With the much-publicized Chrysler $2.99 Gas Guarantee program being extended, we took another look at this program to help car shoppers understand its value. To see the complete financial picture, we compared eligible, Consumer Reports-recommended Chrysler models against competitors using our new-car owner cost data. We found that in these cases, it cost less to accept the full rebate as an incentive than the gas card, even when combined with a partial rebate. But even still, the Chrysler models typically cost more to own than their peers in the long run.

How we analyzed the Chrysler $2.99 Gas Guarantee
Consumer Reports Auto Price Services analyzed the data on how much the vehicles will cost to own for three and five years based on the fuel savings and cash-back rebate available for Chrysler vehicles compared to similar models from other manufacturers. We looked at the data for the only four eligible vehicles recommended by Consumer Reports: the Chrysler PT Cruiser, Chrysler 300C, Dodge Charger SXT V6, and Charger R/T V8.

Naturally during the three years of the $2.99 deal, annual fuel costs shown are usually less than the other vehicles listed. However, if you look at the fuel cost combined with the overall owner costs for the first three years and then for five years, you see that there isn’t much savings after all. In fact, three models—the 300C, PT Cruiser, and Charger R/T—cost more to own in five years than all the other models compared, even when factoring the Chrysler gas card and cash incentives.

The data in the charts is based on the fixed $2.99 gas price for three years and driving 12,000 miles annually. During that period, we compared the 2008 EPA overall mpg estimates and CR’s overall gas mileage, applying the costs covered by the program. Where the Chrysler program did not seem to cover the projected annual fuel costs based on our testing, we added the additional, estimated fuel costs to provide a real-world picture. The remaining two years and all competing models strictly reflect fuel consumption based on our test findings and $4.00 a gallon for gas.

Our cost of ownership data factors in depreciation, fuel costs, interest on financing, insurance costs, maintenance and repair and sales tax. (Full, comparable owner cost information is available for new cars in the model pages, along with pricing data, to ConsumerReports.org subscribers.)

Besides the "gas card plus rebate" option, buyers can choose a cash-back incentive or 0 percent financing instead. According to Chrysler, the cash back has been more popular with buyers as it affects financing and lowers monthly payments. We ran the numbers to see the savings if consumers choose only the cash-back incentive and not the gas card deal, plus lesser cash incentive. As you can see in the chart below, the adjusted owner cost numbers for the first three years are within the price range of the other models listed. The savings for Chrysler car buyers is greater choosing the rebates, rather than the gas card option. However, buying an incentivized Chrysler is not necessarily cheaper than competing models in the long run. Plus, these four Chrysler models all perform in the lower half of the CR Ratings chart for their car type. For competing models, we factored rebates when available nationally. Of course, all brands offer periodic, regional deals, especially as the end of the model year approaches.

Currently, just under 10 percent of buyers are choosing the gas card program, according to Chrysler. They have seen some sales improvements from April to May, but still lag behind the industry due to a product lineup that includes a number of large, gas-guzzling vehicles. The gas promotion is in effect until July 7th. Since this analysis was performed, Chrysler reportedly announced a 2 percent price increase. This plan is definitely a moving target, and in this case it is becoming less favorable.

Bottom line
With the gas prices reaching new heights, manufacturers are looking to lure buyers into their dealerships by offering attractive promotions and incentives. While the deal may look enticing at first glance, it is important to look at the full picture, because it may not be a good deal after all. With the Chrysler deals, accepting the rebates can lower the owner costs and add appeal if you are drawn to these models. However, we would recommend you consider all vehicles in the segments, as there simply are better choices available based on our testing and analysis.

In choosing your next ride, look for a model that performed well in Consumer Reports tests, has average or better predicted reliability, a good overall safety Rating, fuel economy at the top of its class in our testing, and average or better estimated owner costs. All this information is readily available at ConsumerReports.org. The New Car Selector tool can help you quickly narrow a list of contenders down to the few that most closely match your needs and budget.

—Liza Barth and Mike Dempsey