• May 6, 2008
We knew critics of Chrysler's $2.99 Gas Guarantee would crawl out of the woodwork before too long, and here they come. Automotive News reports that The Union of Concerned Scientists has called Chrysler's program a "cynical deal", noting that at today's current average price of $3.61/gallon, a customer would save about $400 a year under Chrysler's program. Being the smart folk they are, the scientists also pointed out that customers could save the same amount from a 3 mpg bump in fuel economy over 15,000 miles or a year of driving, and that better fuel economy also continues saving the customer money after three years. Damn, scientists are so smart with the math.
The criticism hasn't stopped Suzuki, however, from announcing its own free gas deal. For vehicles purchased between May 1st and June 30th, Suzuki is offering 0% financing and three months of totally free fuel in its "Free Gas for Summer" program. Buyers will basically get a stored-value credit card that's charged with a different amount of money depending on the model purchased.

These incentive programs are nothing but promotions designed to grab headlines and make buyers feel like they're getting more money back than they actually are. Playing off the media's hysteria over high gas prices, Chrysler (and Suzuki) is betting buyers will feel that paying $2.99/gallon for three years is more valuable than a $2,000 cash back rebate. Trust the math, it's really not. Nevertheless, it will likely sell more Chrysler, Dodge and Jeep vehicles than a boring $2,000 rebate would.

[Source: Automotive News – sub. req'd]


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  • 39 Comments
      • 6 Years Ago
      Car companies are offering rebates all the time on their vehicles. How come if one of the rebates is for gas people start to whine and wet their pants?
      • 6 Years Ago
      What the scientist say is true and logical. Chrysler knows this as well but they are stuck between a rock and a hard place. It takes years for them to turn around this company and in the meantime they need to move vehicles. I think when this gas card idea got approved at their board meeting a bunch of people in the room lowered their heads but what can they do?
      I dont blame them.

      In 2014 selling gas guzzlers and giving away 2.99 gas cards would be inexcusable
        • 6 Years Ago
        In 2014 it would be perfectly fine if you would just let us drill where the (American) domestic oil supplies are. China's drilling 50 miles off Florida's coast, but because of people like you my gas is sourced from Canada, South America, the Middle East, or worse. Thanks.
        • 6 Years Ago
        I agree. And by the way...

        "Damn, scientists are so smart with the math."

        "These incentive programs are nothing but promotions designed to grab headlines..."

        ... so, John, when UCS points out the fallacy inherent to "free gas" programs, it's whining worthy of ridicule, but when you do it, it's hard-hitting news? C'mon.
      • 6 Years Ago
      I wondered how we could had reacted IF (and it's big "if") Toyota decided to go with the gas card to move their Sequoia, Land Cruiser, Tundra and Tacomas?

      Looks like I opened a Pandora box and a can of worms ;-)
        • 6 Years Ago
        I'd be happy if they had to offer -any- incentives. Boycott Honda! Make them offer me 0% financing on the Si!
        • 6 Years Ago
        If Toyota or Honda had came up with a similar scam (and Chrysler's is a scam, by virtue of requiring a credit card), it would be brilliant and proof of Toyota/Honda's concern for their customers; glass camshafts and spontaneous combustions notwithstanding.
      • 6 Years Ago
      News Flash!

      Americans are idiots.
      • 6 Years Ago
      Pff...How is this a good idea? I bet this idea was pitched by Exxon Mobil or shell.

      Why do I think this? Well, think about it. "Free" gas or "discounted gas" could distract customers from wanting vehicles that use another source of energy besides oil. This, in turn, will actually *increase* the amount of oil used (if something is discounted or free, we use more), and this will *increase* the price of oil. Anybody who falls for this is a fool for not realizing the real reasons behind this.

      There is no such thing as a 'free lunch'. The 'free' or 'discounted' gas will be paid for somehow. And the person who is going to pay for it, is right in the mirror.
      • 6 Years Ago
      The math is done with a $3.61 average?

