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Cut-price fuel might not be best way to draw in struggling drivers. (http://www.msnbc.msn.com/id/24709830/)

http://www.cleanmpg.com/photos/data/501/2006_Dodge_Durango.jpgRoland Jones - MSNBC - May 28, 2008

Dodge Durango – 15 mpg combined on the 08 EPA.

Drive a stripped $30,000 Durango 36,000 miles and it will only cost you $7,200 in fuel! Trade in w/ 36,000 miles in 3 years is $8,095. Only $10,000 a year to own a FSP :rolleyes: -- Ed.

Time was when automakers would slap a wad of cash on a car’s hood to shift it off a dealer’s lot. These days, with gasoline prices climbing to new record highs almost daily, they’re slapping down a can of gas instead.

With the summer driving season just around the corner, Chrysler recently launched its “Let’s Refuel America” program — an offer that caps the price of gasoline at $2.99 a gallon for three years for people who buy or lease new vehicles from the maker of Dodge and Jeep vehicles…

“Boy, have we gotten a great response,” Chrysler’s Vice Chairman and President Jim Press said on a conference call with reporters. “This has really resonated with the needs and the worries and concerns that customers have.”

But free-gas deals rarely work out well for automakers, experts say, and Chrysler risks coming off as insensitive for encouraging Americans to drive more at a time when soaring fuel costs are making most aware of the nation’s overuse of energy. And in some cases car buyers might be better off taking advantage of a rebate or low-interest finance deal… http://www.msnbc.msn.com/id/24709830/

I'm outraged at Chrysler stooping this low, not that I'd ever buy one of their vehicles.

This tactic reminds me of the mortgage lenders signing up people for loans who couldn't possibly repay those loans, especially if the variable rate loans ever had rate increases.

This the same mentality at work: have some intellectually-challenged individual sign on the dotted line for a gas-hog, with no thought as to what happens when the "cheaper-gas" period runs out. It's a disgraceful way to sell cars.

Harry

it's a good article, pointing out how it's not such a good plan. people would be better off financially looking at something smaller.....too bad all those manufacturers have painted themselves into a corner.

This promotion says to me "Hey, we can't build fuel efficient vehicles so let us help you with the gas bill". However, what do you do with that vehicle when the promotion ends and by that time gas prices are $5.00 or more. Good luck with resale value.

I think this will still be the best option for those who have need of an SUV or truck.

I mean your going to loss value no matter what you get, but now at least your paying a flat fee for gas. If it's only your secondary work truck then all the better because you'll stay within the 12,000 mile per year limit.

Hi GreenVtec:

___I pulled the TIV from KBB on an 05 Durango with just 36,000 miles on the ticker and in good condition. If someone needs a work truck, they should consider a new Ranger or Tacoma with the 4-cyl. ICE’s and a stick or buy a used Durango for 1/3 the price of new with just 36,000 miles on it. These things are depreciating so fast you would be lucky to get $8K for it after 3 years. Some dealerships are offering such low ball offers that the SUV used car market is all but non-existent!

___Good Luck

___Wayne

(Stepping on my soapbox!) I might get flamed for this, but people do have the right to make bad decisions. I like the idea of a small central government that keeps its nose out of my business. I see how government programs work and they are poorly executed and horribly wasteful.

I think more responsibility needs to go with the loan companies, and they should have someone who would be personally held responsible if too many bad loans are made.

States should have the responsibility to regulate which loan companies do business in their state, and the state’s attorney general should be the person who would be held responsible if they allow loan companies to give loans that can’t be pain back.

Individuals are also accountable. We are grown and have the right to make bad decisions. That is the cost of a free society. Some people do not know how to budget their money. They have to suffer from their mistakes, and hopefully they will not repeat their errors in the future. I for one take it as my responsibility to teach my children how to save and budget money. It’s a shame more parents don’t take the time to teach their children this skill.

(I have now stepped off my soapbox).

Hi Rxhybrid:

___We are all allowed choices but in the case of the Gas price ceiling, it is a bit bait and switch imho. The average consumer is clueless wrt the resale on the entire Dodge/Chrysler lineup but is hooked with a locked in $ savings for fuel. If Toyota offered this on Prius’, we would all be glad to take that as well but again, if the average consumer is not educated to the fact this type of vehicle even with a gas guarantee is all but un-sellable after a few short years, maybe we (the US) would not be in the predicament we are in currently?

