Chrysler Gas Discount-Deal or No Deal?

May 07 2008

Published by NO at 6:14 pm under Cars, Finance

After successfully reaching its job-cutting goal of 11,000 jobs, Chrysler chairman Bob Nardelli announced a very enticing incentive to lease a Chrysler. Until May 31, Chrysler will be offering $2.99 gas for three years at 12,000 miles per year. No matter what the price of gas, a card from Chrysler will pay the difference, only costing you $2.99 per gallon.

On the surface this looks like an extremely enticing deal, especially with the price of gas breaking new records nearly every day recently. Some say the average price of gas could reach $4.00 per gallon during the summer of 2008, however, with some rough math the savings aren’t as great as expected.

I made some very rough estimates, saying that the average Chrysler vehicle hold 18 gallons of gas and averages 20 miles per gallon. Then I estimated that the average price of gas over the next three years would be around $4.20 (luckily in Texas we don’t see near the average). That equals 360 miles per tank of gas, meaning you would fill up 33 times per year at the 12,000 mile limit, equaling 100 total fill-ups during the 3-year leasing period. That’s assuming 18 gallons per fill-up, not totally accurate but it works out, equaling to 1800 gallons of gas used under the Chrysler deal. In the end, at an average difference of $1.21 nationwide, that equals to a total savings of $2,178 on gas.

The point here is that it is better to take Chrysler’s cash back deals, which averages $2,090 per vehicle. Most people will immediately use the cash back incentive to immediately put some money down on the vehicle, which will in the end save you even more money on the APR. The deals are pretty close, but in the end it seems that the gas discount is not as good as it sounds. Props to Chrysler though for really appealing to a major crisis that really gets their name out, especially with the negative appeal of their job cuts.