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Dodge's 2.99 gas program

Discussion in 'BBS Hangout: Debate & Discussion' started by rhadamanthus, Jun 18, 2008.

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rhadamanthus Member

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I find this to be absolutely irresponsible.

With gas prices rapidly approaching and exceeding $4 a gallon across the nation, Chrysler is offering up a deal that just might make people who are averse to the looks of cars like the Chrysler Sebring and Jeep Compass think twice. Between now and June 2, anyone who buys any new Chrysler, Dodge or Jeep vehicle will be able to register for a "Let's Refuel America" card. Once the customer registers a credit card with the program, they will receive a new card that they can then use at participating gas stations to fuel up their new car or truck. When the card is used, the credit card that the owner has on file will be billed $2.99 a gallon for either regular gas, E85 or diesel fuel. Chrysler will pay the difference. The best part is the price is locked in for THREE years.
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I'm sure most everyone has seen the goofy dodge commercials proclaiming "I can drive whatever dumb and unnecessary vehicle I want now for three years at 2.99/gallon gas. Why you ask? Because dodge is desperate and I'm a dumbass." (paraphrased )

I'm reminded of the whole mpg/emissions requirements levied in the late 80s and early 90s. The joke at the time was that while Japanese car makers got their engineers to start redesigning to meet the new spec, American auto manufactureres readied their lawyers to fight the legislation - dooming themselves to playing catch-up for the next 20 years+.

Seems again that these morons are fighting a losing battle, and poorly at that.

Tim Shriver wrote the following in an essay:

“So Dodge wants to sell you a car you don’t really want to buy, that is not fuel-efficient, will further damage our environment, and will further subsidize oil states, some of which are on the other side of the wars we’re currently fighting. ... The planet be damned, the troops be forgotten, the economy be ignored: buy a Dodge.”
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and Thomas Friedman made the astute analogy that this program was the "moral equivalent of Phillip Morris discounting cigarettes for pre-teen buyers".

I agree with this assessment. And it ties in nicely with the previous discussion on this board regarding tax plans under Obama or McCain and my assertion that the problem is not the progressive tax system, but people too stupid to realize how to manage their money frugally. I found the latest editorial from David Brooks quite interesting in this regard. He writes:

The people who created this country built a moral structure around money. The Puritan legacy inhibited luxury and self-indulgence. Benjamin Franklin spread a practical gospel that emphasized hard work, temperance and frugality. Millions of parents, preachers, newspaper editors and teachers expounded the message. The result was quite remarkable.

The United States has been an affluent nation since its founding. But the country was, by and large, not corrupted by wealth. For centuries, it remained industrious, ambitious and frugal.

Over the past 30 years, much of that has been shredded. The social norms and institutions that encouraged frugality and spending what you earn have been undermined. The institutions that encourage debt and living for the moment have been strengthened. The country's moral guardians are forever looking for decadence out of Hollywood and reality TV. But the most rampant decadence today is financial decadence, the trampling of decent norms about how to use and harness money.

Sixty-two scholars have signed on to a report by the Institute for American Values and other think tanks called, ''For a New Thrift: Confronting the Debt Culture,'' examining the results of all this.

This may be damning with faint praise, but it's one of the most important think-tank reports you'll read this year.
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Anyone have a different take?

#1 rhadamanthus, Jun 18, 2008

weslinder Member

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rhadamanthus said:

Anyone have a different take?
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That it's a marketing ploy that's not nearly as good a deal as some are convinced. My uncle came out of retirement to sell Dodges for a while, and he said that if you take the deal, you give up thousands of dollars in rebates. His claim is that you would have to drive an awful lot, or gas prices would have to really increase further to come out ahead by taking the deal. And even then, you're stuck driving a Dodge. (Kidding. Before gas prices headed north, I was looking at used Chargers.)

#2 weslinder, Jun 18, 2008
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I always thought it was fishy in a sense that does Chrysler know something we don't? Is gas going to be above $2.99/gallon forever now? What happens when it drops below $2.99, if it ever does again?