___I used to be all about total freedom of vehicle choice but with everybody using everyone else’s fuel and that supply quickly dwindling, at what point does it become “You are consuming my fuel”? That day is very close at hand and unfortunately, we should be taking action so as to see that day never actually arrives vs. a gimmick that will keep us on our present “crash” course :(

___Good Luck

___Wayne

(Stepping on my soapbox!) I might get flamed for this, but people do have the right to make bad decisions. I like the idea of a small central government that keeps its nose out of my business. I see how government programs work and they are poorly executed and horribly wasteful.

I think more responsibility needs to go with the loan companies, and they should have someone who would be personally held responsible if too many bad loans are made.

States should have the responsibility to regulate which loan companies do business in their state, and the state’s attorney general should be the person who would be held responsible if they allow loan companies to give loans that can’t be pain back.

Individuals are also accountable. We are grown and have the right to make bad decisions. That is the cost of a free society. Some people do not know how to budget their money. They have to suffer from their mistakes, and hopefully they will not repeat their errors in the future. I for one take it as my responsibility to teach my children how to save and budget money. It’s a shame more parents don’t take the time to teach their children this skill.

(I have now stepped off my soapbox).

No man is an island.

The problem with an ideology that extols freedom & choice is that that freedom inevitably breaks down when bad choices are made.

Will the family member that invests, saves, & consumes unwisely take stock of her errors and change her ways without any burden on family and friends? Nope, she'll move in with the in-laws.

Will the cigarette smoker forego expensive healthcare because his bad decision to smoke for 40 years has unfairly and needlessly raised healthcare costs for entire risk pools? Nope, he'll still go in for every emphysema treatment.

Will the FSP owner eventually say "hey, I made a bad decision. Therefore, when gas rationing comes, you get more gas Marc."? Nope, he's gonna say gimme gimme gimme.

We are all in this together, and we all pay (directly or indirectly) for the bad decisions of others. To suggest otherwise is to believe every man is an island.

We can use the power of the collective to encourage good decisions & discourage bad ones. My tax benefits on my IRA contribution are the classic example. Market distorting? Yes. Anti-freedom? Yes (how dare they tell me what I should and shouldn't do with my money). A good idea? You bet.

I do not have a profound ideological distrust of government, which serves me well and allows me to support efforts to encourage good individual behavior (more sin taxes! less retirement contribution taxes!). It must be hard to have that deep distrust AND want to "do something", as that distrust effectively ties ones hands on the public policy level.

In the end, all that is left is to have faith that the consumer has the knowledge & wisdom to make the right choices eventually. I think I've seen enough consumer choice to state emphatically that I DON'T TRUST CONSUMERS ON THEIR OWN. Their purchase of FSPs up until the very last day of cheap oil is an obvious & predictable one, and something I wish we had avoided as Europe has.

That's enough for now. :)

Wayne,-most of this isn't news to you, but maybe to others

I compulsively follow prices of cars/SUVs on Ebay and CL. A Durango owner who actually got an honest $8500 trade in for his Durango should be the happiest guy in the world.

Like others said-KBB and NADA Black book are waay way behind on the drop in prices of big body on frame SUVs(Suburban,Tahoe,Durango Expedition). I follow the Suburban/Yukon XL prices
most closely,and the Ebay BIN on a 24000 mile 2005 Suburban-excellent shape-is $12,999 now-with no takers.In general this means the dealer bought this vehicle at auction for about 50%- of BIN-maybe $6000 max!!

A buddy even more tuned in to this says 2004 2005 Suburbans -low miles-are being auctioned in Houston for ~$5000. These are loaded ones leather etc, not the vinyl "work ones" you very occasionally occasionally see. Allowing for exaggeration this probably means $6000 for a 2004 -55,000 miles- is selling for about 16% of what the owner originally paid new in 2004($42000 for LT Suburbans 2wd).

The $5000 seems credible considering the BIN of $12,000 etc. They spend a fair amount spiffing them up-no dents,no scratches-super detailing.

The only "people" who should be buying big NEW SUVs are affluent folks- minumum $150,000/YR family incomes,and fleet buyers-transporting groups people to oil field sites,cops SWAT teams etc.

The city mpg of the best new big SUVs-Suburban 2007,08 is 14 mpg.I think mild hypermiling can get you very close to 19 mpg-casual driving-pure city-is 11-12 mpg.

Big SUVs are all but unsaleable now-in three years they might literally be worth scrap or parts stripping money-$1500 maybe??

The Dodge Durango gets the worst mpg-it is rated 14/19 with the 6 cyl
14/19 with the 4.7 V-8 and 13/19 with the 5.7 V-8- pitiful considering its interior volume is much less than the most famous FSP-the Suburban 14/20 mpg.

