Lately I’ve noticed commercials for a special car buying incentive offered by Chrysler: a gas credit card that guarantees that you will pay no more than $2.99 for a gallon of gas for three years. The offer, good between now and June 2 on most Chrysler, Jeep and Dodge vehicles preys on our fear and anticipation of higher gas costs this coming summer.
But the numbers don’t work out all that well. First, in order to qualify for the $2.99 gas card, which is good for regular unleaded gasoline, diesel, or E85, you must relinquish your option to take advantage of any other purchasing incentive. Assuming the average gas price over the next three years is $3.99, and it could be lower once the political environment changes, one might save a couple hundred dollars a year. But how is this worthwhile if you have to give up a $2,000 (or more) cash back deal to qualify? A quick search of Chrysler incentives shows that dealers are offering up to $3,000 cash back. In other locations offering you can find incentives offering $5,000 cash back.
Additionally, according to the rules of this “Let’s Refuel America” incentive, your gas savings would be limited to 12,000 miles a year. After that limit, you would have to pay full price.
It makes no sense to give up a $5,000 discount in return for the *possibility* of saving a few hundred dollars a year. Keep in mind that three years from now, the price of gas may be much less than $2.99. You would have given up a significant incentive for very little benefit.
The perceived savings on the cost of gas is higher than the numbers reveal. Chrysler is simply seizing the opportunity to present a deal that looks nice to customers concerned about rising gas costs, but this deal is much better for the dealer than for the buyer.
If you’re concerned about gas savings and you’re in the market for a new car, opting for a vehicle with just a little more fuel efficiency compared to the Chrysler cars and trucks will be a better option for saving money on gas. Just a 3 mpg improvement will save $3,000 in the first three years, and then would continue saving money long beyond the expiration of the terms of this deal.
Photo credit: joebeone
Updated January 16, 2010 and originally published May 14, 2008.