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Prices, Delivery Charges Sneaking Higher

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Old Jun 23, 2008 | 06:11 AM
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Exclamation Prices, Delivery Charges Sneaking Higher


Bugatti Veyron 16.4 sticker price includes an astounding $40,000 delivery charge.

DETROIT — OK, it's shaping up to be one of the worst years for new-vehicle sales in more than a decade. So if you're in the market to buy a new ride, you should be able to drive a killer deal, no?

Not so fast. Demand is down, but that isn't stopping a lot of automakers from jacking up their prices this year. Think of it as the old department-store cliché: marking them up so they can put 'em on sale.

The weak dollar, escalating materials costs and unfavorable exchange rates for almost all imported models means manufacturers' profit margins are being squeezed — so despite a lousy market that normally would dictate lowered prices, many base prices actually are going higher.

And watch for another sneaky increase: jacking up those destination and delivery charges. Data from Edmunds.com indicates delivery charges are all over the map — and could be expected to keep rising.

BMW, for one, just announced it is raising its base prices across the board. Increases vary by model, but one example: The base price of the 535i sedan was increased June 1 by $450, to $50,625. But the Bavarians also are slipping in another, less obvious "fee" — a hefty hike on delivery charges. In the 535i's case, delivery goes from $775 to a plump $850.

In some cases, delivery charges on some pretty "normal" vehicles are approaching four figures. There's an interesting chart showing delivery charges for a variety of new models over at Edmunds AutoObserver.

BMW's $850 destination fee is chump change compared with the delivery charge for the $1.5-million Bugatti Veyron 16.4. You could practically buy yourself a Corvette commuter car just from the Veyron's thundering $40,000 destination charge. Edmunds data says 2008-model destination charges run from a low of $560 (Dodge Caliber) to the Veyron's $40,000.

Chrysler, despite a crushing sales decline so far this year, is raising prices by 2 percent for 2008 models. And proving that currency exchange rates are starting to hit hard, Chrysler's got a bold $970 destination charge on the barely alive Crossfire coupe, which is imported from Europe. Chrysler's mainstream domestically produced models have more reasonable destination fees, such as $670 for the new Challenger, one of the company's first '09 models.

Edmunds.com's Ivan Drury said even price increases and destination-charge jack-ups can be dealt with, though, because in this lousy sales environment, dealers are hungry to sell.

"Although destination charges are often seen as 'non-negotiable,' he said, "consumers must keep in mind that as long as you can negotiate the final price of the vehicle down, some of these increases might not be felt."

What this means to you: If you're heading out to buy, closely check the price of this year's model versus last year's. If the base price and/or destination charge is up, there's probably more room to negotiate the total price. — Bill Visnic, senior editor, Edmunds AutoObserver
Source: http://www.edmunds.com/insideline/do...cleId=127595#2
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