New-car vacation spot prices are absurd: Here is why

You’d suppose the value you see is the value you pay on a brand new automobile’s window sticker, however that’s not the case. Taxes apart, there’s one other cost you might have to remember: the vacation spot cost. There is no use haggling or in search of a reduction on this payment. You, because the automobile purchaser, must pay it — and it is sometimes an additional $1,000. Why? We’ll dive into that.

Client Studies examined the rise of vacation spot charges and located they’ve climbed from a mean of $839 in 2011 to $1,244 in 2020, a large 48% enhance in lower than a decade. Over the identical interval, the value of a mean new automobile has risen “simply” 27%. I be a part of CR in calling for vacation spot charges to be made a part of MSRP and never a footnote to it.

The vacation spot payment is chunky, nevertheless it would not even get put in daring.


Even when built-in into MSRP, one other difficulty would linger: The space to a purchaser’s vacation spot. Sure, automobiles are massive, heavy issues that must journey hundreds of miles to consumers — besides once they do not. How many individuals in suburban Detroit stay a couple of miles from the Ford plant in Wayne, Michigan, however paid the identical $1,195 vacation spot payment on a brand new Ford Ranger that I might pay right here in San Francisco? The identical could be requested of new Hyundai Sonata consumers in Alabama who paid $1,005 to ship a automobile that was made in Montgomery, Alabama.

Wayne, MI, assembly plant distance

A brand new Ford Ranger is produced simply down the road from consumers in metro Detroit, but they pay the identical vacation spot payment as a purchaser in California.


Vacation spot charges are doubtless a pleasant revenue middle for carmakers, however I can not say that definitively as a result of there’s little transparency about what goes into them or why they differ radically between makes and fashions. However I do consider transport and vendor prep are as important part of bringing a automobile to market as conducting crash checks and needs to be folded into MSRP the identical manner. 

Watch my video to be taught why vacation spot charges soldier on as they’ve for generations and what stands in the best way of any carmaker breaking with that dear custom. 

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