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GM Partially Subsidizes Consumer Fuel Purchases for Select New Vehicles in California and Florida

23 May 2006

Gas
California premium gas prices have climbed 43% since January.

GM today announced its “GM Fuel Price Protection Program”—a limited, regional program that caps what consumers pay for gas at $1.99 a gallon when they purchase select 2006 and 2007 GM full-size SUVs and mid-size cars.

The program provides consumers with a partial credit for their fuel purchases for one year based on the consumer’s estimated fuel usage each month. Fuel consumption is calculated based on the mileage driven, as recorded by OnStar and the EPA city fuel economy mileage rating for the vehicle.

Using the calculation of the consumers’ estimated fuel usage each month, they will be credited for the difference between the average price per gallon of premium fuel in their state, as published by the Automobile Association of America (AAA) and the $1.99 gas price protection cap.

The credit will be applied each month to a pre-paid card, which will be issued to the consumer. The credits are good until December 31, 2007 and may be used for any type of purchase at any location that accepts MasterCard. There is no mileage limitation.

Select EPA Estimated Fuel Economy
Model City Hwy. Comb.
2006 Tahoe 16 20 17
2007 Tahoe 16 22 18
2006 Suburban 14 19 16
2007 Suburban 15 21 17
2006 HUMMER H3 16 19 17
2006 Cadillac SRX 15 21 17
2006 HUMMER H3 16 19 17
2006 Cadillac SRX 15 21 17
2006 Impala 18 28 22
2006 Grand Prix 20 30 24
2006 Lacrosse 20 30 23

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 (as of May 15).

A Florida resident who purchases a 2006 Buick LaCrosse with the standard V-6 engine and drives about 1,000 a month would see an estimated monthly credit of $60 based on the current average premium fuel price of $3.19/gallon in that state.

To participate in the program, consumers who reside in California and Florida must purchase or lease and take delivery of an eligible vehicle between 25 May to 5 July 2006 and enroll in the OnStar Vehicle Diagnostics service. The diagnostic service is a GM exclusive service that automatically runs hundreds of diagnostic checks on key vehicle operating systems and then sends a monthly e-mail to subscribers about their vehicle.

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.

May 23, 2006 in Fuel Efficiency, Fuels, Sales, Vehicle Manufacturers | Permalink | Comments (41) | TrackBack (0)

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Comments

Another incentive to consume more fossil fuel and create more GHG instead of less???? Is this part of the USA - Pacific RIM Pact? This is simply incredible and unbelievable. I'll never buy another GM product even if gas is supplied free for 4 years.

Ugh. Incentives to purchase and operate gas-guzzlers.
It's a good example of how market forces alone won't get us out of the hole we've dug for ourselves. The US government needs to impose fuel taxes and provide tax breaks for efficient vehicles to counter this kind of stuff.

Just heard that Toyota is offering gas incentives on the Corolla. Use less gas and pay less for it at the same time.

Listen up, Tahoe buyers!!

In a year, Tahoe buyers, don't complain about high gas prices.

Holy crap, man. Talk about a southward stab at desperation.

And we wonder why our national car production scene is the stuff of jokes.

Now this is very stupid to buy that car just for the incentives.

With 5.3L displacement(is it?) and it "only" produce 320hp? Really inefficient engine this is. Even a 2.0 diesel can squezz out 170hp

http://paultan.org/archives/2006/05/23/new-audi-20-tdi-with-piezo-injection/

Bye, bye Detroit. Really sad isn't it?

The bigger the vehicles, more the gas prices and more discount GM has to give.

If the gas prices exceed $3.5/gallon, they will increase the incentives. How long can they afford.

BRING OVER THE OPELS!!!

Osama Bin Laden LOVES GM !!!!!!!!!!

It is certainly nice of GM to make this offer but selling people junk is not going to help the company in the long run. They have to come up with a better product; a good PHEV would give them half a chance. With China knocking on the US auto industry door next year, what will happen to them. How could our automotive leaders be so inconsiderate of their customers or of the people who work for their company who may well be out of jobs later on?

