It’s Business, And It’s Personal

Lawsuit targets GM’s destination charges

On Behalf of | Jun 4, 2021 | Business Litigation |

If you have ever bought a new car, you know it can be a bewildering experience. You see the sticker price, but then you find there are other fees and charges you weren’t expecting. Perhaps you can negotiate some of these down, and perhaps you can’t.

A new class-action lawsuit alleges that U.S. automaker General Motors took advantage of this confusing process to squeeze more money out of consumers through so-called destination charges. These are fees the automaker charges consumers for delivery of vehicles.

What was covered by the charges?

According to the lawsuit, these fees could be as high as $1,695. This is a significant amount of money for most Americans, but can seem minor when compared to the price of a new car. Many car buyers accept the charges without thinking too much about them. At any rate, sellers did not allow buyers to negotiate on these charges.

The problem, according to the lawsuit, is that GM represented the charges as covering the actual costs of delivering a vehicle, without informing consumers that it was in fact making a profit from the charges.

Researchers have noted that destination charges have been rising rapidly in recent years. Consumer Reports found that they rose 30% between 2011 and 2020, which was about two and a half times the rate of inflation over that period. In their defense, automakers say the actual costs of delivery have risen as consumers increasingly choose SUVs and other larger vehicles.

The lawsuit was filed on behalf of consumers who had purchased GM vehicles in two states. The claimants seek restitution of the money they paid for the destination charges.

Consumer protection lawsuits can be complex. In many cases, it might not be worthwhile to an individual consumer to go through the hassle and expense of filing a lawsuit on their own, but by banding together with other consumers through a class-action lawsuit, they can better assert their rights and seek justice.