Chrysler $2.99 gas deal—Calculating the owner costs
With the much-publicized Chrysler $2.99 Gas Guarantee program being extended, we took another look at this program to help car shoppers understand its value. To see the complete financial picture, we compared eligible, Consumer Reports-recommended Chrysler models against competitors using our new-car owner cost data. We found that in these cases, it cost less to accept the full rebate as an incentive than the gas card, even when combined with a partial rebate. But even still, the Chrysler models typically cost more to own than their peers in the long run.
How we analyzed the Chrysler $2.99 Gas Guarantee
Consumer Reports Auto Price Services analyzed the data on how much the vehicles will cost to own for three and five years based on the fuel savings and cash-back rebate available for Chrysler vehicles compared to similar models from other manufacturers. We looked at the data for the only four eligible vehicles recommended by Consumer Reports: the Chrysler PT Cruiser, Chrysler 300C, Dodge Charger SXT V6, and Charger R/T V8.
Naturally during the three years of the $2.99 deal, annual fuel costs shown are usually less than the other vehicles listed. However, if you look at the fuel cost combined with the overall owner costs for the first three years and then for five years, you see that there isn’t much savings after all. In fact, three models—the 300C, PT Cruiser, and Charger R/T—cost more to own in five years than all the other models compared, even when factoring the Chrysler gas card and cash incentives.
| Large sedan Make & model |
2008 MSRP | CR's MPG | Cash back incentive |
Fuel costs years 1-3 |
Adjusted owner costs years 1-3 |
Fuel costs years 1-5 |
Adjusted owner costs years 1-5 |
| Dodge Charger SXT V6 | $24,655 | 19 | $1,500 | $5,612 | $28,362 | $10,612 | $47,862 |
| Dodge Charger R/T V8 | $28,725 | 17 | $2,500 | $6,451 | $32,451 | $12,098 | $55,348 |
| Chrysler 300 C Hemi V8 | $33,415 | 16 | $2,500 | $6,758 | $32,008 | $12,758 | $56,258 |
| Toyota Avalon XLS | $32,285 | 22 | N/A | $6,500 | $30,500 | $11,000 | $44,000 |
| Hyundai Azera 3.8 Limited Auto | $26,745 | 19 | $2,000 | $7,500 | $29,250 | $12,750 | $43,250 |
| Ford Taurus Limited FWD | $26,420 | 18 | $2,000 | $8,000 | $27,250 | $13,250 | $40,500 |
| Mercury Sable Premier FWD | $26,525 | 18 | $2,000 | $8,000 | $26,750 | $13,250 | $40,000 |
| Buick Lucerne CXS V8 | $35,945 | 17 | $1,000 | $8,500 | $36,250 | $14,000 | $52,000 |
Wagons & hatchbacks Make & model |
2008 MSRP | CR's MPG | Cash back incentive | Fuel costs years 1-3 |
Adjusted owner costs years 1-3 |
Fuel costs years 1-5 |
Adjusted owner costs years 1-5 |
| Chrysler PT Cruiser Limited Edition | $22,100 | 20 | $2,000 | $5,212 | $22,712 | $10,012 | $40,012 |
| Audi A3 2.0 6MT | $26,705 | 25 | N/A | $6,000 | $27,250 | $10,000 | $40,250 |
| Mazda3 2.3S Auto Grand Touring | $21,895 | 25 | N/A | $5,750 | $23,250 | $9,500 | $34,250 |
| Volkswagen Rabbit 2.5L 6AT S | $17,325 | 24 | N/A | $6,000 | $21,500 | $10,000 | $32,500 |
| Chevrolet HHR LT | $17,150 | 23 | $1,500 | $6,250 | $22,000 | $10,500 | $33,000 |
| Mazda5 2.3 Auto Grand Touring | $23,000 | 23 | N/A | $6,250 | $25,250 | $10,500 | $37,250 |
| Scion xB AT | $17,220 | 23 | N/A | $6,250 | $21,000 | $10,500 | $31,750 |
| Subaru Impreza 2.5 Auto Outback Sport | $21,640 | 23 | N/A | $6,250 | $23,500 | $10,500 | $34,750 |
| Subaru Outback 2.5i Auto | $23,640 | 21 | $1,500 | $6,750 | $26,250 | $11,500 | $39,000 |
The data in the charts is based on the fixed $2.99 gas price for three years and driving 12,000 miles annually. During that period, we compared the 2008 EPA overall mpg estimates and CR’s overall gas mileage, applying the costs covered by the program. Where the Chrysler program did not seem to cover the projected annual fuel costs based on our testing, we added the additional, estimated fuel costs to provide a real-world picture. The remaining two years and all competing models strictly reflect fuel consumption based on our test findings and $4.00 a gallon for gas.
