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Extra
The new magic words: Free gas
Forget employee discounts, big rebates and free toasters. Today's hottest perk is unleaded regular. Plus, see how gas prices in your state compare.
By Rick VanderKnyff
More and more companies trying to grab the attention of potential customers seem to think they've found the magic words.
Free gas.
They might just have something there. At a time when pump prices have spiked above $3 in many parts of the country -- and some analysts say $4 gas is not too far off -- the offer of free fuel can be a strong lure.
Mitsubishi is the highest-profile practitioner of the free-gas come-on so far, offering free fill-ups for a year to customers who buy 2005 model-year vehicles before the end of October
That deal follows an offer by VW, which sent targeted flyers to 250,000 U.S. consumers offering a $50 gasoline card in exchange for test driving one of their used vehicles.
Other free-gas offers in the news recently:
- A Midwestern convenience store chain called Kum & Go gave away gasoline equivalent to a tanker truckload -- that's 8,200 gallons -- to each of four winners in September. "When we envisioned this promotion we never imagined gas would reach $3 per gallon," CEO Kyle Krause was quoted as saying. "This is a significant prize; having free gas for five years is like winning the lottery."
- The tiny town of Grums in Sweden was put on the map when a small station proclaimed a noon "happy hour" one day last month in which they gave free gas -- and more than 300 cars lined up (gas in Sweden is more than $6 a gallon).
- A Puerto Rican hip-hop/reggaeton performer named Bimbo has been staging gas giveaways at stations in major U.S. cities, personally handing 100 $35 gas cards to raise publicity for his politically tinged song "Fuleteame El Tanque" ("Fill Up My Gas Tank").
- A Texas Web hosting company is giving new customers a gasoline card worth $40. And at a motor speedway in North Carolina this month, attendees of an auto show searched for thousands of dollars' worth of $20 gas cards.
Free gas -- the next company perk?
It's not just customer giveaways. Cheetah Chassis, a Berwick, Pa., company that makes chassis for tractor-trailers, gave each of about 200 employees a $100 gas card -- "just to try and help out," general manager Garry Hartman told the Associated Press. "Gas prices are up. Their expenses are up. It's something we do to help them out with high costs."
Prices have eased somewhat since spiking just after Hurricane Katrina hit, but with Rita finishing the one-two punch to an already stretched U.S. infrastructure, gasoline prices are not likely to come down significantly soon. "We're going to continue to see not only higher prices but gasoline availability issues on the Gulf Coast and other issues in the southeast United States, mainly due to fuel distribution problems over the short term," Geoff Sundstrom, spokesman for AAA travel group, told Reuters.
"Predictions last week of $4, $5 and $6 per gallon of gas really were not very helpful because they incite panic buying and hoarding," Trilby Lundberg, editor of a biweekly gasoline survey, told CNBC's "Morning Call."
Related news and commentary on MSN Money
Last week, President Bush came with a rare call for conservation. "We can all pitch in by being better conservers of energy -- people need to recognize the storm has caused disruption," Bush told an audience Monday at the Department of Energy. He also said he would authorize tapping the nation's Strategic Petroleum Reserve if needed.
On the same day, the attorney general of New Jersey took civil action against 20 stations and the gas companies that supplied them, charging violations of the state pricing laws becoming the first state to file formal action. Other states are also investigating gouging complaints in the wake of Katrina, as is the Federal Trade Commission.
While some say prices will continue to ease, the era of $2 gas may be gone forever. There are many unknowns when it comes to predicting gas prices, Lundberg said on CNBC, but a drop of 10 to 15 cents at the pump in the next two or three weeks is possible due to supply restoration, she said.
"If crude oil prices cooperate, another cut of about that amount in the last weeks of the year (could happen)," Lundberg said. "So possibly total, perhaps (a cut of) as much as 20, 30, 40 cents (per gallon)."
A potent lure
The rising cost of gas and its front-and-center place in the minds of drivers makes promotional giveaways attractive, not only to legitimate companies, but to scammers as well. One Houston-area Web site was offering free gas in exchange for filling out marketing surveys -- and a $6.95 fee. The site dropped the fee after revealing to local consumer watchdogs that they had not yet given customers any free gas, despite accepting fees.
Dave Schembri, executive vice president for sales and marketing at Cypress, Calif.-based Mitsubishi Motors North America, said the company considered giving employee-pricing discounts like the Big Three U.S. automakers offered this summer but wanted to do something different and respond to consumer concern about high gas prices.
Consumers and dealers responded enthusiastically when Mitsubishi tested the idea.