      Gas here is 3.89 and over 2 years it will go up and up and up... Not remain constant
      • 6 Years Ago
      I fail to see any problems with this promotion. Its not like the people getting this deal arnt also taking 4k off the price. Some people are hesitant to buy trucks (jeeps entiire lineup) because of fuel cost. They dont care about being eco friendly they just dont want to feel ripped off at the pump. This solves that issue for them. I know if I hadnt just purchased a car last summer Id be inclined to look at some Wranglers right now.
      • 6 Years Ago
      There are pros and cons with any rebate. But I can't complain about this one too much. Sure, right now it may only be worth $1500 or so, but everyone here is pretty sure that gas isn't getting cheaper. As the price of gas goes up, so do your savings. I wouldn't consider this a reason to buy a Chrysler/Jeep/Dodge, but if I wanted one this would just be icing on the cake.
      • 6 Years Ago
      I would think the $2.99 gas incentive would be attractive when buying an under 25-grand vehicle, because you really don't see the two-thousand cash back deals on the cheaper cars. Usually more like $500. You could certainly get more than that in discount gas over three years.
      • 6 Years Ago
      Well, if the scientists were that smart, they would realize the car companies are not crying wolf when they say they can't meet proposed CAFE standards without putting north of $4000 under the hood for each vehicle. Even at $4/gallon, Chrysler would pay max $1 per gallon (or less if they negotiated it right). With a 15mpg car, driving 15,000 miles per year (good average), it is 1,000 subsidized gallons or $1,000 per vehicle. For 3 years, discounted, it is less than $3,000. If I were Chrysler, I'd be doing the same. To recoup $4,000 of cost, the MSRP would have to be $5,500 higher, at least, which is doubtful consumers would pay. And technologies for fuel economy that can be under 4,000 (start-stop, reduced drag, low RR tires, etc.) don't deliver even 1 mpg improvement. Pure business.
        • 6 Years Ago
        I call bull. Chrysler built a small car that regularly got over 30mpg and FWD cars that could approach that number on the highway less than ten years ago. They instead chose to replace them with thirsty RWD cars and a small 'entry level crossover' with the mileage of a large car.

        It's not that they can't do it, it's that they don't want to spend the money to do it...or to do it RIGHT.

        • 6 Years Ago
        Almost any car had better fuel economy 10 years ago. A 1978 Ford Fiesta had 35mpg combined, and 43mpg highway. Off course, they did not have AWD, all the airbags, all the electronics we want today.

        And the key words in your comment are "small car". Cars in the US became bigger. Today, the median size of the US car fleet is a Chevy Equinox sized vehicle. In Europe, the median size vehicle is the size of an Aveo.

        The manufacturers have out in the showroom cars of all sizes, but guess what - until recently, smaller cars were not selling as well as bigger cars. Now with high gas prices, the market is shifting. High gas prices in fact work the same way as gas taxes to the consumer, which by the way, is what OEMs keep proposing. I'm not much of a Lutz fan, but on this one I agree... "CAFE is like trying to fight obesity by requiring tailors to make only small-sized clothes".

        So back to the point, c'mon, manufacturers are not evil schemers trying to screw people (or why are many dancing with bankruptcy), nor full of stupid engineers that can't design affordable cars with better FE and all the amenities, performance and safety that consumers demand.

        Chrysler and Suzuki are just going for the alternative that makes more financial sense, If gas goes to $6 (the equivalent cost of gas in many countries), then we'll see more of the smaller cars, and more people willing to pay for hybrids and advanced fuel technologies. Until then, let's roll those gas cards
      • 6 Years Ago
      Before we get too holier than green lets step back and stop imagining that all people are bad and you are the new Mother Theresa. While most people do not need SUVs, some do and some live in snow areas where 4WD is important to get to work or school or to make your rounds on business. The Chrysler idea does help those folks. If someone is going to go out and buy a Durango without need for a big utility vehicle, then they are stupid and will likely do it anyhow. The plan that Chrysler has does have some diamonds. The Jeep Compass, if driven with some sense, will deliver 24mpg around town and close to 30 on the hwy. The car has 4X4 and will dig through snow like the ski patrol. The amount of gas allotted is 1500 gallons (for 3yrs thats 36K miles a year!)) and that is more than the average driver will use in a year. The Jeep Patriot is not as efficeint but the Compass is great. It is listed among the top ten fuel efficient SUVs in the US. If the program inspires people to go get a Compass they will still be efficeint after the 3 yrs deal is over. And don't forget that there a tradesmen (you know those dirty little working people) who need large PU trks so the 2.99 deal just helps them out. The others who buy gas pigs for sport or image are goofy and no amount of price will stop them from being goofy, its hereditary. Don't diss the program, look to use it to your advantage and the Jeep Compass is one good way to be efficient, get a gas break and still be able to go in the snow or sand. Its not a trail car, its transportation and pretty neat and comfortable as well.
      • 6 Years Ago
      can anyone explain to me why the UCS and others arent upset about Toyota and Nissan offering thousands in rebates on their V8 pickups and SUVs? How is chryslers deal worse than that? shouldnt Toyota and NIssan be concentrating on making 25mpg V8 pickups instead of offering rebates on gas guzzlers?

      oh never mind, they arent American brands so they shouldnt be criticized. My bad.
        • 6 Years Ago
        Probably because they aren't proposing a gas card plan that has few claims of saving drivers money--in terms of improving gas mileage so that gas price itself (amongst larger environmental concerns) isn't as much of a burden.

        I doubt they're playing favorites as you assume.
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