Jul. 18--Chrysler gathered sales and finance managers together early in 2008 and asked them: If you could give potential customers anything to make them actual customers, what would that be?
The answer quickly surfaced: Lower gas prices.
That meeting was in February, Chrysler spokesman Stuart Schorr said. The national average for regular unleaded hovered just above $3 a gallon then, according to AAA's fuel gauge report. On Thursday, July 17, the national average for regular unleaded was $4.114 a gallon, the same report said.
If Chrysler's decision-makers have any regrets about offering customers a gas card that holds prices at $2.99 a gallon for up to three years -- subject to several conditions -- they're not admitting it.
"That's perfect for us," Schorr said of today's gas prices. "That's exactly what we planned on."
As gas gets pricier, the Chrysler program -- which ends July 31 -- would appear to be increasingly valuable.
"As it gets higher and higher, it's probably going to turn some heads," said Tom Walker, executive vice president of the Dayton Area Auto Dealers Association.
"It's unprecedented and very risky," said John Heitmann, a University of Dayton professor and auto industry historian. What happens if a new war ignites in the Middle East, in Iran, for example? he asked.
If customers choose the program instead of cash back or lower interest rates, they receive a $2.99-a-gallon-guaranteed fuel card for up to three years. The offer is capped at a certain number of gallons a year, with each model seeing different caps. For example, the PT Cruiser Sedan -- which Chrysler says gets 21 mpg in the city and 26 mpg on the highway -- is capped at 1,636 gallons over three years. The Aspen SUV -- which Chrysler rates at a combined 15 mpg -- is capped at 2,400 gallons over three years.
Schorr said Chrysler purchased fuel futures contracts with a Wall Street financial institution -- one he wouldn't name -- to prepare for prices the automaker fully expected to rise. The company expected about one in 10 customers to take advantage of the program -- which has happened so far, he said.
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