Nothing new to you of course, but some other folks might not be just aware of how the body on frame SUVs have tanked.It actually started before Katrina-in 2002,2003 when gasoline spiked to $1.69 from about $1.20(9/11 and the run up to the Afagan/Iraq war).

If you "need" a big SUV,and can keep your miles down-used ones will just continue to drop in resale price for the forseeable future.They do respond well to hypermiling, but 5500 lbs is 5500 lbs.They are pigs in city driving,and the Durango is about the worst with a V-6 getting Suburban V-8 mpg.

It is always the wrong time time to buy a Durango-even if the gas was free.Their Hybrid Durango is supposed to get 18 mpg city-uuuh, maybe I better put down a depost to beat the rush for that DUD.

I like Dodge, but have no hope for them.Their smallish vehicles-caliber- get relatively poor mpg also.A decent small motor would really help, but too late probably.
Charlie
PS KBB has always been BS on trade in etc.It is probably only right on really desireable cars-Prius ,HCH,FIT, etc

I'm outraged at Chrysler stooping this low, not that I'd ever buy one of their vehicles.

This tactic reminds me of the mortgage lenders signing up people for loans who couldn't possibly repay those loans, especially if the variable rate loans ever had rate increases.

This the same mentality at work: have some intellectually-challenged individual sign on the dotted line for a gas-hog, with no thought as to what happens when the "cheaper-gas" period runs out. It's a disgraceful way to sell cars.

Harry

It all reminds me of that scene played so brilliantly by Claude Rains in Casablanca where he closes down the Humphrey Bogart character, Rick Blaine's, casino. He says so cynically, "I'm shocked to find that gambling is going on here," as the croupier hands him some money and says, "Here are your winnings sir!" :rolleyes:

Choice isn't only in the hands of the consumer. The auto industry has choices also, as does the oil industryWhat happens when big powerful companies make decisions that are the right decisions for their bottom line but are defenitely the wrong decision for the country, the enviornment, and actually destablize the economy and thousands of American families.

Capitalistically, they have every right to go with that which gives them the most profit. It is Capitalism's corner stone. But when things start going haywire, as now, who is to stop or redirect them? More accurately, shouldn't they have been redirected before it degenerated into the mess we have now?

I think it should have. And I shudder to think it should be the government to redirect them. There is so much corruption, special interest groups, etc, etc, rampant that I can't see any way the countries needs would end up served. But who else is there??? The companies are certainly not going to change course. They will milk it for every nickel of profit they can.

There was a great quote in the old movie "Matrix, Re-loaded" a few years ago.

CHOICE.......

What those with all the power
Offer those with no power
To project the illusion of

FREEDOM!

Robert Lastick,
Exactly-what you mention is the problem with Capitalism and the "Free Market." They have no interest in promoting the national interests of us-THE USA.The bottom line for them, is their 3 month profit,and their bonus.It isn't in their interest to car about events 20 years off.

Besides,there isn't any Free Market in respect to oil.The producers price fix.Now if we-the USA-developed less expensive alternative sources of energy-they would drop the price,since they are becoming addicted to the huge influx of money from our pockets. Another possibility, if we accepted the pain that extreme conservation-rationing all energy sources- and voluntarily too the hit that renouncing foreign oil would cause-prices would drop. Don't buy all the Chinese junk that they produce-using $130 oil now.Let them have the oil, but don't buy their "stuff" if they don't conserve like we do/will.

We-as a country-could survive,and eventually prosper using just the 9,000,000 barrels/day we currently produce.There would be more drilling. more windmills, more electric cars/more coal, more nukes.We would also have lots of "home windmills"-they could be cheap.Forget the corn/ethanol fuel-criminalize using food crops for fuel.Refuse to sell food crops to oil producers for cheap prices.Develope a "food/cereal grain cartel."

Yes,some of this borders on crazy, but we could get by on 12,000,000 b/day in very short order(5 years) if we had to.

You are right-I shudder to think of the Feds running such a program-but who else?

This energy problem borders on war.Spending almost 1 trillion in Iraq-for stable oil prices-was/is a big screw up.Foreign oil is poison for us.The whole world hates us now.We need to use what we have and can cheaply control.Coal/wind,sun,tides/waves/oil and fairly extreme conservation-rationing.
Oh well,
Charlie

This is great political debate and we could easily blame the liberals and the conservatives for screwing up plenty (I'd blame the liberals, but then you'd know my stand so I won't say anything).
The funny part is that consumers can't do simple math. If you take that $2.99 per gallon for 12,000 miles per year; you'd only be saving $700-$1000 per year. Not to mention the fact that cars depreciation will fall drastically as mentioned above. It's just not a good deal. I don't blame the big companies for trying to sell at all costs - that's their job. Eventually though, someone will fall for it. I just laugh at the people that do fall for it.