Mitsubishi will give customers prepaid debit cards good at most major gas stations worth $1,500 to $2,500, depending on the fuel efficiency of the model purchased and whether it requires regular or premium fuel. The offer assumes customers will drive 12,000 miles a year and estimates costs of $2.80 for regular and $3.10 for premium.
Mitsubishi has been struggling to revive its image after acknowledging five years ago that it had systematically hidden auto defects to avoid recalls. The company's U.S. sales were down nearly 30% in the first eight months of this year, according to Autodata Corp.
| How do gas prices in your state compare? | | State | Regular | Mid | Premium | Diesel | State | Regular | Mid | Premium | Diesel | | Alaska | $2.78 | $2.95 | $3.11 | $2.85 | North Carolina | $2.89 | $3.07 | $3.20 | $2.88 | | Alabama | $2.78 | $2.97 | $3.06 | $2.84 | North Dakota | $2.75 | $2.85 | $2.95 | $2.80 | | Arkansas | $2.73 | $2.88 | $3.06 | $2.78 | Nebraska | $2.78 | $2.84 | $2.92 | $2.79 | | Arizona | $2.93 | $3.05 | $3.23 | $2.98 | New Hampshire | $2.81 | $3.04 | $3.15 | $2.82 | | California | $2.96 | $3.15 | $3.21 | $3.20 | New Jersey | $2.87 | $3.08 | $3.19 | $2.76 | | Colorado | $2.88 | $3.08 | $3.22 | $2.91 | New Mexico | $2.84 | $3.03 | $3.16 | $2.88 | | Connecticut | $2.89 | $3.14 | $3.22 | $2.98 | Nevada | $2.93 | $3.09 | $3.20 | $3.04 | | District of Columbia | $3.02 | $3.22 | $3.31 | $2.97 | New York | $2.97 | $3.18 | $3.24 | $3.05 | | Delaware | $2.86 | $3.04 | $3.17 | $2.86 | Ohio | $2.71 | $2.89 | $3.00 | $2.84 | | Florida | $2.82 | $3.06 | $3.11 | $2.90 | Oklahoma | $2.60 | $2.69 | $2.84 | $2.68 | | Georgia | $2.75 | $2.96 | $3.09 | $2.75 | Oregon | $2.83 | $2.99 | $3.03 | $3.00 | | Hawaii | $3.27 | $3.45 | $3.52 | $3.30 | Pennsylvania | $2.83 | $2.98 | $3.11 | $2.91 | | Iowa | $2.71 | $2.85 | $2.99 | $2.75 | Rhode Island | $2.90 | $3.08 | $3.18 | $2.91 | | Idaho | $2.91 | $3.07 | $3.15 | $3.17 | South Carolina | $2.84 | $3.02 | $3.17 | $2.80 | | Illinois | $2.79 | $3.00 | $3.10 | $2.92 | South Dakota | $2.72 | $2.90 | $3.02 | $2.76 | | Indiana | $2.76 | $2.97 | $3.05 | $2.82 | Tennessee | $2.82 | $2.99 | $3.13 | $2.84 | | Kansas | $2.70 | $2.77 | $2.88 | $2.81 | Texas | $2.77 | $2.93 | $3.03 | $2.78 | | Kentucky | $2.74 | $2.94 | $3.07 | $2.78 | Utah | $2.86 | $3.01 | $3.14 | $3.10 | | Louisiana | $2.66 | $2.83 | $2.96 | $2.73 | Virginia | $2.82 | $2.96 | $3.08 | $2.83 | | Massachusetts | $2.89 | $3.10 | $3.22 | $2.88 | Vermont | $2.88 | $3.09 | $3.23 | $2.88 | | Maryland | $2.93 | $3.11 | $3.19 | $2.91 | Washington | $2.89 | $2.99 | $3.14 | $3.09 | | Maine | $2.77 | $2.98 | $3.07 | $2.84 | Wisconsin | $2.75 | $2.86 | $2.99 | $2.84 | | Michigan | $2.69 | $2.85 | $2.96 | $2.85 | West Virginia | $2.81 | $2.94 | $3.09 | $2.89 | | Minnesota | $2.65 | $2.75 | $2.83 | $2.76 | Wyoming | $2.84 | $2.96 | $3.15 | $2.89 | | Missouri | $2.67 | $2.78 | $2.94 | $2.71 | U.S. avg. | $2.81 | $2.99 | $3.09 | $2.88 | | Mississippi | $2.69 | $2.84 | $2.97 | $2.77 | Month ago | $2.60 | $2.76 | $2.86 | $2.65 | | Montana | $2.84 | $2.96 | $3.11 | $2.94 | Year ago | $1.91 | $2.03 | $2.10 | $2.02 |
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Source: AAA Fuel Gauge Report, Sept. 28, 2005
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