As inflation continues to wreak havoc on household budgets, people are looking to save money wherever they can. For example, I know people who will drive five miles out of their way, ten miles round trip, just to save a nickel per gallon. Then there are those who are so passionate about saving money on gas that they’ll happily drive even farther out of their way.
On the other hand, I never worry about saving a few cents at the pump.
When I need gasoline, I usually just pull in to the first gas station I see. That is because driving out of your way to save a few cents doesn’t make much sense. Why? Because in most cases the savings at the pump are eaten up while driving around to get that bargain.
Once again, I will use my trusty spreadsheet to illustrate my point. The results are shown in the two tables below:
(Click to enlarge)
For example, let’s assume you drive 10 miles out of your way (round trip) to save four cents per gallon at a cheaper gas station. Let’s also assume you buy 12 gallons worth of gas. Looking at the top chart, we can see that you saved 48 cents.
Now let’s assume you are fortunate enough to find a place that was charging $3.00 per gallon of gas. Looking at the bottom chart, which assumes the car averages 20 miles per gallon, we can see that you spent $1.50 driving to the station with the lower gas price. So in reality you lost $1.02 ($1.50 – 48 cents) in your quest to save four cents per gallon!
Your loss would be even greater if the price of gas was higher, or you drove even farther, or your car got less than 20 mpg.
For this example, even if you only drove five miles round trip and the price of gas was only $2.50 per gallon, you’d still lose 15 cents (63 cents – 48 cents).
When shopping around to save money on gas, you should naturally expect any savings at all to become less as:
- The price of gasoline rises
- The amount of gas you put in your tank decreases
- The miles you drive to realize the “savings” increase
- The average vehicle miles-per-gallon (MPG) decreases
So next time you’re driving around and your tank is running on empty, don’t fret about finding the cheapest price. Unless the competing gas stations are relatively close to each other, the odds are you won’t save much money anyway.
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Gas prices these days are just getting higher, i think the government should focus more on alternative energy.
Wait … governments have been focusing on “green” energy and doing their best to phase out so-called fossil fuels! Which is why energy prices for everything from gasoline to natural gas and electricity are skyrocketing around the world.
The reality is, when it comes to energy “bang for the buck,” nothing beats fossil fuels. It’s time governments around the world realize that and stop demonizing the fossil fuel industry.
When filling up a large empty tank those few cents can add up, you really need to figure it out if it’s really worth the drive for your car. Like you said, it’s all in the math. Another thing, I’ve noticed that often cheaper stations are VERY busy. For example; Costco where there always seems to be a long line of compact cars waiting 30 minutes to save 30 cents.
And if those waiting are idling their cars, they are using up a significant portion of the savings they think they are getting.
We don’t drive around looking for a cheaper place to buy gas, but we do try to time our purchase as prices go up at the weekends and especially long weekends.
You’re totally right – people need to weigh the distance TO the cheaper station against their savings.
That said, there are several free smartphone apps that find your GPS coordinates, scan the cost of gas at all the stations nearby, and then show you a list of both cost and distance.
Using this, you can see if there is a gas station within a similar distance that are cheaper.
Alternatively, if you’re taking a road trip down the interstate, you can check gas prices 10, 20, 30 miles down the road to see if you should fill up now or later.
Hi
Interesting.
Here in South Africa – where I live – petrol prices are fixed inland and at the coast. So, one needs to drive really far for a cheaper price!
Juliet
We have a little neighborhood gas station that usually runs a nickel to seven cents more than everyone else. There is hardly a time there are more than two cars being filled up at any given time, including ours, so it is always a quick easy-in-easy-out. The older we get saving a nickel here or there has to be weighed against the time spent looking for the bargain. 🙂
There is a gas station near me at $3.83 per gallon vs $4.00 pretty much everywhere else.
So for me, I save 17 cents per gallon if I drive a little further out to get to that gas station.
I think that’s worth it.
I found a Co-op that does save money on fuel and I can purchase from any retailer in North America ..sound interesting?
I built a site explaining it .. they are currently only taking membership apps from Canada and the USA.
That’s why I bought myself a used Tesla. Farewell to gas prices))
In my neck of the woods the price differential is up to 30 cents between stations. While I don’t drive out of my way to save I do check the Gas Buddy app to see if I should stop near home, the office or the small town where I shop. I’m absolutely willing to save the $4 on a tank because it’s not going out of the way.
That is definitely the key, Andrea; if the gas station is on the way then there is no penalty whatsoever!
You know, I figure my time spent having to drive to that further away gas station, to get that nickel a gallon cheaper gas, negates any savings that I might get. Time is money.
In economics this would be called opportunity cost. It’s the same as those people waiting 4 hours in line to save $30 on a gadget. That time can be better spent elsewhere.
You’re absolutely right that driving any kind of distance can negate your savings. For me, I make a mental note of which of the stations I regularly pass have lower prices than the others, and I normally fill up there. The difference can easily be twenty cents per gallon or more in my area. I think there’s a happy medium between driving out of your way to save a nickel, and pulling over at whatever station is there when you hit empty.
I know which gas stations have lower prices so whenever I see one, I go for it. I wouldn’t want to go further until I come across for better prices.
We drive in the same areas most of the time. Certain gas stations are always cheaper than others. We plan ahead to pick up gas when we are passing the cheapest stations. We never drive any distance to fill up on the cheaper gas, we do so when we are passing stations we know offer the best price. I like saving cents per gallon by not paying for a station’s participation in national advertising campaigns. I like to vote with my dollars encouraging the cheaper stations. Also most stations give a price break for cash and charge more for credit purchases, so we always pay cash. Stations which advertise “same price cash or credit” have invariably raised the price of cash paid gas to the higher price of credit paid gas. In financial life, you have to be frequently running time / cost benefit analysis in your head to get the best value for your money. Don’t look at that as a burden, see it as a challenge which you can win!
I have a few favorite gas stations – around here the price can vary by 25 cents a gallon – I honestly don’t know how the higher priced stations survive, unless it’s just location, right off the freeway, at the first/last exit before a long stretch.
Anyway, there’s a station on the way to work and one near home that are about 5 cents higher than the cheapest, but 20-25 cents cheaper than the most expensive. I go to which ever one is closest when I realize I’m almost out of gas.
So glad we measure gallons to 3 decimal places. My local station offers reward stickers for fuel purchases. I use those to buy that soda that is approaching $10 a gallon. Lol. I learned long ago to avoid pushing it until empty. I always fill up before dropping below 1/4 tank. Just in case the power is out, the pumps broken,or no fuel truck until tomorrow. Plan ahead folks.
I’m like you, CO2. I always keep more than 1/4 tank. In fact, unless I am driving long distances, once my tank gets below half, I am usually filling up at next opportunity.
I got gas last month for $1.98 a gallon. I bought 20 gallons. I used $1 a gallon in rewards. Yes, gas is cheaper here. I live 40 minutes from one of the nations largest refining centers. There are 4 refineries nearby.
I think I shall use the savings to buy Len a fruitcake.
For a few cents yes, as the article states. Here is another scenario. I have seen a difference of 50 cents to $1 in stations a few miles from each other and not far from my home. 50 cents for gas and as much as $1 for diesel. At $1 per gallon, my truck takes 30 gallons of diesel… so in these situations, it makes sense and even at 50 cents as long as once is not going out of their way. Truck around town is 13mpg. Used to be 16mpg until we started going with 20% biodiesel but that is another topic.
Nice to hear from you, Ramon! And I completely agree with you. Hope all is well with you and the fam.