We’ve been talking about ways to save money. Today we want to look at something that is top of mind for many of us – how to save money on gas.
Follow the price of oil like a speculator
Oil prices go up and down. If you knew the price of oil went up, you might want to hurry to fill up. If you knew it went down, maybe it would pay to wait a day or two. Now you can track the price of oil at Oil-Price.net. Large companies do it; why shouldn’t we?
Time your purchase
While we haven’t seen any research that proves this theory, it seems that gas prices often go up right before the weekend, especially long weekends. So test for yourself and, if you agree, try to buy your gas by the middle of the week.
Some credit cards offer extra rebates (e.g. 5% instead of a normal 1% to 2%) on fuel purchases during an introductory period (e.g. six months). Consider this – if you have good credit, employ a strategy where you get a new card and use it through the ramped up reward period. Then move on to another one.
Our grocery store chain has opened convenience stores next to their main stores. To drive (pun intended) business to these new stores, they’re offering an incentive to their grocery store customers.
For every $25 you spend on groceries, you get a 5 cent per gallon discount on gas at their convenience store. We saved 60 cents a gallon on a recent purchase.
Shop before you shop
Sites like Gas Buddy, Gas Price Watch, and Fuel Me Up help you find the gas stations with the cheapest fuel in your area. Gas Buddy seems best for our area; check them all out to see which is best for you.
But before you do …
Is it worth the drive to save money on gas?
We know people who drive out of their way to go to the gas station with the cheapest fuel. It seems almost oxymoronic, doesn’t it? And aren’t you glad we got the “oxy” in there?
It struck us as an interesting question to prove out – is it worth burning fuel to save money on fuel?
Here’s our calculation …
(click the image to enlarge)
We found the prices for our area gas stations at Gas Buddy, as shown in the picture above. Using MapQuest, we determined that it would be a 3-mile round-trip from the Bigg Studio to the closest gas station, which charged $3.85 per gallon. This was the second highest priced gas in our area on that day. That figures!
It’s an 8-mile round trip to the station with the cheapest gas – $3.66 gallon. Using our handy calculator (okay, we were able to calculate this in our head), we saw that we could save 19 cents per gallon by making the drive. That seems pretty significant.
But here’s the rub … our car only has a 17.4 gallon gas tank. So if our tank was bone dry when we arrived at the gas station (a feat we probably come close to more often than we would like to think), the most we could save is $3.31.
Suddenly it wasn’t as interesting for us. We often work from our house so we don’t really drive that much. But we have friends who drive a lot for work; they fill up their car as often as three times a week, so that would add up to over $500 for the year. Alright, it’s worth continuing.
In order to get the cheapest fuel, we would have to drive 5 more miles. How much does that cost? The best source we could think of for that is the Internal Revenue Service. They allow a deduction of 50.5 cents for every mile driven for business. Since we figured the IRS wasn’t in the business of being generous with deductions, we figured if anything this might be a little on the low side.
So we multiplied the 5 miles by the 50.5 cent cost per mile. It would cost us $2.53 to drive to the station to get the cheapest gas, where we would save $3.31 if our tank was completely empty.
The most we could save by driving was 78 cents per fill-up.
Even for our friends who fill up three times a week, this only translates into about $120 per year. It hardly seems worth it when you consider …
We’ve assumed that our time isn’t worth anything. Because it’s going to take more time to drive out of our way for the cheaper gas.
(Side note: Unless our tank was less than ¼ full, it would actually cost us money to get the cheaper fuel.)
So here’s what we concluded:
Driving to find the cheapest gas doesn’t really work for us. It might work for you, especially if you have a bigger gas tank. You can use the process we’ve mapped out to run your own numbers. But don’t forget to place some value on your time!
However, in general, it’s probably a waste of time and money to drive out of your way for gas, unless you can …
Combine that trip with other deals
It just so happens that the gas station with the cheapest price in our area is in a retail zone. It may be the same for you. So if that area offers the best deals on the staples you need, and you combine that with coupons like the woman who feeds her family of five for as little as $10 a week, and fill up with the cheapest gas in your area while you’re there, paid for by your ramped up rewards credit card that you’ll pay off every month, now you have something going for you!
Here’s one more thought on buying fuel. It’s a very simple one, but we recently got burned by NOT doing this. What does that say about us?
We pulled off the highway not long ago to fuel up. We turned right as we exited the off-ramp and turned right into the first gas station just off the highway. As we were filling up, we noticed the sign that showed the prices of gas.
Then we noticed the sign at the gas station across the road. We could have bought gas for 20 cents a gallon less … had we just made a left turn!
(Image by hugoslv)