USA: GM sued for profiting from destination charges

Two customers of GM have filed a class-action lawsuit against the company over its destination charges.

General Motors has been issued with a class-action lawsuit by customers, claiming that the company has been making profits from destination charges.

According to a media report, the lawsuit was filed by two General Motor customers. While the first one from California paid US$ 1,195 as destination charges for his 2021 Chevrolet Equinox, the second customer from New Jersey bought a 2019 Cadillac Escalade with US$ 995 paid as destination charges.

As per the complaint filed in the lawsuit, General Motors is said to make a 'significant amount of profit' by deceiving customers into paying more than the actual cost of the vehicle delivery. The two customers also claim that General Motors uses destination charges as a way to add 'hidden mark-ups' into its vehicle transactions.

A destination charge is basically the average cost of delivering a vehicle from the company's manufacturing facility to their dealerships. The destination fee is charged to the dealer, who in turn passes it on to the customer by adding the amount to the overall vehicle cost. These charges are usually non-negotiable for customers, who must pay the asking rate at the time of vehicle purchase.

General Motors is said to usually charge a destination fee ranging between US$ 995 for small vehicles and US$ 1,695 and larger models.

There is no official statement or announcement regarding the lawsuit from General Motors.

Source: GMAuthority