Much hubub has been made over the current Let's Refuel America program in which buyers can choose to lock in the price of gasoline at $2.99/gallon for three years courtesy of Chrysler LLC, but the incentive has apparently been successful. Chrysler announced this morning that the program, launched on May 7th and scheduled to end May 31st, will continue for more than an extra month to July 7th.
The deal is that purchasers who choose the Let's Refuel America program will get a gas card that's linked to their credit card. They can use the gas card at 97% of the nation's gas stations, and while the price on the receipt will reflect the actual price/gallon of gasoline, only $2.99/gallon will show up on the purchaser's actual credit card. The deal doesn't apply to every Chrysler vehicle (the Viper, Challenger, Crossfire, all SRT models, Sprinter, Ram Chassis Cab and Jeep Wrangler are excluded), and there are limitations like a yearly allotment for gallons and a cut-off after 36,000 miles. Of course, customers can also choose plain old cash back or 0% financing, too.
According to Chrysler, however, many are choosing the Let's Refuel American program (we'd love to know a raw number, but none were given in the press release after the jump), and the vehicles with the highest take rate are the most fuel efficient ones in the company's lineup like the Dodge Caliber, Journey, Avenger and Chrysler Sebring. The states that in which the program is most popular are California, Connecticut, Indiana, Ohio and Washington.
So clearly the program is working for Chrysler, enough at least to extend it another month. This means that it's helping dealers sell cars, though we wonder what happens if the cost of gas goes up as much in the next three years as it has in the last three years. Could this program end up hurting Chrysler's bottom line in exchange for the short term gain of selling more cars, or has the automaker somehow hedged its bet against that scenario?
CHRYSLER LLC RESPONDS TO CUSTOMER AND DEALER FEEDBACK, EXTENDS $2.99 GAS GUARANTEE FOR 2ND MONTH
- Chrysler, Jeep® and Dodge dealers' feedback drives mid-month extension of new incentive program
- Consumer interest high for the Let's Refuel America program as average gas price in U.S. rises to $3.80
- Alaska, California, Connecticut and Hawaii now average over $4 a gallon
Chrysler LLC today extended to July 7 the Let's Refuel America $2.99 gas guarantee program, which offers customers the opportunity to lock in their gasoline purchases at $2.99 a gallon for three years, up to 36,000 miles. The program was launched on May 7 for the month of May only, but extended for a second month in response to dealer and customer demand for additional time.
Even before the full impact of the national and local advertising has been realized, the Let's Refuel America program already has created a high level of word-of-mouth consumer awareness, with increased traffic coming into Chrysler's 3,511 dealerships and onto its Web sites. After one week, Chrysler's Web site activity is up 25 percent versus the previous week, with internet leads increasing by 34 percent.
"Customers and dealers across America have told us they like the gas guarantee incentive option, so we are providing a second month for shoppers to take advantage of it," said Jim Press, Chrysler LLC Vice-Chairman and President. "Let's Refuel America, the Lifetime Powertrain Warranty and the New Day Packages are all examples of our commitment to deliver more value and peace-of-mind to our customers."
Let's Refuel America Program Details
Through July 7, Let's Refuel America is available on virtually all Chrysler, Jeep and Dodge compact vehicles, SUVs, sedans, minivans, and pickup trucks, including its five vehicles that get 28 mpg on the highway for an MSRP under $20,000. Not included in the program are the company's high- performance vehicles such as the Dodge Viper, Dodge Challenger, Chrysler Crossfire, and the entire SRT® lineup as well as the Dodge Sprinter, Dodge Ram Chassis Cab and Jeep Wrangler.
Customers who purchase or lease an eligible Chrysler, Jeep or Dodge vehicle have a choice of one of three incentive packages of similar value: Cash back; 0 percent financing (for eligible customers); or the gas guarantee program, which on some vehicles also includes up to $3,000 additional cash back. Only the Let's Refuel America incentive grows in value if gas prices rise. Upon purchase, customers can evaluate the three options with their dealer representative to determine which incentive best meets their personal financial preference and tolerance for risk related to rising gas prices.
"What our customers and dealers like best about this program is the flexibility of three incentive options, each with a unique benefit," Press said. "Some customers need cash back immediately for a down payment; others don't like paying high interest rates; and many are tired of worrying about rising gas prices and want to be protected. We are pleased to offer every customer a choice of what's best for their individual situation."
Customers who select the Let's Refuel America $2.99 gas guarantee program will receive a gas card (linked back to their own Visa or MasterCard) that is valid at 97 percent of gas stations in the United States. Purchases at the gas stations will be for the full price being charged that day, but only $2.99 per gallon will be billed back to the customers' credit card. Chrysler picks up the rest, regardless of how high gas prices rise.
After the May 7 launch of Let's Refuel America and before the full impact of the advertising has been realized, the highest take rates have been on the new Dodge Journey crossover, Dodge Caliber, Dodge Avenger and Chrysler Sebring sedan.
"The most incremental incentives in this gas program are on the company's most fuel-efficient vehicles, which typically do not have this level of incentive available," Press said. "Our customers who buy smaller vehicles put great value on being protected against rising gas prices."
From a geographical perspective, the highest take rates have been in the states of California, Connecticut, Indiana, Ohio, and Washington. These five states are among the 12 highest fuel price states in the country.
"We are pleased that Let's Refuel America seems to resonate with many Americans during this time of gas price volatility," Press said.
From a marketing perspective, Let's Refuel America is supported by national television spots, Dodge Journey ads tagged with the program information and national print, radio and Internet presence.