Clark Howard's Tips

Dissecting Chrysler's gas gimmick

May 15, 2008

Suzuki and Chrysler are both offering fixed-price gas opportunities to drum up sales on select new models. With Chrysler, you get gas at a fixed price of $2.99/gallon for up to 12K miles for 3 years. Suzuki, meanwhile, is offering free gas for a number of months. There's been no match so far from either Ford or GM (Editor's note: Info accurate as of 05/15/08).

The Wall Street Journal ran some "what if" numbers on a variety of Chrysler models to see if their gimmick holds water. It turns out that gas would have to go up to about $4.10/gallon for their offer to pay off. No numbers were crunched for the Suzuki promotion.

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So you've got to decide whether you are an optimist, a realist or a pessimist. The realists will say that gas may go up to climb beyond $4/gallon, as it already has in parts of California. The pessimists, meanwhile, will say that gas could go as high as $200/barrel! Clark, however, is an optimist. He believes the price of gas will get lower. Our demand is already declining in the face of higher prices. Yet there is increased demand from developing economies around the world. So Clark is really in the minority when it comes to his viewpoint.

If it were Clark, he would take a cash rebate instead of the gas option from Chrysler. But you have to decide where you standÉ

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