from one model year to the next.”
Domestic automakers raise prices
Mr. Drury said that while the recent price hikes are “extraordinary,” automakers, especially domestic brands, have been adjusting fees for years. Over the past four years, the Detroit Three has raised destination fees more dramatically than other mass-market automakers.
General Motors and Ford Motor Co. have raised their destination fees by an average of nearly 40% over the past four years, while Stellantis has increased them by nearly 33%.
The data shows that BMW, Mercedes-Benz and Volkswagen have the lowest destination fees across the industry. Stellantis, on the other hand, has the highest average destination fee of $2,088. Porsche followed at $1,995. GM and Ford also charged $1,750 and $2,024, respectively, above the industry average.
Analysts say the fare hikes are part of a response to rising transportation costs due to inflation. Additionally, depending on the vehicle mix, shipping costs for popular larger vehicles can be higher than for smaller vehicles.
But analysts say the fee increase is the most dramatic since March, when President Donald Trump imposed a 25% tariff on all imported cars and auto parts. Customs duties are taxes paid by importers when goods cross borders. Domestic brands sell some cars made in other countries here, and the cars made here use parts imported from other countries, making tariffs unavoidable. They add billions of dollars to automakers’ costs, and analysts say they will have to pass some of that cost on to consumers at some point.
The destination fee for a 2025 Buick Envision that GM builds in China and sells stateside is now $1,895, compared to $1,395 for 2023 and 2024 models, according to Edmunds data. Destination fees for the 2025 Ford Bronco Sport assembled in Mexico increased by $400 to $1,995 compared to 2023 and 2024 models. The destination fee for the 2025 Dodge Durango, which is built by Stellantis in Detroit, has also increased from $1,595 for 2023 and 2024 models to $1,995.
“They hide some of the customs costs in destination charges,” said Sam Abuelsamid, Telemetry’s vice president of market research. “Because even if you live next to a factory and pick up your car at the gate, you can’t opt out of the shipping fee. The shipping fee should only be part of the price.”
A “tricky” way to cover costs
Abuelsamid said domestic brands in particular are increasing destination charges rather than increasing MSRP (or in most cases reducing MSRP increases).
“Ford, GM and Stellantis have raised prices twice in the past nine months for large trucks and SUVs, from $1,995 at the beginning of the year to $2,195 in the spring and $2,595 in September,” Abuelsamid said. “We have also increased the fees for small vehicles.”
The destination fee for the 2025 Ford Maverick increased from $1,595 last year to $1,695 this year. Prices for the 2025 Ford Ranger pickup truck went from $1,595 to $1,895, according to Edmunds data. The Maverick is manufactured in Mexico and the Ranger in Michigan. The destination fee for the Kentucky-built Lincoln Navigator has increased from $1,995 last year to $2,195 this year.
“These fees are typically not included in the posted price (except for GM) and cannot be avoided,” Abuelsamid said.
In fact, Mr Drury warned that it can be “a little bit difficult to use destination fees to cover costs” as destination fees are considered a non-negotiable part of the car purchase, and if this fee increases and is charged to the dealer, “all the discounts you need to sell the vehicle will come out of the dealer’s pocket.”
Detroit automaker opinion
When asked about the destination fee increase and its causes, GM spokesman Kevin Kelly declined to comment.
“Stellantis vehicle destination charges are competitive with other automakers that sell large full-size trucks and SUVs,” Stellantis spokeswoman Jody Tinson told the Detroit Free Press in an email.
The 2025 Ram heavy-duty pickup truck and the Ford Super Duty F-Series have the same destination charge of $2,095, according to the latest data from Edmunds. The 2025 large GMC Sierra and Chevrolet Silverado by GM cars cost $2,195. All are $100 to $200 more expensive than the 2024 model’s destination charge. Drury said destination fees will be $2,595 for all three automakers’ pickups, regardless of size, for the 2026 model year.
“These rates, which reflect the cost of transporting a vehicle from the factory to the dealer, will be reviewed and adjusted as necessary to remain consistent with the industry,” Ford spokesman Syed Deep said in an email about Ford’s rate increases.
Transaction prices soared in November
Other data shows that consumers won’t be able to escape the high cost of new cars any time soon.
On December 10, Kelley Blue Book released its forecast for the average transaction price of new cars in the United States for November. Average transaction price is the amount consumers pay after all discounts and trade-in offers are applied.
The average transaction price for a new car in November was $49,814, up 1.3% from a year ago and about the same as October’s $49,760, according to Kelley Blue Book, a company owned by Cox Automotive. Kelley Blue Book said the high average transaction price reflects that the market is “heavily influenced by wealthy individuals.”
Prices are also expected to rise this month, as new car prices typically peak in December as a wider variety of expensive cars go on sale.
“The average price of a new car in the U.S. remains near $50,000 and shows no signs of going down,” said Erin Keating, executive analyst at Cox Automotive. “However, it is important to remember that KBB ATP is a measure of what is being purchased, not what is available. Almost half of new car buyers are over 55 and in their prime earning years. These buyers are more likely to be buying a luxury SUV rather than something cheap and cheerful. In November, the $75,000+ price range had more transaction volume than the sub-$30,000 price range.”
Automakers also offered lower incentives. The average incentive package in November was worth 6.7% of the average transaction price, or $3,347, according to Kelley Blue Book. This is a notable decrease compared to November 2024, when incentive spending reached a three-year high of 7.9% of average transaction price.
Jamie L. Lareau is senior auto writer for USA Today and covers Ford Motor Company for the Detroit Free Press. Contact Jamie at jlareau@freepress.com. Follow her on Twitter @Jalalean. To sign up for our automotive newsletter. become a subscriber.
