A newspaper ad caught my eye this morning. It was a full-page spread for Chrysler, guaranteeing for three years a gasoline price of $2.99 per gallon, if, of course, you purchase a new Chrysler car or truck. With the skyrocketing price of gas on everyone’s mind, this seems to be an attention-getting approach. Will it help sell some cars? Maybe yes, maybe no. The question that intrigued me, however, was how much this promotion is really worth. Let’s do the math.

The promotion is good for enough gasoline (or E85 ethanol, or diesel, as appropriate) to cover 12,000 miles per year, based on the US government’s average fuel economy numbers. So, a Dodge Journey or a Chrysler 300, which are rated at 20 mpg, would guarantee a $2.99 per gallon price for the first 600 gallons each year. Over three years, Chrysler would be on the hook for 1800 gallons. If the price of gas hits $3.99/gal, which seems rather likely, that’s $1,800 in the buyer’s pocket, over the three year period. Not too bad. But if you take this deal, then you don’t qualify for other rebates or promotions the dealer might be offering.

Well, rebates and promotions of $1,800 are not that common, are they? And what if gas approaches $5 per gallon, or more? At that point, I think you’re looking at a significant discount, one that Chrysler might regret.

I did read through the fine print on the promotion website, and there is no “out clause” if gas prices hit a certain point. There is also no requirement that you have to buy your gas at the dealer or any other special location, nor is your purchase limited to the new car you’ve bought. In fact, you can sell the car and keep using the gasoline promotion.

Overall, it seems like there’s a reasonably good deal behind a rather clever marketing approach. And that’s not something I expected to find when I started looking into it. I’m not car shopping at the moment, and this promotion isn’t going to change that fact. But I have a feeling that it will appeal to some, and I tip my hat to the marketing folks who came up with it.

An addendum … I’ve always been annoyed at the TV commercials with lots of fine print at the end that is too small to see and disappears faster than one could read it (huge letters: NO DOWN PAYMENT REQUIRED … tiny little fine print: sacrifice of first-born son mandatory). That should be against the law, I think.

This entry was posted on Friday, May 9th, 2008 at 3:27 pm and is filed under Al. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.