Our cost of ownership data factors in depreciation, fuel costs, interest on financing, insurance costs, maintenance and repair and sales tax. (Full, comparable owner cost information is available for new cars in the model pages, along with pricing data, to ConsumerReports.org subscribers.)
Besides the "gas card plus rebate" option, buyers can choose a cash-back incentive or 0 percent financing instead. According to Chrysler, the cash back has been more popular with buyers as it affects financing and lowers monthly payments. We ran the numbers to see the savings if consumers choose only the cash-back incentive and not the gas card deal, plus lesser cash incentive. As you can see in the chart below, the adjusted owner cost numbers for the first three years are within the price range of the other models listed. The savings for Chrysler car buyers is greater choosing the rebates, rather than the gas card option. However, buying an incentivized Chrysler is not necessarily cheaper than competing models in the long run. Plus, these four Chrysler models all perform in the lower half of the CR Ratings chart for their car type. For competing models, we factored rebates when available nationally. Of course, all brands offer periodic, regional deals, especially as the end of the model year approaches.
| Large sedan Make & model |
2008 MSRP | Cash back incentive | Adjusted owner costs years 1-3 | Adjusted owner costs years 1-5 |
| Dodge Charger SXT V6 | $24,655 | $3,000 | $28,000 | $42,500 |
| Dodge Charger R/T V8 | $28,725 | $4,500 | $31,500 | $48,000 |
| Chrysler 300 C Hemi V8 | $33,415 | $5,500 | $30,750 | $47,250 |
| Toyota Avalon XLS | $32,285 | N/A | $30,500 | $44,000 |
| Hyundai Azera 3.8 Limited Auto | $26,745 | $2,000 | $29,250 | $43,250 |
| Ford Taurus Limited FWD | $26,420 | $2,000 | $27,250 | $40,500 |
| Mercury Sable Premier FWD | $26,525 | $2,000 | $26,750 | $40,000 |
| Buick Lucerne CXS V8 | $35,945 | $1,000 | $36,250 | $52,000 |
Wagons & hatchbacks Make & model |
2008 MSRP | Cash back incentive | Adjusted owner costs years 1-3 | Adjusted owner costs years 1-5 |
| Chrysler PT Cruiser Limited Edition | $22,100 | $3,000 | $23,000 | $35,500 |
| Audi A3 2.0 6MT | $26,705 | N/A | $27,250 | $40,250 |
| Mazda3 2.3S Auto Grand Touring | $21,895 | N/A | $23,250 | $34,500 |
| Volkswagen Rabbit 2.5L 6AT S | $17,325 | N/A | $21,500 | $32,500 |
| Chevrolet HHR LT | $17,150 | $1,500 | $22,000 | $33,000 |
| Mazda5 2.3 Auto Grand Touring | $23,000 | N/A | $25,250 | $37,250 |
| Scion xB AT | $17,220 | N/A | $21,000 | $31,750 |
| Subaru Impreza 2.5 Auto Outback Sport | $21,640 | N/A | $23,500 | $34,750 |
| Subaru Outback 2.5i Auto | $23,640 | $1,500 | $26,250 | $39,000 |
Currently, just under 10 percent of buyers are choosing the gas card program, according to Chrysler. They have seen some sales improvements from April to May, but still lag behind the industry due to a product lineup that includes a number of large, gas-guzzling vehicles. The gas promotion is in effect until July 7th. Since this analysis was performed, Chrysler reportedly announced a 2 percent price increase. This plan is definitely a moving target, and in this case it is becoming less favorable.
Bottom line
With the gas prices reaching new heights, manufacturers are looking to lure buyers into their dealerships by offering attractive promotions and incentives. While the deal may look enticing at first glance, it is important to look at the full picture, because it may not be a good deal after all. With the Chrysler deals, accepting the rebates can lower the owner costs and add appeal if you are drawn to these models. However, we would recommend you consider all vehicles in the segments, as there simply are better choices available based on our testing and analysis.
In choosing your next ride, look for a model that performed well in Consumer Reports tests, has average or better predicted reliability, a good overall safety Rating, fuel economy at the top of its class in our testing, and average or better estimated owner costs. All this information is readily available at ConsumerReports.org. The New Car Selector tool can help you quickly narrow a list of contenders down to the few that most closely match your needs and budget.
—Liza Barth and Mike Dempsey
Posted by: John | Jun 22, 2008 12:14:01 PM
This analysis is only semi-helpful, because it assumes $4.00/gal gas. Here in California it's been above $4.50 for weeks. And nationally, experts keep saying there's no peak in site. So over the next 3 years, locking in $2.99/gal could turn out to be MUCH more valuable than taking a fixed $$ discount (via rebate) OR low interest rate.
