Honda Hit with Class Action Over Allegedly Inflated ‘Destination Fees’ for New Vehicles

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A proposed class action alleges Honda has artificially inflated the purchase price of its vehicles by charging “destination fees” that are substantially higher than the actual cost of transporting the cars to dealerships.

The 18-page lawsuit claims Honda has flouted a federal law that requires each vehicle to disclose on its “Monroney sticker” the true cost of transporting the car from the point of manufacture to the point of sale, and has instead jacked up these charges in order to “arbitrarily inflate” the purchase price of its vehicles. In doing so, Honda has also run afoul of a New Jersey law meant to protect residents from misleading commercial practices, the case argues.

The suit explains that the Automobile Information Disclosure Act, passed in 1958, requires manufacturers to ship new vehicles with a window label, known as a “Monroney sticker,” that discloses certain information about the car, including its make, model, serial number, installed equipment, manufacturer’s suggested retail price (MSRP) and any charges for the transportation of the vehicle to the dealership from its place of manufacture. Per the case, the latter charge is often labeled on a car’s Monroney sticker as a “destination fee,” “destination charge” or “destination and handling fee.”

The lawsuit alleges, however, that the destination fees for Honda vehicles “bear no relation” to the actual cost of delivery to the automaker’s dealerships. Per the suit, the fees remain the same even when the distances between dealerships and the vehicle assembly plant are vastly different.

“For instance, a 2022 Honda CR-V buyer pays the $1,225 destination charge — whether they’re in Seattle or in Indianapolis, which is thousands of miles closer to the Greensburg, Indiana plant where the CR-V gets built,” the complaint contends.

Citing a Consumer Reports investigation, the lawsuit says major automakers have increased destination fees at an average rate of more than 2.5 times the rate of inflation over the past decade, with Honda, according to the suit, doing so at a faster rate than others.

Per the lawsuit, Honda’s “sharp increase” in destination fees is “unexplained and untethered to any metric.”

“Such a stark lack of transparency about how destination charges are derived and the alarming rate that they’ve been increasing without any explanation whatsoever constitutes a patent violation of the letter and spirt [sic] of the Monroney Act,” the case alleges.

The suit further argues that Honda’s failure to itemize pre-delivery services, including destination fees, as required by New Jersey law leaves consumers “completely in the dark” and deprived of accurate information when heading into negotiations on vehicle prices.

The case looks to cover New Jersey citizens who purchased or leased a Honda vehicle from a Honda-franchised dealership at any time since October 2016.

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