I never thought about it the way it is portrayed in the original post but those are some good points.

#3 Lil Pun, Jun 18, 2008
bobrek Politics belong in the D & D

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It sounds like much ado about nothing. If I understand the program, I think it only covers the first 12,000 miles of driving in each of the 3 years. Assume 20 miles to the gallon. At current gas prices, you save about $600/year. Regardless, so what? I doubt this will prevent Chrysler from designing more fuel efficient cars..

Why is it so awful for Chrysler to offer this program? Folks are going to buy cars. Anyone that does their homework should realize this isn't that great of a deal. People have differing opinions about the quality of cars. I'd rather have a $2000 rebate.

#4 bobrek, Jun 18, 2008
rhadamanthus Member

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weslinder said:

That it's a marketing ploy that's not nearly as good a deal as some are convinced. My uncle came out of retirement to sell Dodges for a while, and he said that if you take the deal, you give up thousands of dollars in rebates. His claim is that you would have to drive an awful lot, or gas prices would have to really increase further to come out ahead by taking the deal. And even then, you're stuck driving a Dodge. (Kidding. Before gas prices headed north, I was looking at used Chargers.)
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Well of course that's the case. My point was more in regard to the ideology that would make such an incredibly stupid purchase seem viable.

#5 rhadamanthus, Jun 18, 2008
Lil Pun Member

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BTW, I read a news article the other day that the deal hasn't been utilized by many buyers as Chrysler is hurting more than the other automobile companies.

#6 Lil Pun, Jun 18, 2008
rhadamanthus Member

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bobrek said:

Why is it so awful for Chrysler to offer this program?
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Because it's only further feeding the root cause of the whole problem - people buying wasteful and unnecesary items.

It's become a common refrain that gas prices are hurting the "working" american. (I hate that term). I'd argue it's not gas prices, but a general lack of knowledge regarding how to manage one's money. What chrysler is doing is milking this idiocy, while simultaneously prolonging and worsening the inevitable crash. If I was a shareholder I'd be furious that the focus was not on getting out of the "stupidly-huge-vehicle" market. Instead, Chrysler has opted to milk what Dilbert creator Scott Adams calls the "stupid poor". Scott correctly predicts that marketing to this group will lead to your downfall - they cannot sustain a business model indefinitely, even with the American preference for over-indulgence-on-credit.

#7 rhadamanthus, Jun 18, 2008

bobrek Politics belong in the D & D

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rhadamanthus said:

Because it's only further feeding the root cause of the whole problem - people buying wasteful and unnecesary items.

It's become a common refrain that gas prices are hurting the "working" american. (I hate that term). I'd argue it's not gas prices, but a general lack of knowledge regarding how to manage one's money. What chrysler is doing is milking this idiocy, while simultaneously prolonging and worsening the inevitable crash. If I was a shareholder I'd be furious that the focus was not on getting out of the "stupidly-huge-vehicle" market. Instead, Chrysler has opted to milk what Dilbert creator Scott Adams calls the "stupid poor". Scott correctly predicts that marketing to this group will lead to your downfall - they cannot sustain a business model indefinitely, even with the American preference for over-indulgence-on-credit.
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So if Ford (or GM, or Toyota, or whoever) offers a $2500 rebate, is that a bad thing as well? A rebate by any other name is still a rebate. I highly doubt too many folks are sitting around thinking that if they go out and spend $15000 dollars they can save a buck a gallon. If folks are looking for a new car, it's simply a marketing stunt.

#8 bobrek, Jun 18, 2008
rhadamanthus Member

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bobrek said:

So if Ford (or GM, or Toyota, or whoever) offers a $2500 rebate, is that a bad thing as well? A rebate by any other name is still a rebate. I highly doubt too many folks are sitting around thinking that if they go out and spend $15000 dollars they can save a buck a gallon. If folks are looking for a new car, it's simply a marketing stunt.
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The difference between your rebate argument and Chrysler's 2.99/gallon program is that a rebate can apply to any situation whereas this gas deal is designed solely for an antiquated business model centered around stupidly huge vehicles. It's not like Honda needs to advocate a 2.99/gallon deal for their hybrids...

