Chrysler Gas Card

May 6th, 2008 | , Ads, Consumer Protection, Credit and Debt, Let's Refuel America, Review, chrysler, economic stimulus package, fuel prices, gas price, rising gas prices, saving

Chrysler recently announced the Let’s Refuel America program which locks in gas prices at $2.99 per gallon. Here’s a clip from the press release followed by an analysis of whether the deal is worth it.

From the press release: “In response to direct customer feedback citing the prospect of rising gas prices as a top concern, Chrysler LLC today announces its own economic stimulus package: an exclusive gas price protection policy that eliminates the risk of further spikes in fuel prices. With the U.S. purchase of eligible Chrysler, Jeep and Dodge vehicles, customers can enroll in the “Let’s Refuel America” program and receive a gas card that immediately lowers their gas price to $2.99 a gallon, and keeps it there for three years. The offer is available at 3,511 U.S. Chrysler, Jeep and Dodge dealerships through June 2, 2008, and is available on vehicles ranging from popular new compacts, crossovers and minivans to full-size diesel-powered pickup trucks.”

The analysis:

The first thing I noticed is that the Let’s Refuel America program must be selected in lieu of other incentives. Determining if the deal is worth it to you means that you’ll have to compare the value of the program to the other deals you have to give up to get it. Second, a yearly allotment of gallons is part of the program, but that amount was not disclosed. If you can only buy 100 gallons at the low price per year, clearly the deal isn’t worth very much. Third, the program charges the gas to your credit card after the transaction is made. If you would normally pay for gas with cash or don’t pay off your credit card in full each month, the interest on the gas purchases (even at $2.99 a gallon) can quickly make the price more expensive for you. Lastly, though I don’t expect gas prices to come down over the next three years, if prices fall, the value of the program decreases. If they had made the price equal to 25% below the average price in the US, or something along those lines, that would have offered protection against potentially lower prices in the future.

The Chrysler gas card is an ingenious program because it capitalizes on an issue that is currently on everyone’s mind: high gas prices. Whether or not it will actually save you money is highly dependent on the other incentives you give up, the yet undisclosed specifics on the gallon limits of the program, the potential other costs of using your credit card to pay for the gas, and the volatility of future gas prices. Going out and spending money on a new car, in order to “save” on gas, will probably end up leaving you worse off than if you bought a used car, or no car at all. It’s possible that this program will save you money, but much more likely that Chrysler will be the ones who profit the most.