Also, while it's important to note that Chrysler cars aren't evaluated highly by CR, there are many, many Chrysler-made cards on the road, suggesting many buyers choose a car they like rather than the "best" basic transportion. There are reasons besides pure lifetime-of-ownership economy, including personal taste/style, living-with-the-car amenities (Chrysler Town & Country 2008 is far more innovative than Honda), and unique capabilities (some Jeeps).
After becoming "hooked" on a model, buyers THEN try to get the best deal. Unfortunately, that's omitted from the analysis. The need for many prospective buyers is a look at the financial options across ALL eligible Chrysler/Dodge/Jeep models, separate from comparing a few Chryslers to Toyota, etc.
Posted by: AL | Jun 25, 2008 10:14:11 AM
I agree with the above comment, we don't know how high gas prices will go and having a gas card that locks in $2.99 a gallon price for 3 years my turn out to be a great deal. Chrysler is not doing well and they are willing to discount their vehicles (especially Jeeps and trucks) much higher than competitive models such as Honda or Toyota. My salesperson was willing to sell me a brand new Jeep Grand Cherokee for $21K (sticker price is $28K).
Posted by: Andy | Jun 25, 2008 11:01:56 AM
I agree with the comments above. The deal gives security. Gasoline is such a variable now in cost of running a vehicle, it will allow a constant that can be counted on. There is no relief in sight right now for gasoline prices and $4 a gallon is a VERY conservative outlook for the next 3 years. At the rate now, it could be $5 gal before the end of the year.
I see that CR doesn't like Chrysler products, I own one and really like it. Even adding up some of the numbers above, there seems to be a little behind the scenes voodoo taking place. This is one reason why I don't completely like or trust CR, they say they are not biased, but they really seem to be in some cases. I have seen it with other products too.
The analysis doesn't show the deal for leasing a car for 3 years.
Posted by: Ed Burke | Jun 25, 2008 1:46:50 PM
Chrysler is running a gas price incentive during their current " Dinosaur-A-Thon " sales promo to move the big gas guzzling Dinosaurs off their inventory storage lots. The BUSH era gas gouging has rendered these models as obsolete as the Dinosaurs. Did anyone actually need to have this explained to them ?
Posted by: PMC | Jun 25, 2008 4:25:21 PM
This re-work of the "$2.99 Gas Deal" blog is more like it.
The first one, as we already are well aware, was little more than a huge advertisement for both Toyota and Honda products (the fact that CR included the Honda Pilot -- a gas-guzzler by any metric and one of the least economical in its class -- as an alternative to the Dodge Durango proves the advertisment nature of the last CR blog on this matter). With this new blog, CR kind of redeems themselves, but misses the mark in including a V8 Lucerne (like the Honda Pilot, the V8 Lucerne is among the least fuel-efficient in its class).
Also, CR deleted altogether any alternatives to the Dodge Durango. It would have been nice if CR continued along the same theme, suggesting the GMC Acadia as a suggestion: it's far higher in quality, far better designed and gets relatively better fuel mileage (and certainly better fuel mileage than any Toyota Sequoia).
We at www.gminsidenews.com applaud Consumer Reports on making this needed correction!
--PMC the First
Posted by: Big Boy | Jun 25, 2008 5:13:36 PM
Ok guys, I worked for a very high-volume Jeep/Chrysler dealer for 4 years...I can tell you, aside from a couple of products...the unique Wrangler 2 and especially 4 door, new Town and Country, and Sebring(which no one wants), this brand is virtually DEAD! Yes, the gas card was a good idea to create interest, but if you put a pencil to it even $1.99 gas guaranteed over the next 3 years isn't a great bargain when you give up most of the rebates if not all to get it. Now, if gas goes up to say $5 a gallon and beyond, then yes, people would do well to entertain this concept...just remember though that your maximum gallons per year are based on 12,000 mi.-a-yr driving. A PT Cruiser has a limit of 545 gallons per year, and a Jeep Commander has an 800 gallons-per-yr max. Also, you MUST have a valid VISA or MC to link the gas card to. I now work at an import dealership, and I can tell you that even though there are some people like me who are going to own their Jeep(I have a 4-door Wrangler that I adore)or Chrysler or gas-guzzler no matter what gas goes to, the entire car industry is changing...people want fuel- efficient vehicles above styling, and some want BOTH! Jeep/Chrysler/Dodge have very little in the pipeline that is any of these things for at least 2 YEARS until they start making cars with Nissan. Americans have been spoiled with our gas prices over the last 2 decades, and this correction is not temporary...gas is going to continue to go up...maybe not past $5 a gallon this year, but have a few hurricanes in the Gulf or an extended war or other foreign policy problem and you will see gas as high as what they're seeing oversees(as high as $9.00 a gallon). Finally, quality is subpar for this brand. I worked for a Ford dealership and like GM they have made strides in quality, unlike Chrysler...fyi since the beginning of the rise in gas prices over the last 8 months almost 15% of all Chrysler/Jeep/Dodge dealerships have closed their DOORS. Nuff said.