You can't fault anyone but the individual. These companies are not selling a "faulty" product, just not a smart product. Same thing goes for those loan companies and home owners who fell for the ARMS. These people (companies and individuals) need to take responsibility for their own actions and not look for help from the government.

We, as consumers and citizens, need to begin making more frugal and financially responsible decisions. This will eventually dictate how big business sells to us. We still get turned on by commercials that show the big engines, big biceps, and hot women, and let that dictate our purchase. But that's also the beauty of it: a free capitalist society - anything's possible.

Jellyroll

I think this is going to bite Chrysler in the butt really badly when gas becomes $6 a gallon.

Is it so hard to develop a compact car with 40+ MPG? Evidently it is for them because there isn't a single domestic car that is capable of that per the EPA standards. :(

How will those owners feel when all the new energy production comes on line and oil drops back under $100 and fuel drops to $2.75?

Hi Chris:

___With gasoline futures running at $3.50 per, I would mortgage the house and short a few thousand contracts if I believed as strongly as you that we will see $2.75 anytime soon. A great contrarian play that makes good sense given the supply and demand numbers. I really do hope that is a scenario we will actually see for the good of the country in fact. I just don’t think we are going to see $2.75 any time soon is all?

___Good Luck

___Wayne

Hey Wayne,

Here are a couple of articles on why I think in 2-5 years oil will be back near $75.

Asian countries begin to burst the oil bubble - abandoning price controls (http://www.freerepublic.com/focus/f-news/2022770/posts)

US drilling exceeds 22 year high (http://www.freerepublic.com/focus/f-news/2022449/posts)

The U.S. Is Poised to Hit a New Oil Gusher (http://www.kiplinger.com/businessresource/forecast/archive/The_U.S._Poised_to_hit_New_Oil_Gusher_080317.html)
This is actually closer to 300-400 Billion Barrels

Oil Shale Reserves - 1.5+ Trillion Barrels (http://en.wikipedia.org/wiki/Oil_shale_reserves)

Mesa Power Places Large Wind Turbine Order With GE (600+ Turbines) (http://www.nawindpower.com/naw/e107_plugins/content/content_lt.php?content.2241)

Westinghouse in deal to build 2 nuclear reactors (http://www.post-gazette.com/pg/08148/885221-100.stm)

One last reason I think the prices will come down again:

In the late 1990's, we had the Technology run up (and subsequent bubble bursting), then in the early 2000's it was the housing market and we know what's happening there. Commodities and Oil is just the next run up. At least for the big spike. I'm hearing that there are institutional investment firms buying oil futures contracts, etc. I know Congress is looking into setting better guidelines for purchasing futures (i.e. higher fees, etc.)

Jellyroll, it isn't the libs or the conservatives.All those groups care, about is being in power,and if anyone of them were true leaders they would have pushed for a real national energy policy in 1979 when we faced this for the second time(1st was the oil embargo after the Yom Kippur 1973 was). None of them did.

Now it isn't just "people making bad choices" and the manufacturers just following the consumers wishes.GOOD ADVERTISING CAN SELL ALMOST ANYTHING-ALL SORTS OF USELESS CRAP IS SOLD BY ADVERTISING. This has been widely accepted as true-ask J Goebels(can't since he is dead) but if you say it often enough-people-a large percent of the people-will believe it.This is why the presidential candidate with the most $$ has a HUGE advantage. They-candidates-manipulate us in voting for them.Hey, how else would we have ended up with our current rather poorly spoken president,or a very,very inexperienced Dem candidate for president.We don't end up with the best candidates,we end up with the one who is sold most effectively.

On the bright side, advertising can save us-just as it is getting folks off cigarettes. If we get leaders who really want to develope energy independence they will be able to convince us to drink our own urine, if that is what it takes.People will do all sorts of crap, if they are told it is the right thing to do.No,I'm not suggesting that we will have to drink urine to save water, but we sure as heck can change to CP bulbs,carpool-buy tiny cars-keep thermostats up when we aren't home-insulate our houses-learn to like NUKES(plants)-push more coal plants with scrubbed exhaust,and sequestered CO2-fill TX,OK with 100,000 windmills-only about $200,000,000,000 600 days of Iraq.-or 1/2 million 2 megawatt windmills for a trillion dollars-1.5 Iraq wars.How freakin' hard could that be-.

