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Gas Prices Lead Automakers To Shift Strategies

The high price of gasoline is having an impact on how dealers and automakers are marketing new cars as well as influencing consumers' vehicle preferences. Some dealers are offering huge rebates or free gas while Ford Motor Co., Chrysler Corp., and General Motors Corp., are all resorting to the time-honored incentive of zero-percent financing to pare their inventory. "Everybody is concerned about fuel economy," says Lou Lombari, general manager of the Linden Dodge and Linden Volkswagen dealerships in Linden, N.J. "Customers are trading SUVs in for something less of a gas guzzler." One example was a California woman who bought a 2006 Nissan Armada SUV four months ago but put it up for sale last week because it cost her $80 to fill the tank. "Now we are looking to buy a used Honda Accord or Civic," she said. "Something that won't cost so much to fill up." Gas prices, which recently topped $3 per gallon on the West Coast and even hit $4 a gallon in a few areas, like Beverly Hills, Calif., are expected to keep climbing through the summer due to the high price of crude oil and shortages at refineries. Auto makers have included the number of vehicles that get at least 30 miles per gallon in their advertisements, and both Ford and Chrysler have issued fuel-saving tips.

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