Sunday, May 18, 2008

$2.99 Gas for 3 Years

How would you like to pay $3 per gallon for gas for the next three years? Steven Levitt's Freakonomics blog introduces this as new deal for Chrysler customers. Basically, this is just one of a handful of "financing" deals Chrysler customers could choose. So, if they want the deal on gas, they'll have to pass up the normal cash back or lower loan rates they might have otherwise taken.

I agree with Levitt that this appears to be a brilliant marketing ploy by Chrysler. I find it hard to believe that it'll cost Chrysler any more than its other incentives. (In fact, I'd bet it ends up costing them less per customer.) And the price of gas is constantly in the news, perhaps inflating its importance in drivers' eyes. So, maybe this promotion gets some incremental car buyers in Chrysler showrooms.

1 comment:

Dave said...

Yeah, it is a very clever idea and one that's getting them a lot of attention, but it's really not that great for consumers.

The plan is limited to 12,000 miles per year. If you assume that your car gets 20 mpg (to make the math easy), that's 600 gallons a year. If you save $1 per gallon, that's $600 per year for three years, or $1800 spread over three years. They offer that much or more in other incentives all the time.

It's not a great deal (far from it), but it is great marketing.