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Chrysler to Make Gas More Affordable?

Posted May 14, 2008 11:42 AM by julie
Pathfinder Tags: chrylser gas prices jeep

There's a catch, of course, you've got to buy a new Chrysler car (Jeep, Chrysler or Dodge).

Chrysler is offering a new program which would cap the gas price at $2.99, by using a special credit card at the pump, for drivers who purchase or lease a new Jeep between May 7 through June 2. The special gas price would apply over the next three years. The Jeeper in me says, "Sweet! Cheap gas!" while the realist in me says, "Shouldn't they be using that money to develop more fuel efficient vehicles?" Is it worth it? What do you think?

Used with permission from the Jeepworld.com Blog.

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#1

Re: Chrysler to make gas more affordable?

05/14/2008 12:33 PM

This is just a new incentive to buy. They're replacing the "Cash back, low apr financing, manufacturer rebates" with this gas card thing. You're still going to pay the same for the car that you would have with one of these other "deals".

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#2

Re: Chrysler to make gas more affordable?

05/15/2008 5:12 AM

This seems like a huge step in the WRONG direction. They are giving people incentives to buy less efficient cars by bribing them with the one thing that they will need. This will of course give drivers of these cars less incentive to conserve thus driving the price of gas up for everyone in the long run. If Chrysler would build more fuel efficient cars then their customers would need to buy less gas and this would save the consumer money on both ends because it would also help to conserve the supply. This deal is just plain stupid for lack of a better description.

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#17
In reply to #2

Re: Chrysler to make gas more affordable?

05/20/2008 8:39 PM

You would ask Chrysler to unmanufacture the vehicles? How efficient is that?

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#3

Re: Chrysler to make gas more affordable?

05/15/2008 7:24 AM

If I heard the ad correctly there is a limit of gallons that can be purchased at that price per year. I believe it was based on 12,000 miles. Could be wrong.

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#4

Re: Chrysler to make gas more affordable?

05/15/2008 8:09 AM

Here is their site.

http://www.chrysler.com/en/refuel/index.html

Here is a quote from the site. "The card may be used to purchase enough fuel at $2.99 per gallon to travel up to12,000 miles per year in each of the next 3 years." That catch phrase is "up to 12,000 miles".

As stated by others, just a gimmick to sell cars/trucks with bad mpg ratings. I drive a Chevy 1/2 ton that gets 16mpg. I need it to pull trailers and haul materials. I would love to see a truck that can do everything this one can and get 32 mpg. Put the money into research. The new Silvarado coming out is getting better mpg ratings by turning off cylinders when the extra power is not needed. As I understand it this is something Cadillac has been doing for years.

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#8
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Re: Chrysler to make gas more affordable?

05/15/2008 9:36 AM

I'm only 30 and have never owner one, but I've heard people say that the 1/2 trucks built in the 1980's had MPG in the mid 20's. Now the 1/2 trucks today have much more power and payload capacity but it has me thinking if it's worth restoring an old one for daily use.

I've got an '05 Superduty with the 6.0 diesel. It gets 16-17MPG "unloaded" whereas the previous generation got 20-21MPG. I believe the emissions equipment plays a big role in this particularly in turbocharged vehicles. So much energy is wasted "recompressing" oxygen deprived exhaust gas by feeding it back down the intake. The EGR principal I see as the industries desperate measure to meet new EPA guidelines. It may reduce the harmful hydrocarbons by % volume but that total volume is now much greater.

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Anonymous Poster
#18
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Re: Chrysler to make gas more affordable?

06/17/2008 8:12 AM

Hello

Contact Bruce Crower of Crower Cams and he will assist you in selecting the correct parts to increase your gas mileage.

TeamSarge

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#5

Re: Chrysler to make gas more affordable?

05/15/2008 8:17 AM

It's lame. It's just marketing the cash rebate in another way. For most vehicles the cap is 700 gallons per year. If gas was a steady $3.99 for those 3 years, it would be equal to $2100. I'd take a cash rebate for $2k before accepting that.

However if gas was jumping to $5, 6, or 7gl then it would be a different ballgame! But then Jeep vehicles suck in terms of MPG (pun intended) so after the 3 years you'll be paying.

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#6
In reply to #5

Re: Chrysler to make gas more affordable?

05/15/2008 8:43 AM

Chrysler will only hold the $2.99 price if gas remains $4 or less. So yes, the rebate is essentially $2100, and in order to get the card you're giving up a cash back rebate of $2500 at the time of purchase.

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#7
In reply to #6

Re: Chrysler to make gas more affordable?

05/15/2008 9:20 AM

So in essence, you'd have to be a sucker to accept that "deal."

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#9
In reply to #7

Re: Chrysler to make gas more affordable?

05/15/2008 9:51 AM

Pretty much. they've already manufactured these gas guzzlers so now they have to sell them. I'm sure that other car companies will come up with similar ideas. One local dealership here is running radio ads with deep discounts on large trucks and suv's trying to clear them off their lot.

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#10

Re: Chrysler to Make Gas More Affordable?

05/15/2008 11:01 AM

Clever, but environmentally sleazy. "Buy one of our gas guzzlers, and we'll help you put fuel in it." Oh, great.

Are they intentionally helping to fund terrorism by artificially lowering the cost of gas, thereby driving up gas consumption? The rebate would be better spent in creating vehicles with better fuel efficiency -- then consumers would save money and reduce pollution, regardless of the cost of fuel.

