Tuesday, May 6, 2008

CHRYSLER'S GAS CARD COSTS AND SAVINGS

Assuming the offer for new Chrysler, Dodge, and Jeep customers to purchase 700 gallons of gasoline at $2.99/gallon is taken up by a similar number of Chrysler product purchasers as were present in dealerships in April, what'll this cost Chrysler LLC? You've got 148,000 vehicles and can multiply that by 700 gallons of fuel on which there will be savings.

This is where it gets wishy-washy. Fuzzy math, perhaps. There's 103,600,000 gallons of fuel that'll be purchased with the use of a credit card (available to buy only the type of fuel their vehicle demands) at $2.99/gallon. Of course, different parts of America will appreciate this deal more than others. 

Chrysler buyers in Dallas would save - presently - a little over 40 cents. Chicago drivers could add at least another 20 cents, while L.A. and NYC drivers would be saving over 70 cents per gallon. $3.65 is a fair average for regular gasoline, so with a 66 cent cut customers will save 103,600,000 times, Chrysler LLC will be incentivizing to the tune of $68,376,000 for just 148,000 new cars, under $500 per vehicle.

Granted, some vehicles aren't included in the deal. Dodge Sprinters and Vipers, Chrysler Crossfires, and all SRT models aren't open to this deal. True, some buyers won't consume 700 gallons of fuel. Indeed, gas prices could drop. 

But it seems clear with dealers chopping $13,000 off the price of '08 $32,000 Dodge Rams, Chrysler needed to do something more to drive potential customers into dealerships. And hitting customers where it's currently hurting - at the pumps - is the most tempting method of incentivizing. 

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