Yes, it's a marketing stunt (and a stupid one - see weslinder's post). But it's a stunt that champions exactly what Tim Shriver laments in my original post. Stubborn stupidity is not a virtue.

#9 rhadamanthus, Jun 18, 2008
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bobrek said:

So if Ford (or GM, or Toyota, or whoever) offers a $2500 rebate, is that a bad thing as well? A rebate by any other name is still a rebate. I highly doubt too many folks are sitting around thinking that if they go out and spend $15000 dollars they can save a buck a gallon. If folks are looking for a new car, it's simply a marketing stunt.
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This one is a little worse because it provides an incentive not only to purchase a less efficient car than you might otherwise, but also to use more fuel once you have the car.

#10 bucket, Jun 18, 2008
bobrek Politics belong in the D & D

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To each his own. I just think you guys are reading way too much into this. Since the gas savings is capped at 12,000 miles you are almost "encouraged" to drive less.

Also, you can opt for a rebate in lieu of the gas savings which will probably be a better deal.

Ford is currently offering a $4000 rebate on an Explorer. Is that a bad thing?

#11 bobrek, Jun 18, 2008
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its no different from hedging.

#12 pgabriel, Jun 18, 2008
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I understand the sentiment, but these auto manufacturers have to get rid of the vehicles currently on the lot. this doesn't prevent them from changing strategy going forward

#13 pgabriel, Jun 18, 2008

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I am not sure if there are still any left. But there use to be gas banks, where you buy gas at today's price and in the future you get to refill for free for the amount you purchased. If anyone still have 1.99 gas left man!

#14 pirc1, Jun 18, 2008
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Sounds fine to me as a short-term strategy if they are also changing their long-term strategy for future years. I can see it being an effective marketing tool and they need short-term cash to live to see another day. I'd be more interested to hear what they will do long-term to react to the change in buyer habits resulting from high fuel prices. If this is it, they're doomed anyway.

#15 JuanValdez, Jun 18, 2008
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bobrek said:

To each his own. I just think you guys are reading way too much into this. Since the gas savings is capped at 12,000 miles you are almost "encouraged" to drive less.

Also, you can opt for a rebate in lieu of the gas savings which will probably be a better deal.

Ford is currently offering a $4000 rebate on an Explorer. Is that a bad thing?
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The card provides an incentive to drive more up until 12,000 miles, at which point it stops having an effect. There's no way it encourages you to drive less.

That's why this is worse for the environment than the rebate on an Explorer (which is itself bad for the environment).

I think it would be funny for the gov't to levy a $1/gallon tax on gas purchased with such a card.

#16 bucket, Jun 18, 2008
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Lil Pun said:

Is gas going to be above $2.99/gallon forever now? .
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Yes. Welcome to Europe. (And, for the time being, Milk.)

#17 cson, Jun 18, 2008
bobrek Politics belong in the D & D

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bucket said:

The card provides an incentive to drive more up until 12,000 miles, at which point it stops having an effect. There's no way it encourages you to drive less.

That's why this is worse for the environment than the rebate on an Explorer (which is itself bad for the environment).

I think it would be funny for the gov't to levy a $1/gallon tax on gas purchased with such a card.
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Does this mean that you think car companies should encourage people to NOT buy their product?

I seriously doubt that this has any impact on manufacturers' developing more fuel efficient cars.

Incidentally, I think the average household drives more than 12,000 miles annually.

#18 bobrek, Jun 18, 2008

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FREE gas couldn't entice me to buy another Dodge.

#19 Hippieloser, Jun 18, 2008
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Can you get that with the new Challenger because I really want one of those.

#20 Oski2005, Jun 18, 2008

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