Destination and delivery charges are one of those things that car shoppers have come to expect and have little choice but to pay. Many assume that this charge is precisely what it costs the manufacturer to ship a vehicle to a dealership, though a new lawsuit – Mary Hawkins v. Ford Motor Company, recently filed in the U.S. District Court for the Central District of California – alleges that Ford destination charges are actually profitable for the automaker, according to Car Complaints.
The class-action lawsuit was originally filed by the owner of a 2019 Lincoln MKX, who purchased the vehicle new back in 2019. The plaintiff argues that she didn’t know at the time that the $995 Ford destination fee she paid generated a profit for the automaker, and claims that most consumers aren’t aware of this fact either.
“By virtue of the name of the fee itself, Ford misleads reasonable consumers into believing its ‘Destination & Delivery’ fee reflects the actual cost of shipping its vehicles to their ‘destination,’ not the cost of shipping its vehicles plus profit,” the lawsuit reads. The lawsuit doesn’t specify how much of a profit Ford makes on its destination and delivery fees, but alleges that this practice is “deceptive and unfair.”
The lawsuit also points out that Ford’s destination charges for the Ford F-150 have increased 42 percent over the last four years, while other automakers – including BMW, Infiniti, Audi, Mercedes-Benz, and Volvo – have only increased these charges by less than 20 percent over the same time period.
Ford isn’t the only automaker facing such allegations, however. In fact, the same lawyers responsible for this lawsuit also filed a similar suit against cross-town rivals General Motors and Stellantis last month.
We’ll have more on this and all pending Ford lawsuits soon, so be sure and subscribe to Ford Authority for the latest Ford lawsuit news and 24/7 Ford news coverage.
Mary…..SURPRISE!! Companies make products to sell at a profit.
Destination charges are negotiated through the union & are “all inclusive”.
Meaning whether the car gets to ride 50 miles to it’s destination or a thousand miles, same price. Mary, you and your ambulance chaser will LOSE!
While I understand the same fee is charged across the board whether you pick up at the factory or in Alaska the fee should be the average cost to ship vehicles. So if on average it costs you $500 to ship each vehicle then the charge should be $500.
I applaud her – regardless of whether or not she wins – which I believe she will, based upon her assertion that the fee title is “misleading.” I don’t know that it will result in any monetary damages or reimbursement but I think Ford will at least have to change the way they advertise and label the fee. It’s about time this practice was challenged. I’ve always wondered how much profit was built in. When a resident of IL or a surrounding state considers purchasing an Explorer that was manufactured in and shipped from Chicago, that cost is much lower than one shipped to California. I’ve always thought the “destination” fee should be in line with/reflect the actual cost of shipping. IMO.
Rory I believe that she will lose, as manufacturers are required to charge the same fee nationwide because of federal and state laws. Due to that they cannot calculate a specific charge for each vehicle / each dealer, and they could not assess that fee if they could. Or she could prevail and lose in the end, as the only solution to her complaint is to drop the uniform charge, and her California delivery charge will double
They don’t need to calculate the specific charge for each vehicle, they only need to know they spent $1billion shipping 1 million vehicles, therefore the average cost was $1,000 per vehicle and they charge $1,000 whether you pick it up in Michigan or Hawaii.
There’s no winners, just one side didn’t lose quite as much as the other. Only winner is the Lawyers.
Hey I’m a proud owner of a
Mustang GT premium I purchased it brand new 2020 model love it 👌 100% Sadisfide
Same here – 2021 Mustang GT Premium. Order it on St Patrick’s Day and got it exactly 4 months later just like the dealer estimated. Hands down this the best car Ford builds when comparing dollar spend to the amount of fun the car produces driving it 😀
It’s better than it was a few years ago, but many Ford Dealers still add a “freight” charge to cars they sell. They refer to the MSRP in their advertising, then show their discount, and then in the fine print say the sales price does not include “freight” or “dealer processing fee”. The actual price they are selling the vehicle for is often well over the MSRP.
Advertised MSRP has never or hardly ever included the freight charge. That is why the bottom line on the window sticker is higher than MSRP. I think back to the introduction of the first Mustang and the term F.O.B. in the ad, Freight On Board, which simply means the price when loaded onto the transport, the price of delivery being extra. And there was a time when destination charges did vary based on the destination – you can thank the truckers unions for that change
What I would prefer to see is a class action lawsuit against the DEALERS and their usually mandatory processing fee, which I have recently seen as much as $699. If the dealer is making $700 on me then I should be offered a selling price at INVOICE, not MSRP since they also make money on the holdbacks.
Destination fees are increased to hide the total cost of the vehicle because the destination fee is a separate line item on the sticker price and comes after the total cost.
MSRP should be done away with. Manufacturers are tipping the scales to the dealers benefit with MSRP. Buyers should always negotiate price from the dealer invoice pricing. Understanding Dealers actual cost is typically $1-2K below the invoice price.
Destination and shipping costs should not be deceptive. Shame on Ford and other manufactures doing the same scheme.
Hopefully, once the supply chain issues are over and manufacturing levels return to pre-covid levels. Pricing markups will decrease and buyers will have some negotiation leeway.
There are so many ways the dealerships make money without the customer knowing (and that’s OK). Don’t let a dealer tell you they are losing money on a deal. Dealers have dealer holdback money, advertising fees paid back to them, incentives and floor plan bonuses not to mention the .5 point to full 1 point they make from the private banks they steer you to for financing. Then there is the $250 to $300 PDI fee (pre delivery inspection) they get paid by Ford to get every car on their lot ready for sale. It’s an interesting business selling cars and quite profitable
Consider that dealers may have multiple invoices for a vehicle, so exercise care here. Perhaps negotiate for the same exact vehicle (without a trade in to cloud reality) between multiple dealers, preferably at the end of the month and late in the model year may help secure your best deal.
Oh come on! When you buy a car you agree to the bottom line price that you pay. Next these Bozos will sue because the steering wheel doesn’t steer itself. These frivolous throw enough crap against the wall and see if it sticks cost all consumers in the end. The legal costs to defend the suit will just be added into the manufacturer’s margins. You can’t fix stupid.
I’m looking at the window sticker for a 2021 F150 XL at my local dealership right now it says $1,695 for “Destination and Delivery” after the MSRP. Crazy.
Wow imagine, a car manufacturer trying to make a profit ! Her name isn’t Mary, it’s Karen.
When I was chairman of Ford Canada’s National Dealer Council I fought to allow customers to pick up their vehicles at the plant and thus save the ‘Freight Charge’. We learned that the ‘Destination Charge’ is calculated by adding up ALL the costs to move parts to and between plants as well as the actual freight charge to dealers all added up and averaged out. It is thus not an actual figure for delivering the unit to the dealership.
These lame arse class action suits are insane. Most people look for customers, these tort lawyer scum look for people to clump together so they can take someone else’s money. Why would anyone be surprised they actually make a profit on a service. Their employees are part of the shipping process for one. If I have an employee doing anything, I want to make money off their work. Can u imagine anybody asking you what you make money from. She is from California tho and it is against an evil polluting car company.
Good. These fees are increasing at astronomical rates and need to be collared. Not sure that Ford is the best target, though. Others, like Stellantis in particular, are charging fees that are beyond believability. Regardless, the all need to be reigned in. Next up…paint charges!
I love my 2021 Ford ecosport, u didn’t even look at the destination charges when I purchased it, but I guess $1245 is a bit steep.