Is GM going to take a bath on this?
May 26th, 2006 | by mbhunter |This might get a lot of people’s attention, at least in California and Florida:
GM says it would subsidize gas purchases for some buyers
For some 2006 and 2007 GM models, you’d pay $1.99 per gallon for gas until the end of 2007!
Right now, for a 2007 Chevy Tahoe bought in CA and driven 1,000 miles a month, the gas rebate is about $100/month, or $1,700 over the course of the rebate period. This is less than the average incentive spending of $3,050 per vehicle that GM had averaged through April.
However, gas doesn’t need to go up very much for this to be a big liability for GM. $7 gas will make the owners of the subsidized cars happy, but might push up the cost to almost five figures for GM.
Why, oh why, did someone kill the electric car?
2 Responses to “Is GM going to take a bath on this?”
By Jason on May 29, 2006 | Reply
Hmm, how would you verify how much miles you drove? If its too much of a hassel it seems like it won’t be worth it. Then again, that might be what they want: buy the car for this discount and then not take advantage of it. Similar to rebates.
And if you don’t live in Florida or California I guess your out of luck. I think they should just lower the cost of their big SUV’s if they want to make them more attractive to buyers.
By mbhunter on May 29, 2006 | Reply
Jason, thanks for your comment!
I suppose there is some bookkeeping to do. In any case, GM will make out better offering a rebate like this because it’s up to the consumer to do some of the legwork. If s/he doesn’t, well, good for GM, they keep the money.
Looks like one of the dying gasps for GM, but I’ve been accused of being too gloom and doom, so take that with a grain of salt