Chrysler offers cheaper gas as incentive

Amy Scott May 6, 2008

Chrysler offers cheaper gas as incentive

Amy Scott May 6, 2008


BOB MOON: Don’t bother stopping me if you’ve heard this one before: Oil prices hit yet a new record today.

A barrel of crude topped $122 on the New York Mercantile Exchange. And Goldman Sachs is warning prices could hit $200 a barrel in the next few years.

So you’ve gotta wonder what automaker Chrysler is thinking. The company announced a new incentive this week. Through early June, customers who buy or lease a new Chrysler can lock in lower gas prices. Get this — for three years.

Marketplace’s Amy Scott explains.

AMY SCOTT: Remember when paying $3 a gallon seemed crazy? Now it’s a marketing pitch.

The deal works like this: Anyone who buys a new Chrysler car or truck — except for a few models — will get a gas card. Swipe that card at a participating gas station and you pay $2.99 a gallon. Chrysler pays the rest.

With gas prices expected to reach $4 a gallon this summer, it may seem like a risky bet. But Chrysler says it’s hedged against higher prices. And after a certain number of gallons, depending on the model, you’re cut off.

Industry consultant Joe Philippi says the promotion is likely to cost less than the usual cash-back incentives.

JOE PHILIPPI: I think this is their idea of how to sort of break through the clutter to get the customer’s attention.

Higher gas prices have been weighing on consumers’ minds and automakers’ sales. Chrysler’s truck sales fell 25 percent last month.

Erich Merkle tracks the industry for research firm I.R.N. He says Chrysler’s gas gimmick may get customers back in some of those larger vehicles — for now.

ERICH MERKLE: Right now, Chrysler’s gotta play the cards they have. But long term, there’s no question that Chrysler’s far too heavily wedded on trucks.

Chrysler is teaming up with Nissan to offer smaller cars in a few years. It’s not the first automaker to lure customers with cheap gas. Suzuki is offering free fuel this summer. GM tried its own promotion a few years ago with limited success.

In New York, I’m Amy Scott for Marketplace.

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