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Is $2.99 Gas Really a Good Deal?
Tagged Under : chryler, chrysler dodge, consumer guide auto, fuel discount, gas prices, incentive program, jeep, Refuel, save
I’ve been seeing a lot of commercials lately for Chrysler’s new “Refuel America” incentive program. In case you haven’t, the deal is that if you purchase a qualifying Chrysler, Dodge or Jeep you will be able to purchase gas for the next 3 years at a price of $2.99 per gallon. Seems too good to be true, doesn’t it?
I started doing a little research and have come to the conclusion that while this may not be a bad deal, it definitely isn’t the amazing deal that you think it is. Let’s look at the fine print a little closer:
The fine print can be found on the Chrysler “Refuel America” Website:
- After purchasing a qualifying Chrysler, Dodge or Jeep you will receive a special gas card that is linked to the Visa or Mastercard of your choice. If you fill up using this card you are billed at the $2.99 rate instead of the normal price.
- You will receive the discount for the first 12,000 miles you drive per year. The maximum discount is based the average fuel economy of the car purchased. For example the owner of a Chrysler 300, which gets an average fuel economy of 20 mpg may purchase a total of 1,800 gallons during the 3 year period. (12,000 miles per year times 3 years divided by 20 mpg = 1,800 gallons).
- Your allotted fuel discount is divided into three annual periods and does not roll over into the next year. So, in the case of the Chrysler 300 if you don’t use your full 600 gallons (1,800 divided by 3 years), you lose it.
- The $2.99 purchase price is based on 87 octane fuel or diesel fuel (if your car uses diesel). Higher octane fuels will cost an additional $.15 or $.30 per gallon.
Doesn’t sound too bad does it? However, what some people are unaware of is that this program replaces the normal incentives offered by Chrysler, Jeep and Dodge. I was really interested to see how this program stacks up against the normal incentives you would get this time of year.
First I needed to find out what to compare the program to. The Consumer Guide Auto Section of How Stuff Works shows all current dealer and customer incentives being offered by automakers. However, this only shows current incentives, and I wanted to know what the incentives were last year. Using the Wayback machine at Archive.org, I was able to look at the same dealer incentive information for this time last year.
Now that I have some numbers, let’s run a comparison. For this example I am going to use a Chrysler Town and Country.
- The 2007 incentive for a Town and Country was $3,000-$4,000 Cash Back. For this example I will use $4,000.
- The 2008 Town and Country gets a 3 year allotted purchase of 2,400 gallons at $2.99 which equals about 53 gallons per month.
- In order to save $4,000 using the fuel program, you must use your full 2,400 gallons and gas prices need to average at least $5.10 per gallon.
Gas prices aren’t quite $5.10 yet, but it isn’t unreasonable to say that they will go there. It is pretty safe to say that the benefit you will receive from this gas program over the next three years will be roughly equivalent to the cash back you would have received a year ago.
I’m not trying to dissuade anyone from buying a Chrysler, Jeep or Dodge. All I am saying is that before you are quick to jump on a deal that looks amazing, you should look into it a little and be aware that companies have great marketing departments whose job it is to make you believe that you are getting an amazing deal.
If you are going to buy a car, do the research and make an informed decision. Don’t fall for a marketing gimmick.
Stumble it!
Another thing you forgot to mention…
Gas is at $4.00 per gallon because of the “Enron Loophole” which was pushed by John McCain’s campaign manager, Phil Graham, and by McCain himself. If that loophole is closed, which it will be if Obama is elected with a Democratic majority, gas prices will likely plummet to somewhere in the range of $2 per gallon within about 30 days. In other words, your Chrysler incentive will vanish almost overnight.
Chrysler is aware of this. Anyone would be crazy to buy a Chrysler when there are FAR better deals to be had.
This is a fantastic post. It asks a question and provides information, all without imposing an agenda. Very impressive.
Also, firsties.
i agree.. also, you can just save way more money buying a used car or even just a one year old car. the “refuel america” program really isn’t that great.
mikes last blog post..The Shadow
I drive a 79 Plymouth duster with a 318 V8 engine. It may be the most reliable car I have ever owned. I try to keep it running efficiently and it doesn’t let me down. The economy It delivers is found in its design. So I dont worry about fuel mileage with a car that with well over 100,000 miles on the odometer runs as well as any car on the road. The best part is: IT’S PAID FOR. Doug Rosbury
Great analysis. I’m not in the market for a new car (as I have a ‘07 Toyota Yaris), but I really have been wondering about what the catch was with this article.
All the better reason to take the bus or ride a bicycle – that’ll actually save you a lot more! Why put so much money in a ‘go-kart for grown ups’ with a CD-changer? Ahh, that’s right, gotta have that fancy car, right!? Consume, consume, consume… the only thing society is good at.
That’s the straight forward truth if there was any.
How about gas goes back to less than $3 a gallon, wouldn’t that work?
yea this is definitely not that great of a deal for the consumer. but for the business its a great marketing campaign by tapping into people’s emotions. and for them there are enough suckers that will think great cheaper gas and go buy a new car
Thanks for the analysis…I have a Jeep with a lease ending in the October/November time frame, and have been getting lots of pressure to end it early for the $2.99 gas deal. Since I don’t have many miles on my Jeep and it’s basically “good as new,” I asked if I could extend my lease at a lower rate with no miles or buy the car. The dealer told me “no one wants SUVs, your Jeep isn’t worth anything, you’d better turn it in and get a new one.” Odd how my old Jeep “isn’t worth anything because no one wants one” but I should want a new one??!!
Have a great weekend as you get to it!
Roxy
I still think that buyers are paying $4.00 a gallon through the price of the car.
Catherines last blog post..Chant, Chant, Chant
I’m not in the market for a new car (have an ‘08 Altima), so I wasn’t going to get caught up in this deal, but every time I saw the commercials I thought “I wonder what the catch is?”. Now I know. Good post.
Before I bought my ‘08 Altima, I did a ton of research on any and all cars. Dodges and Chryslers consistently had the worst fuel economy, I guess this is there way of trying to ease the pain of those MPG numbers.
I’m a Jeep guy, and was worried that Chrysler would lose it’s shirt on this (at first blush it seems like it would cost them a fortune). It’s interesting to hear that it cost the same as their normal promotions.
[...] Read the full post at Earn on the Side. I’ve been seeing a lot of commercials lately for Chrysler’s new “Refuel America” incentive program. In case you haven’t, the deal is that if you purchase a qualifying Chrysler, Dodge or Jeep you will be able to purchase gas for the next 3 years at a price of $2.99 per gallon. Seems too good to be true, doesn’t it? [...]