The term, destination fee or destination charge, as it relates to new-car buying and leasing, refers to a shipping or transportation fee that is added to the MSRP (Manufacturer’s Suggested Retail Prive) or “sticker price” of all new cars.

The fee is not a “fake” or dealer “add-on” fee but is charged to dealers by the factory — the car manufacturer — for transporting the car from the factory to the dealer’s store. It’s unique in that the amount of the charge for a particular vehicle brand/model is the same regardless of how far the dealer is located from the factory. A dealer that might be located across the street from his factory would pay the same as another dealer across the country.

Destination fees typically range from $300 to $900 depending on vehicle make and model.

The destination charge is not marked up by dealers and is simply passed on to customers as part of the price of a vehicle. It is not a “hidden” fee and can be seen on any new-car window sticker. Since dealers treat it as a “passthrough” fee the destination charge is not negotiable in a car purchase or lease deal.  If a dealer lets you think you have negotiated the fee away, you can be sure it has reappeared somewhere else in your deal.