September 16, 2025 - Automakers Are Hiding Price Increases

This is the Telemetry Transportation Daily for September 16, 2025 and I'm Sam Abuelsamid, Vice President of Market Research for Telemetry.  

Vehicle prices rose at a fairly steady pace throughout the 2010s, from about $32,000 to $39,000. However, once the Covid-19 pandemic engulfed the world in 2020, there was a series of disruptions that limited supplies of new vehicles and caused average transaction prices or ATP to spike nearly $10,000 in a matter of months. Since 2020, a variety of events have conspired to keep prices high, despite steadily growing incentive spend by automakers. Over the past four years, ATP has hovered between $48,000 and nearly $50,000. The latest of this string of issues is the tariffs that have been imposed by the Trump administration that have impacted the cost of vehicles regardless of where final assembly takes place. 

For a variety of reasons, automakers don't want to be seen as raising prices any more than necessary. Among those is pressure from the administration which has pushed the narrative that tariffs are paid by the country of origin, rather than the importer of the product. Ultimately those costs are largely passed on to consumers, but the administration doesn't want to be seen as imposing a new tax on those American consumers. 

Thus, some automakers are taking advantage of destination fees to hide increases from their advertised prices. The destination fee is a mandatory charge that all automakers apply when purchasing a new vehicle. It's nominally meant to cover the cost of shipping vehicles from the factory to the dealer and preparing them for customer delivery. However, customers have no ability to opt out by taking factory delivery, so it should really just be included in the advertised price. Currently, General Motors is the only automaker to include the destination fee in the prices they advertise. Others show a lower manufacturer suggested retail price and only add on the destination charge at the time of purchase. Since the beginning of 2025, some automakers have significantly increased this hidden fee including Ford. The destination fee for full-size trucks and SUVs has gone from $1,995 at the beginning of the year, to $2,195 in the spring to $2,595 in late summer, an increase of 30%.  Read more about this in the blog post linked in the show notes. 

Thanks for listening.