It's been tried before--with little success. But high fuel prices continue to soar. So Chrysler is offering to subsidize gasoline when you purchase a vehicle.
The Let's Refuel America incentive puts a debit card in your hand when you purchase a select Chrysler, guaranteeing that you will pay no more than $2.99 a gallon for three years and up to 12,000 miles per year. Speculative frenzies in the oil market have begun to raise fears around the world that gas could reach $7 at the U.S. pump this year (it has already grabbed that ring in Europe and Japan).
So Chrysler's strategy just might work this time. The company's sales are down 18% this year. Dealerships have been reporting a direct link between rising gas prices and the amount of free time their salespeople have on hand because of empty showrooms.
The program is already under fire. Read after the jump.
The Union of Concerned Scientists has blasted the incentive:
"At the current price of $3.61 a gallon, the buyer of an average
Chrysler vehicle would save $400 a year under Chrysler's deal. But a mere 3-mpg boost would yield the same savings over the 15,000 miles per year typically driven in the first three years of ownership. Over the lifetime of a vehicle, such a fuel economy increase would save drivers more than $3,000. It wouldn't stop saving drivers money after just three years."
To be sure, it's a sign that Chrysler is offering yesterday's gas prices for yesterday's vehicles. But it takes several years to revamp a company's model lineup. Meanwhile, Chrysler has a lot of gas guzzlers it needs to move in an increasingly sour market.
The incentive also plays in with the political pandering around rising prices at the pump. Everyone, it seems, wants to reduce the pain of high prices. States are now feeling pressure to reduce the levy they charge for gasoline, regardless of what happens with the federal fees.
So far, Americans smell the flimflam in these incentives. With very few exceptions, it's nearly impossible to find an economist who thinks they would benefit anyone.
Those considering a Chrysler should get out their calculators before they bite. Some of the up-front cash incentives dealers now offer will add up to more than they'll save on gasoline over three years.
