Jessy Edwards  |  May 5, 2021

Category: Auto News

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Dealerships Added Exorbitant Destination Fees to Vehicles, Class Action Lawsuit

Auto companies are adding exorbitant “destination fees” on cars at dealerships in order to maximize profits, and deceiving customers about the nature of those fees, a new class action lawsuit alleges.

Plaintiffs Cregory Cole and Kimberly Enright filed the class action Tuesday in the Eastern District of New York, alleging FCA and Stellantis violated state law by hiking up destination fees on vehicles for no other reason than to increase their bottom lines.

A “destination fee” is generally understood to reflect the manufacturer’s average cost of delivering a vehicle to a dealership, charged to the dealer and passed on to the purchaser or lessee. Consumers expect when they pay the fee that they’re covering an auto manufacturer’s cost for the delivery of the vehicle as part of the cost.

However, the class action lawsuit alleges that since at least 2015, FCA and Stellantis have been hiking up the destination charge of each new Chrysler, Dodge, RAM, Jeep and FIAT-branded vehicle offered for sale in the United States.

“Unfortunately for consumers, the amount of Defendants’ Destination Charge increased sharply over the years and currently sits at a whopping $1,495.00 per Class Vehicle.”

The destination charge is marked on a window sticker of each vehicle, the class action alleges, and is not listed as negotiable. As a result, consumers “are forced to pay the exorbitant Destination Charge and do so based on the belief that it is a legitimate charge directly related to the cost of delivering the Class Vehicle,” the class actions says. 

FCA and Stellantis include a significant amount of profit in their charge, the claim contends, deceiving customers into paying far more than the actual cost of vehicle delivery, and creating a “huge profit center” for themselves.

The consumers say, while fuel and shipping costs have remained fairly constant over the last decade, the increase in FCA and Stellantis’ destination fees during that same period has been “astronomical.” 

A recent study by Consumer Reporters found destination charges rose an average of 90 percent on Chrysler, Dodge, and Jeep-branded vehicles since 2012, and 114 percent on Fiat-branded vehicles, according to the class action. The charges on the Jeep Cherokee, specifically, rose to $1,495 in 2019, up from $995 in 2016 — a fifty percent increase in three years. 

“The destination charge allows Defendants to extract hidden markups on the sale of the Class Vehicles from unsuspecting consumers.”

Cole said he paid the $1,495 destination charge on a new 2018 Jeep Wrangler from Garden City Jeep Chrysler Dodge Ram in New Jersey. Enright says she paid the same on a new Jeep Grand Cherokee from Seaview Chrysler Dodge Jeep Ram in New York.

The class action seeks to represent anyone in New York or New Jersey who purchased or leased a new Chrysler, Dodge, RAM, Jeep and FIAT-branded vehicle and paid a destination charge.

The consumers are suing for violation of New York General Business Law and the New Jersey Consumer Fraud Act, and for unjust enrichment, and are seeking restitution, damages, interest, fees, costs and a jury trial. 

Meanwhile, over the years FCA has faced criticism from consumers, with a range of lawsuits and class action lawsuits resulting from allegations regarding the operations of Fiat Chrysler Automobiles. These allegations have ranged from claims that the vehicles are defective, claims of the company not honoring lifetime warranties, claims of excessive oil use, and more.

Click here to learn more about the latest FCA class action lawsuit updates, the potential lawsuit settlement amounts, and learn about the news updates to discover if there are any FCA settlements or class action investigations that you may be able to join. 

Did you pay a destination fee you thought was too high? Let us know in the comments! 

The plaintiffs are represented by Jason H. Alperstein, Jeff Ostrow and Jonathan Streisfeld of Kopelowitz Ostrow Ferguson Weiselberg Gilbert and Jeffrey D. Kaliel and Sophia Gold of Kaliel Gold PLLC.

The FCA Stellantis Destination Fee Class Action Lawsuit is Cole et al., v. FCA et al., Case No. 9:21-cv-02473, in the U.S. District Court Eastern District of New York.

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7 thoughts onDealerships Added Exorbitant Fees to Vehicles, Deceiving Customers, Class Action Claims

  1. Jeanne Dodd says:

    I got a dodge journey. They charged me that plus had a hidden paper stating we couldn’t take them to court under the AAA lemon law. I had computer issues they knew about sent me to 4 different dealerships to see if they could find the problem but I didn’t know they called them and told them not to tell me the truth. It took a brand new service man to slip and told me of the issue and I asked for a print out and that is how I won my lemon law arbitration. But I got no money they just took the car back and paid loan off.

  2. Angela Jackson says:

    Add me i bought a 2019 Chevrolet cruz from south point Chevrolet and was charge a destination fee?

  3. Lauri Johnson says:

    I bought a 2020 Jeep Grand Cherokee in AZ. Did I pay too much for a destination fee?

  4. Wend Heichelbech says:

    I bought a 2018 Ford and a 2017 Jeep and was told by both dealerships that the fee was not negotiable .

  5. Danny Ho says:

    Holy Crap! I just bought a brand new Honda and there is a charge of Destination Fee! Please add me!

  6. LISA HAWKINS says:

    Please add me

  7. Susan Creviston says:

    We bought a 2019 Cherokee Jeep. We paid $1445 for destination charge. They build those Jeep’s in Belvedere Illinois and the car lot Jack Wolfe’s is about 1 mile away. Get me in this lawsuit.

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