Chrysler Locks-In Gas Prices

[CadillacSTS2003]

"Chrysler is hoping to jumpstart its faltering sales by guaranteeing customers they won't have to pay more than $2.99 per gallon for most of the gas they use in their new Dodge, Chrysler, or Jeep for the next three years in an innovative new program that starts May 7 and runs through June 2."

http://autos.yahoo.com/articles/auto...NnYXMtY2FyZA--

[jonnyd]

yea i read about that a couple days ago. I think that is a GREAT idea they are doing!!! I dont know how much they will eat it in the shorts though as gas prices are supposed to hit $5 per gallon by the end of the year....its going to be interesting seeing the turnout.

[The Tony Show]

Both lame AND irresponsible. The biggest problem with the economy and the auto industry is people creating hysteria in the media, and now car companies are contributing to it.

$2.99 a gallon is charged to the customer, the additional 66 cents ($3.65 per gallon currently prevails in many large U.S. cities) is charged back to Chrysler, explains Steve Landry, Chrysler executive vice president of North American sales.

The program is limited to 12,000 miles of driving annually based on the EPA combined city and highway fuel economy rating (lead foots may find they don’t get a full 12,000 miles in real-world driving) on the Chrysler vehicle purchased under the program, Landry said.. Thus, if the vehicle gets 28 miles per gallon, the customer will be able to purchase 428.5 gallons of gasoline at the program price, Chrysler said.

.66 cents x 428.5 gallons = A savings of $282.81. Whoopie! Wow! Amazing! Congratulations to Chrysler for using people's fear to bring them into the Dealership for an unprecedented savings of three hundred bucks.

[CadillacSTS2003]

true
but thats using the assumption gas will ONLY rise to its current high....
thats very unlikely
if gas jumps to 10 a gallon within 3 years who's the idiot?
if anything it is a great marketing ploy and kudos to them for it.

[EcSTSatic]

If gas jumps to $10/gal no one will be buying those new cars because no one will be able to afford them. Gas prices affect everything.

[Jesda]

Its very clever!

[jonnyd]

You would be suprised the amount of people who would LOVE to save that $300 sumthin bucks. Now n days the way the economy is thats A LOT of $$ for most. Already in Europe the prices are at $10 per gallon...and I believe its the same in hong kong as well.

The worst part about it...is america is sitting on pretty much the biggest oil fields...jsut USA dosent want to drill their own oil. If things go nuts..there is no possible way that the USA could start their own drilling. IT would take them a year to get it going. America is so stupid. Florida senator wants to not allow drilling within 250 miles of the gulf coast. Yet the chinese are getting ready to drill 75 miles out i believe. How ridiculous is this whole oil deal???

[I~LUV~Caddys8792]

Is this Jim Price's idea? (Is that the guy's name? The former CEO of Toyota?)

[The Tony Show]

My point was that you give up a rebate for the stupid gas card, therefore nullifying any potential savings in the big picture (unless gas goes to $10, which I doubt). That, coupled with the fact that it only serves to create more hysteria about fuel in an already panicked public is irresponsible.

This is just as dumb as Hybrids. $5,000 premium on the price to get an extra 50 miles out of a tank of gas. 12,000 miles per year = 240 gallons of gas saved x $3.65/gal = $876 per year savings. $5,000/$876 = almost 6 years to earn back the premium you paid for the Hybrid, during which time you will most likely incur several thousand dollars of non-warranty expense such as hybrid drive repairs of batteries. Where do I sign up?

[AMGoff]

The planets must be aligned today because we have one of those rare occurrences when I actually agree with STS03.

This is no different than throwing cash on the hood of a vehicle, except they're wrapping it in some really clever marketing. Is it a gimmick? Of course it is... but I give Chrysler kudos for coming up with it. Instead of just giving some sort of cash-back incentive, they're giving it back in a specific area which people are paying a lot of attention to these days.

$4/gal gas prices are right around the corner and who knows how high they will go in the next three years. Even if they somehow level off and prices stay around the $4 mark, on average through the line of applicable Chrysler models, this more or less equates to a $1500 rebate... but again, its a rebate that's pandering to people who are really smarting over gas prices.

I don't think this is in any way as bad of a gimmick as hybrids are... I think hybrids are bad for the fact that they actually encourage people to drive more - which is at the heart of the problem because people really need to alter their driving habits. If anything... something like this might actually encourage people to drive less - especially if they try to stay under that 12K a limit year, so to avoid paying "normal" prices.

But then again... this will only work if people are smart enough to pay those cards off at the end of every month. I normally detest credit cards, but the wife and I use a gas card because we get 5% back on our gas purchases... which means we're currently only paying about $3.23/gal for regular - BUT we make sure to pay that sucker off at the end of the month!

[The Tony Show]

Originally Posted by AMGoff

$4/gal gas prices are right around the corner and who knows how high they will go in the next three years. Even if they somehow level off and prices stay around the $4 mark, on average through the line of applicable Chrysler models, this more or less equates to a $1500 rebate... but again, its a rebate that's pandering to people who are really smarting over gas prices.

Even at $4.00 a gallon $1.00 x 428.5 gal = $428.50 per year x 3 years = $1,285.50.



None of this changes the fact I'd never buy a Chrysler product, but if I were so inclined, I'd rather take a rebate and manage my own gas through better driving habits, thank you. It's a rebate for sheep.

[dkozloski]

Airlines and other large petroleum users have been negotiating hedge contracts for years. This is the same thing on a much smaller scale. I would like to be able to do the same thing with my eating oil bill. It's a killer.

[Sinister Angel]

Originally Posted by jonnyd

USA dosent want to drill their own oil.

Correction, the enviro-hippies don't want us to drill our own oil. I'm all for hitting up Alaska and wherever else there crude.

But in terms of gas, it's not just about crude supply, it's about refining capacity as well, which is a contributor to the price.

[AMGoff]

Okay... now you're just getting hung up on that 428 gallon number.... I said $1500 as an average for those Chrysler vehicles this is applied to... some vehicles it could be as little as $1100 and others upwards of $2K.

This isn't for everyone... this isn't for you, but it's still a clever gimmick no matter which way you cut it.

[hueterm]

It's just like an off-purchase rebate -- half the time, people don't send them in. That's what will happen w/this. All the people who are so dense as to worry about spending an extra couple thousand a year on gas, but will go buy a new car and lose WAY more than that in depreciation will lose their card or forget about it or whatever.

One of the smartest promos I've ever seen -- Chryco will do well w/this. They'll keep their cash and pay it out only if necessary. Just like that "Lifetime" warranty...

I am so tired of the moaning about the gas prices I could scream. I hope it goes to $10/gallon so that the entire economy shuts down and there is rioting in the streets -- and MAYBE there will be enough of an uproar to shut these treehuggers up once and for all. So then MAYBE we can drill our nearby oil instead of the Chinese and build some refineries.

I'm not saying we shouldn't conserve, use alternatives where feasible, develop new technologies -- but we're stuck w/oil for the foreseeable future and we are collectively STUPID if we keep hindering ourselves. Because China and India aren't going to hinder themselves and Russia and the Middle East are going to gouge everyone for as long as they can.