A topic that sometimes comes up in my financial literacy class, as well as other financial discussions, is people who will drive across town to a gas station with cheaper gas prices. I want to be clear, if you have multiple gas stations on your regular route and one has lower prices, then you should definitely get your gas there. Even if there’s a gas station that’s just slightly out of your way but is significantly cheaper then, sure, drive and fill up there. If it’s across town, well, you have to do the math to see if the price difference is covering the cost of driving there (and your time).
But the “problem” I’m referring to is people not taking the time to think about and identify the best strategies to save money on gas (and other things). While I’m sure there are many more, here are just a few things off of the top of my head that will likely save people more on gas than driving across town. (For all of the following I’ll use a price per gallon of gas of $3.50; obviously that varies over time and by location.)
- Inflate Your Tires: Keeping your tires inflated to the correct pressure can improve your gas mileage between 1 and 5% (saves you between 3¢ and 18¢ per gallon). Some gas stations/tire stores offer free air, or you can get a tire inflator for less than $30 (and even use it for things other than car tires). Even if you only do it once a month you’ll come out way ahead. And if you do it every time you get gas, it will be even better. (Heck, got a 10-year old or older, teach them how to do it. Even if you paid them a token amount each time you’d come out ahead.)
- Drive the Speed Limit: Many (most?) people tend to drive a bit over the speed limit, especially on the highway. Every 5 miles per hour you increase your speed over 50 mph is costing you 7 – 14% (24¢ to 49¢ per gallon). Aggressive driving at any speed (fast acceleration, etc.) adds even more.
- Extra Weight: Some (many?) folks carry around 50 to 100 pounds of extra “stuff” in their car because sometimes they need it and it’s more “convenient” to keep it there instead of unloading and loading it. An extra 100 pounds likely costs you at least 2% (7¢ a gallon).
- Roof Racks: A roof rack on your car decreases your mileage by 11 – 25% (39¢ – 88¢ per gallon). That’s likely worth it when you actually need the roof rack, but doesn’t mean you should leave it on your car all the time.
- Idling and Engine Warm Up: For every hour you idle it uses up between 0.2 and 0.5 gallons of gas (depending on the vehicle). This doesn’t really translate into cents per gallon, but that’s between $0.70 and $1.75 for each hour of idling.
- Driving Less/Combining Trips: This obviously varies tremendously based on the individual usage, but likely at least 5¢ per gallon for most people. Maybe even get an e-bike and cut out some car trips (or even own one less car for even greater savings). Or carpool if that works for you.
- Choose a Shorter Commute: Yes, this one might be more difficult for some folks, and you have to think of this one more in advance. But too many folks don’t think deeply enough about the length of their commute when they are choosing where to live and/or where to work. Sometimes you may not have much flexibility in that decision, but often you do, and too many people don’t factor in the cost of their commute (both in money and in time) when making this decision. The difference between a 5 mile one-way commute and a 25-mile one-way commute is 80% ($2.80 per gallon), plus the time, plus the increased maintenance costs (and earlier replacement of the vehicle costs).
- Use a Credit Card with Higher Cash Back for Gas: If you get a credit card that gives you 3% back on gas versus the typical 1%, that saves you 2% (7¢ per gallon). If you are currently using cash, a debit card, or a credit card with no cash back, then it’s about 11¢ per gallon in savings.
- Buying a More Fuel Efficient Car: The average fuel efficiency of cars sold in the United States is around 26 mpg. If you initially chose a car that got just 1 mpg more, that would save you about 4% (14¢ per gallon). If you’re driving a big truck that gets 18 mpg, 1 mpg would save you about 6% (21¢ per gallon). Now imagine you chose a vehicle that got 5 mpg more, or 10, or 20, or 100 (think EV).
- Drive an EV: It depends on both the cost of gas and the cost of electricity in your area, as well as whether you are comparing to a hybrid that gets 50 mpg or a truck that gets 15 mpg, but the cost for “fuel” for an EV is likely to be between 50% and 80% less expensive than the cost of gas ($1.75 – $2.80 per gallon).
When I have discussions like this, a typical response is something like, “But most people don’t think like this. They aren’t that rational.” This is definitely true, but my response is, “Yes, and…?” Shouldn’t we be able to help people think like this? I mean, none of these suggestions take an advanced degree to understand, right? (And, not for nothing, we have an entire education system devoted to helping people learn things they might not have though of on their own.)
While this post focused on gas prices, there are many similar conversations to be had (fees on investments, cost of dining out, subscriptions/streaming services, insurance choices, etc.). Again, I want to emphasize this is not meant to be “knowledge-shaming” or “spend-shaming”, it’s intended for folks to think a bit more carefully about their spending. The idea is to not only align your spending with your values and your goals, but also to be aware of some of the illogical choices we make that can be easily improved upon. If you’re willing to drive 15 minutes out of your way on a regular basis to save 4¢ a gallon on gas, shouldn’t you be willing to spend a little time thinking about these ideas?
Fisch Financial 