Big aside-there are more windmills along 1-40 now.There was a big farm-100 or so-outside Weatherford OK off I-40, but now there is another about 50 miles W of Amarillo off I-40. If you drive thru W TX,you will understand the windmills-no people, lots of wind,lots of open areas for windmills.
Charlie

PS-Chris Huff-I hope you are right.I've wondered how the Chinese can cope with $5 gas and $135 oil-heck they make what-$250/month??
Still 100 billion barrels is just 15 years at our current use levels.
Hey maybe I should buy one of those 2005 - $12,000 26,,000 mile fancy Suburbans while they are so cheap.Unfortunately,I don't see these fields being significant for 5-10 years.

Hi Chris:

___Nothing new with the links. We are sitting on enough Oil shale to go for a hundred Plus but prelim estimates are $70 - $90 per and falling to $45 per after 10 years. Except the market will grab it up and keep prices where they are.

___Again, if you are a betting man, you had better be short as many contracts as you can margin. Reality, if we were all that smart, we would all be rich for the same reason :(

___Longer term, when PHEV’s/EV’s begin to take off, even more pressure on the oil market should be relived bringing prices down … Just like hybrid sales however, there are to many people buying even more cars even though they are far more fuel efficient than the vehicles that preceded them.

___Good Luck

___Wayne

-phoebeisis,

The Chinese people can not afford $5.00 gas. But their gov. subsidies fuel costs, so it only cost the people about $1.00 a gallon. I wonder a little what will happen after the Olympics. Are they investing like crazy now to "put on a good show" and will cut back dramatically after?

Tin Foil Hat time here:
I've heard theories that the Saudis worked with us in the cold war to bankrupt Russia by keeping oil prices artificially low. Oil was a key to Russia's income and they couldn't afford the military build up without oil income. Now, we are keeping oil high to bankrupt China before they can become a superpower since they don't have much oil or coal of their own. Lastly, lets burn up everyone else's oil and save ours for last.

Right now though, lets keep on hypermilling to keep our individual costs down. Tell a few people about it and lower consumption by another 5-10%.

Will the cigarette smoker forego expensive healthcare because his bad decision to smoke for 40 years has unfairly and needlessly raised healthcare costs for entire risk pools? Nope, he'll still go in for every emphysema treatment.

If social costs are the measure, from what I've read I am more of a drain on social costs as a non-smoker as I'll probably live longer than the smoker and draw social security for longer while still likely dying from some sort of problem that is as expensive and drawn out as emphysema.

The poor schmuck that smokes and dies after paying lots of cigarette tax and Social Security but never collects on the SS is to our financial benefit.

Maybe we should let smokers opt out of Social Security but double their Medicaire.;)

Chriss Huff-yeah,that is tin foil in the hats stuff.Like we were clever enough and MORE IMPORTANTLY PATIENT ENOUGH- to pull off something like that.

You know, I can't think of any countires-now or in the past-that become "good" or powerful, or good for their citizens by virtue of mining or natural resource "selling." True GB had coal,and iron deposits, but it didn't export them as raw products,did they?

Iraq/Kuwait/Iran/Ven./Mexico all big exporters of mined products-all S holes more or less. Saudi Arabia is riding for a fall-Iran-who knows, but even huge oil revenue can only do so much for a country of 60,000,000 people.

We-USA- and Canada-are really blessed with resources, but we use most of them here except for farm products,and timber-Canada exports, but they are almost a wing of the USA in some ways.

Yeah,I wish we were that clever.The USSR had a lot of very smart folks and resources, but plenty of lazy corrupt drunks also(but so do we??).It is also expensive to work in very cold climates. Not sure why they failed-probably just because of lack of incentive to work hard,I guess??I must admit I have a sneaking suspicion that more than just commie laziness and drunkeness caused their fall.We have plenty of lazy drunks also??They have more??

Yeah,China is rising by selling a lot of non essentials to the west and east.Textiles and food,and some limited numbers of electronics are essential. DVD players-super duper TVs,radios, and the cheapest of hand tools probably aren't essential-or even cheaper in the long run.Same story on the millions of SKS and AKs that were the first widely sold-kinda expensive-more than $50-products they sold us. Did we really need 20,000,000 AKS SKS and 100,000,000 rounds?Did it save us money in the long run?? Would we have been forced to buy them elsewhere-of course not-they were a pure waste of money-luxury items so to speak!!

I can see China falling, but it won't be our plan-just speculators and the oil cartel maxing their profits and killing the golden goose because of greed.There isn't any oil shortage, but they know we will pay more for oil,so they charge more-simple!! We're finally reacting-conserving and windmills etc-.We need about 5-15 more years to get a drop in price,I think.Lotta mis-steps along the way-CORN ETHANOL being exhibit one in that respect.