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#11

Re: Chrysler to Make Gas More Affordable?

05/15/2008 2:02 PM

Hats off to Pretend #5 for seeing the true nature of the offer...although I wouldn't be quite as...adamant.

It depends on one's particular preferences and situation whether it is, or approaches being, as "good" a deal as it seems on the surface. Like any "dealer incentive" program, those who pay in full or purchase large equity at favorable terms are likely to be "winners": those who finance over long (more than three years) terms and upside-down in equity are going to wind up...suckers (but they'll probably never know it). As with any car purchase, smart buyers will calculate the total purchase price cost, including a liberal estimate of their driving habits, including a conservative appraisal of the three year's future value of the gasoline rebate offer.

Primarily, as Pretendengineer states, it's a rebate program, but the question is: What is a rebate program, really? The "rebate shopping" public is not supposed to know that, but it's a loan in reverse...where the buyer (kindalike) extends a loan to the seller. The difference between the price paid and the (customer perceived) discount (seller markup that it descibes as "your savings") is the loan principal. The principal, without interest (without compensation for relative money depreciation), is repaid to vehicle buyer (lender) according to terms and limitations set by seller (borrower). Seen from the seller's perspective, these "little loans" add up to a very substantial amount drawing interest in Chrysler's bank account, or return as otherwise invested. In the end, the value to car buyer depends heavily on what price is paid for the vehicle...assuming that remains negotiable (if at all, or to the degree it might on a vehicle model [such as Jeeps] in fairly high demand).

There are some pitfalls...and this explains in part the necessity of using an indirect (a plastic) method of disbursement (or, better said, method of accounting). One would entail the time required to obtain credits against purchases. For another, the value of the rebates (of any and all gasoline-for-cash loan repayments), when "paid" (when credited), will be reduced by the amount differential of any ad valorem tax as to the difference that tax bears between full gasoline pump price and the $2.99 "special" price. That is: as to the portion of any ChryslerCard credit that goes to reimburse a tax on gasoline value, the vehicle buyer's loan to Chrysler will amortize (will lose value to vehicle/gasoline buyer faster) based on the full price of the gasoline, not the $2.99 price.

So then, seen from the "banker's trickery" perspective, Pretend's implicit admonition to "take the money now" is prudent advise, provided the same or nearly the same money amount (i.e., the same "cheap gas program" present value) is made available by Chrysler to be taken...which it might not, at least not to all buyers.

Secondarily, the gasoline program could portend both good news and bad news for vehicle purchaser and non-purchasers alike, for example: that Chrysler is "banking" on gasoline prices stabilizing or lessening over the next three years; and on interest rates increasing over the same period

It is difficult to see how "using the money" instead to improve vehicle fuel efficiency does much good for someone wanting to purchase a vehicle now. And unless fuel prices decline dramatically, fuel price will itself remain a fuel economizing factor in terms of how much use, how much mileage, Chrysler product owners are able or willing to accumulate on their newly purchased vehicles.

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#12

Re: Chrysler to Make Gas More Affordable?

05/15/2008 7:15 PM

It is just another way to continue the training of us to believe that 3 or even 4 dollar gas is a bargain!

Last year three dollar gas was horrifying this year we think it is a bargain.

We are having ethanol cramped down our gas tanks and we are supposed to think we are saving the environment - ethanol has about 77,000 BTU per gal and gasoline 115,000.

OH well - the training goes on.

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#13

Re: Chrysler to Make Gas More Affordable?

05/16/2008 3:15 AM

So you have to buy an ugly heavy innefficient car first.

Or am I thinking of Chevrolette ? I dunno...all those American motors are butt ugly.

Del

(OK ok naughty stereotype teasing...baaaad kitty.... I shall get mrs Cat to spank me)

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#14
In reply to #13

Re: Chrysler to Make Gas More Affordable?

05/16/2008 9:14 AM

Starting back at the end of WWII ads started to make the automobile a sexy thing.

This was one of the best working, public training, programs in history. And it still works!

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#15
In reply to #14

Re: Chrysler to Make Gas More Affordable?

05/16/2008 10:30 AM

Yup...but the most sexy cars are designed in....(fill in the country of choice) Italy?

Del...

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#16

Re: Chrysler to Make Gas More Affordable?

05/20/2008 3:56 PM

unless your a milionare- the loss you take on will never recover any gas savings. The only exception is to hold on to that car like me. The last new car I purchased in 78, I still drive.

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#19

Re: Chrysler to Make Gas More Affordable?

06/27/2008 3:11 PM

Hi Julie,

Folks could sure use a break at the pump, and so we'll see how this promotion went for Chrysler. I'll listen for the numbers on PRI's "Marketplace" program during my evening drive.

Related update: Within the past week, Chrysler announced a new promotion: "WiFi"-ready vehicles. Wondering if they'll be offering this on their Jeeps as well?

Lots to think about with this latest promotion, but the idea of streaming my favorite internet radio stations as I travel down the highway to work appeals to me very much. :)

- april05

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Anonymous Poster (3); april05 (1); Blink (1); CowAnon (1); d_m_rosenberg (1); Del the cat (2); jmart23 (2); julie (1); master of none (2); Pretendgineer (3); The Mechanic (2)

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