Automakers' gas gimmicks may backfire - The Driver's Seat- msnbc.com

Automakers' gas gimmicks may backfire - The Driver's Seat- msnbc.com

There's a lot of chatter about whether or not "gas gimmicks" are either an effective or responsible way for automakers to deal with skyrocketing fuel costs. Some argue that offering gas cards or guaranteed per gallon rates is teaching customers bad habits and not preparing them for the realities of fuel costs once the promotional period disappears. On the flip side, supporters claim that alleviating customers fear of the the unknown helps to spur sales in the short term and that customers are savvy enough to know what they are getting into.

Being an avid follower of the industry, sometimes its difficult for me to gain an outside perspective on incentives like this. Buying a car can be a very emotional decision for folks. It's not all sound logic for car buyers, so the argument that a larger rebate or lower finance rate may be a better deal in the long run doesn't always resound with buyers when they are walking the dealer's lot. Many times buyers find themselves asking the question "Why shouldn't I buy this car" rather than "Why should I buy this car." Any promotion that knocks out a reason against the purchase is a win for the manufacturer and dealer.

So, do I think free or subsidized gas is a "good thing?" From a sales perspective, yes. Provided that the buyer is offered the alternative between a larger rebate and the gas card, I don't see how the promotion can be perceived as a negative. From a moral point of view, does the temptation of cheap fuel pose some issues? Maybe. I'm not convinced that fuel subsidies in the showroom necessarily lead buyers to poor choices. Jim Press of Chrysler (why does that still seem odd?) has said himself that the biggest take rate on the $2.99 promotion is on smaller cars, so that would indicate that buyers aren't forgoing Calibers for Durangos just because they can. In any case, these fuel offers can only be seen as bandages until model mixes can be adjusted.