All Cars, All the Time

General Motors Says "$1.99…Are You Out of Your Mind?"



Actually, maybe that phrase was from Denny's. Anyways, General Motors’ new promotion for select vehicles sold in California and Florida is a “price cap” of $1.99 for one year’s gasoline usage (no mileage limitation). GM will use gas costs based on AAA fuel-cost guidelines and refund the difference to the buyer for anything over $1.99.

Eligible vehicles in California include the 2006 and 2007 Chevrolet Tahoe and Suburban (one-half ton models only), Impala and Monte Carlo; GMC Yukon and Yukon XL (one-half ton models only); HUMMER H2 and H3; Cadillac SRX; Pontiac Grand Prix; and Buick Lucerne. Eligible vehicles in Florida include the 2006 and 2007 Chevrolet Impala and Monte Carlo, Pontiac Grand Prix and Buick LaCrosse.

The offer requires that buyers sign up for OnStar’s vehicle diagnostics service to get the monthly rebate. Previously GM announced that over the next several years, OnStar Service will become a standard feature for one year for GM's retail customers in the United States and Canada, so the OnStar requirement won’t be an added expense. A California resident who purchases a 2007 Chevrolet Tahoe and drives it 1,000 miles a month, would realize an estimated $103.75 monthly credit, based on the current average premium fuel price of $3.65/gallon.

Will this program work for GM? Well, this promotion has already generated news stories with the local press here in the Bay Area, so the PR value appears to be worth something. It’s also true that a promotion like this probably doesn’t devalue vehicle in the same way that a regular rebate would. Guaranteeing the price of gas will be $1.99 might set some buyer’s mind at ease and get them off the fence and into the dealership.

The credits are good until December 31, 2007 and may be used for any type of purchase at any location that accepts MasterCard. California and Florida buyers must purchase or lease and take delivery of an eligible vehicle between May 25 – July 5, 2006. Other states may get the promotion if it proves to be successful.

GM's press release can be found here. Beginning on May 25, consumers will be able to go to a special web site to calculate their potential savings based on their vehicle selection. It's interesting to note that GM's press release states that the special website is fuelprotection.com but the hyperlink goes to 199fuelprice.com. Neither of those sites currently works.