I noticed that John Deer is moving into the wind energy field as part of innovative farm development. Perhaps GM should also consider another type of investment. Cars that run on renewable electricity would really be good for them but then their leaders would first have to swallow their pride. Yet, all is possible.

adrianakau@aol.com

When GM files Chapter 11, they will be able to blow this one off. Remember that when you evaluate the plan.

Sad.

Its plain, good marketing strategy "buying" time to retain market share/customer base.
Please, Please give GM(Giv'm Money) time to prove our engineers are better then theres'. The problem is, the USA does not have enough of them as proven by this sales scheme; They all went into marketing!

Wow, this is an expensive bandage, but the wound is still gushing blood underneath. Patch up the wound before you bleed yourself to death, GM.

Man, that's pathetic.

You guys above covered anything I had to say. Good Job.

Why just Cali and Fla? What about the rest of us. And why only mid size cars and full size SUV's? What about truck buyers and Aveo drivers? Only for a year? then what? A Lacross buyer in Fla gets est $60 credit, yet pays half that or more in the onstar subscription. I did a quick search and found $34.95 for onstar. Dont know if thats a renew price, but doesnt matter.

I am not really wanting an answer to these questions. I do agree with all the above posters. And here I was sorta defending GM in an earlier post last week. This may pretty much end any chance of me going back to a GM product. Unless they introduce something really profound! Nissan and Honda are in my mind now.

That is THE worst bit of marketing I've ever seen. Poor product, expensive, and expensive to maintain, and all you can offer is crap? I hope GM dies fast!

From a purely financial perspective, this is actually a smart move. Do the math:

15000 miles/year @ 15 MPG = 1000 gallons/year

Current gas price = $3.30/gallon (California)
Hedged gas price = $2/gallon

Expected value of this rebate = $1330

If the averge price goes down, the value is reduced accordingly. Even at this level, I bet GM had to offer higher "cash back" incentives up to now. It's just that buying a car is an emotional event and, most carbuyers obviously care more about gas prices than the purchase price.

I still wouldn't buy one of those gas hogs, though, because the gas will only be affordable in the first year (plus, you produce a lot of CO2). Of course, you are free to hedge on your own nickel after that but that's a crap shoot. It's all about where you think gas prices will go in the future. I'd recommend getting a reasonably priced car that gets good mileage (<30 MPG combined) to avoid this Detroit roulette.

G.M. =
G uzzler M arketing

I'm surprised only one person pointed out that the value of this promotion is far less than the other rebates and incentives GM typically offers. Seriously, how many times have we seen the TV/radio ads of "$3000 cash back on every new Suburban! $1500 cash back on a brand new Impala!" and so on. I think they were up to an average of something like $2400 in incentives per model. The cost of this program would be far less than their average spent on incentives anyway.

Just trying to shift stock before they go Chapter 11.....

Rafael is right, as he appears to be about alot of things on this site. This is a rebate or an "incentive", pure and simple. This "incentive" actually makes sense, or, in other words, has a definition. We see alot of ads in the papers with all these rebates, or cash incentives, none of which make sense. But I still dont know why this is limited to two states, and only for a year. The math still does not justify it for me, even if I lived in Cali or Fla.

All: Check out the correlations shown graphically on this website between the president's approval rating and gas prices:
http://www.leftbusinessobserver.com/BushNGas.html

The last sentence reads, "So if Bush wants to keep from matching Carter's 28% and Nixon's 25% lows (the worst approval ratings of the past 50 years), he'd better get Cheney to make sure that gas doesn't hit $3.50 this summer."

Hm, California and Florida, eh? Nothing politically valuable about those two states...

GM sets the price of Saturn Vue Hybrid @ 23K
http://www.msnbc.msn.com/id/12952497/
Its just 3K more than regular Vue, but has 27 hp extra.

GM is late in the game, but atleast trying to catchup.
After all, it costs only few hundreds more than Civic hybrid, but has triple the cargo capacity.

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