Chrysler and VW dangle their (incentive) carrots

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Automakers are desperate to sell product. Within the last few days, Chrysler has promised to lock gasoline prices to $2.99 a gallon and Volkswagen has announced that it will put $1,500 toward a college fund.

Considering that Californians are paying about $4 a gallon, the Chrysler scheme might seem tempting at first. The deal applies to various Chrysler, Dodge and Jeep models (though not the gas-guzzling ones). Buy one of them new and the company will supply a credit card to use at the pump. The customer pays $2.99 a gallon, with Chrysler settling up the remainder. However, this has a cap of 12,000 miles a year for three years, and a customer cannot take advantage of other incentives.

If a driver did 12,000 miles a year and got an average of 20 miles per gallon, he or she would use 600 gallons. Let’s call the Chrysler deal $3 a pop against the current $4 at the pumps. So that’s a saving of $600 a year, $1,800 over three years (no doubt more as the price of crude oil rises, but by how much is an unknown quantity). Hold that figure for a while.

Someone with youngsters might well fancy an all-new, seven-seater VW Routan. It seems like a nice, practical family vehicle. That someone might also be looking to the future and wondering how to fund a college education for his or her pride and joy. Right now, Volkswagen will leap in with a check for $1,500 toward tuition fees.

So then, that’s $1,800 from Chrysler, $1,500 from VW. The way things are at the moment, anyone who walks into a showroom could probably get more off the price of a new car just by gentle negotiation. And regarding the first deal, it might be a smarter course of action to purchase a more fuel-efficient car. This would provide financial benefit throughout its whole operational life, not just the first three years. Just remember: It’s a buyer’s market.

— Colin Ryan