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May 15, 2008 -- Dissecting Chrysler's gas gimmick

Suzuki and Chrysler are both offering fixed-price gas opportunities to drum up sales on select new models. With Chrysler, you get gas at a fixed price of $2.99/gallon for up to 12K miles for 3 years. Suzuki, meanwhile, is offering free gas for a number of months. There's been no match so far from either Ford or GM (Editor's note: Info accurate as of 05/15/08).

The Wall Street Journal ran some "what if" numbers on a variety of Chrysler models to see if their gimmick holds water. It turns out that gas would have to go up to about $4.10/gallon for their offer to pay off. No numbers were crunched for the Suzuki promotion.

So you've got to decide whether you are an optimist, a realist or a pessimist. The realists will say that gas may go up to around $4/gallon, as it already has in parts of California. The pessimists, meanwhile, will say that gas could go as high as $200/barrel!

Clark, however, is an optimist. He believes the price of gas will get lower. Our demand is already declining in the face of higher prices. Yet there is increased demand from developing economies around the world. So Clark is really in the minority when it comes to his viewpoint.

If it were Clark, he would take a cash rebate instead of the gas option from Chrysler. But you have to decide where you stand…


Unfortunately, Clark won't be able to answer any questions submitted via commenting. If you have a question, please try posting it to our message boards.

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What others are saying

  • Dianes Post - gas ripoff at car dealers
    A lot of states have a 3 day law. You can get your money back if you are not happy within 3 days. If you could cancel the sale, I bet he would re-negotiate. Give it a try . .
  • The govt should try this
    If the Federal Gov't could come out with a rebate program like this, that capped gasoline prices at $3 for the first 20,000 miles of gasoline per family, and raised the prices (and tax) more dramatically after that, I think you would see some real behavior changes. I'm talking $5+ gallon on everything over a threshold. There would have to be considerations for commercial use, but this would tax the recreational use of gas, and subsidize the lower prices. The problem with just subsidizing a tax holiday or forcing lower prices is that it does nothing to demand.
  • dealer gimmicks
    I don't blame the dealers for using gimmicks to sell cars or trucks as the selling of autos will help the economy and save jobs. If you are in the market for a new auto now is the time as prices are relatively low.
  • gas ripoff at car dealers
    I know what Clark says about new cars but I bought a new Mazda 5 because of the great interest rate on the car loan but because I did not mention an ad for 50% OFF GAS for 2 Years when signing the contract the dealer said he was not obligated to tell me about the promotion. I saw the ad 12 hours later but they would not renegotiate. I do think the cost of gas will go higher than $4.00 a gallon.
  • Gas price in the US versus Europe
    You cannot compare Europe to the US. There is one simple reason that they pay so much - taxes. They pay several dollars for each gallon of gas in taxes. That's all. Don't expect that to happen in the US.
  • Auto Dealer Ploys
    I am an optimist but I think gas prices are going higher. Europe is paying around $7.00 per gallon and we are riding where demand is above supply in oil now and that appears to not be changing. But new technologies are coming out Rentek with a new technology in Coal gasification, Li Ion batteries in hydrogen fuel cells in Honda car, 99 Mph and 400 Miles on one tank. A few years and they will be available. Rising prices for gas just brings on better technology.
  • Auto Dealer Ploys
    Why do I NEVER see anything written about the UNBELIEVABLE Documentary fees being charged by Car Dealers? It's beyond my comprehension why there isn't a Publiuc REVOLT against this Hidden AND Exhorbitant charge.
  • Rebate or Free Gas
    I'm with Clark on this, I'm an optimist as well, i have more options to take either the rebate and apply it as a discount on the car, or with excellent credit get the lowest interest rate and or pocket/save the rebate if applicable.
  • Alternate measures...
    What about a scooter? You can get 80-90 MPG on a new scooter. Wholesale direct costs about $1200. Retail around $2K. If you live somewhere warm & travel mostly city (wouldn't recommend on the highway, though it is legal in OH), could save big gas dollars.
  • by the way...
    Gas is already $4/gallon here in Michigan, too - not just in California.
  • new cars are a HUGE loss!
    I could never justify the incredible depreciation loss incurred by purchasing a new vehicle just to save $1 a gallon for three years. If you get 25mpg, over the 36000 miles of those three years you would "save" ~$1500. However, the depreciation would be thousands more, not to mention money spent on financing. New car = bad deal!
  • Gas Prices
    I agree with Clark that gas prices will come down. The price is caused by two main things. The decreased value of the dollar and speculators driving the price of oil above what it should be. I look to see oil prices to fall about 35% to about $82 by October 2008.
  • gas instead of cash
    here is my coment .. I beleave it is best for me to take the cash.. the gas only good for 3 years ore a few month? I might not use that much in time and would loose it.
    thankyou Clark for keeping us all informed
  • THE OIL SPECULATORS
    DID IT EVER OCCUR TO ANYONE THAT THE ONES WHO ARE "BIDDING UP" THE FUTURES ON SWEET CRUDE OIL ARE THE BIG OIL INTERESTS? THEY HAVE NOTHING TO LOSE, AND LOTS AND LOTS TO GAIN !!
  • Gas Card from Chrysler
    I am an insurance agent and I have clients who are looking at getting more economical cars and several have called to ask my option. I have given them the same advise as you. Take the cash because most price freeze offers ie, gas, electric and now petrol haven't shown to be the best decision to make.
    Appreciate your advise
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