Posted by: Jim Dotson | Jun 27, 2008 11:40:55 AM
I just got a 2008 Sebring Touring Sedan as a company vehicle and I have never been more disappointed in an auto. The ride is rough, the seats are beyond terrible and the V/6 is severely underpowered especially with the AC on. There is even chrome on the console that reflects the sun right into your eyes on each nice day!!
I can hardly wait for the miles to add up and to see his one go.
Posted by: steve dowst | Jul 19, 2008 12:58:42 PM
Don't waste your time reading-up on Chrysler vehicles. Certainly from my experience with their vehicles over the last 10 years, a Jeep Grand Cherokee and a Town and Country, the vehicles seem to be built using 1960's quality concepts. Built-in failures, particularly with suspensions.
Spend your money buying a Honda or a Toyota. I should have and will do so in the near future.
Posted by: PMC the 1st | Jul 19, 2008 10:28:31 PM
I strongly advise the fuel-concious shopper consider a broader product portfolio than what Steve is suggesting above.
For example, the Honda Pilot (a brand Steve suggested) gets among the worst mileage in its class of midsize crossover SUV's. The Pilot gets 15/20, making it second only to the Mitsubishi Uplander when gas consumption is concerned.
I propose the shopper consider any of General Motors Lambda crossover SUV's, such as the Buick Enclave. Not only does the Enclave use far less fuel than the Pilot in either FWD or AWD trim, but its far roomier, better designed, quieter, smoother, better brakes, better chassis response and far more luxurious. Both crossovers cost about the same.
The Shopper may also consider the new Ford Edge. The Edge may not have Enclave's luxurious ride, but it does use less fuel than the gas-hog Pilot, it's better designed, has terrific second-row seating, and greater utility.
The Toyota Highlander is also a great suggestion. While it falls short in many key areas such as 3rd-row seating, interior room and steering feel, it is among the most fuel-efficient midsize crossover SUV.
Make that THE mosst fuel-efficient crossover SUV.
Honda is also showing mileage deficiencies in their mainstream sedans, as well. While the Accord is a great car by every metric, we must disregard the mileage metric when making said claim. For example, the Accord base gets 22/31/25.
The Chevrolet Malibu--a better-designed car--gets higher gas mileage: 22/32/25. The Nissan Altima does even better than the Chevrolet: it gets a remarkeable 23/32/26!
With exception to the Toyota Camry hybrid, Toyota does not offer a mainstream sedan that can match the Chevrolet or the Nissan in terms of fuel efficiency. For this reason, Toyota is excluded.
It must be noted, however, that Honda does excel in making compact fuel efficient cars. I cite the Honda Civic as evidence.
So indeed, let's broaden our horizons when shopping for an exceptionally designed, fuel-efficient automobile or crossover SUV.
Posted by: Jeff Bartlett - Consumer Reports | Jul 20, 2008 12:42:51 PM
The clear takeaway for this, and really any enticing deal, is to do your homework and identify the best models for your needs and budget. We have owner cost data on the model pages to help in detail comparisons, and the New Car Selector can help you quickly filter by the variables that matter most.
And technically, the previous Pilot earned better mpg than the GM models cited above. We tested two, a 2003 EX got 19 mpg overall and a 2005 EX-L got 17. The Saturn Outlook earned 16 and the Buick Enclave 16 mpg. The Ford Edge got 16 mpg and the Mitsu Endeavor got 17 mpg overall in our tests.
Be sure to check our test results...
Posted by: DON H | Jul 21, 2008 10:55:18 AM
I BOUGHT THE DODGE GRAND VAN, HAD 116 MILES ON IT. CHRYSLER SAYS THAT IT IS CONSIDERED A USED VEHICLE. SO I DO NOT GET MY GAS CARD. SOMETHING JUST DOES NOT SEEM RIGHT. IF IT IS A DEMO, YOU GET A GAS CARD. THIS VAN WAS USED TO TRANSPORT VIPS. IT JUST DOES NOT SEEM RIGHT. I CALLED THE 800 NUMBER, AND THEY AGREED WITH ME THAT I SHOULD GET A GAS CARD. THEY WOULD NOT PUT THIS IN WRITING. THE FIRST CALL TO LETS REFUEL AMERICA, I GOT A CONFIRMATION NUMBER WHEN I WENT ONLINE AND REGISTERED.
DISAPPOINTED!!