Gas is one area of your household budget you may think you have little control over.
Thankfully, that’s not the case. If you’re looking for ways to cut costs, a few adjustments to your refueling habits can lead to significant savings.
Patrick DeHaan, Senior Petroleum Analyst at GasBuddy.com, weighed in to share savings tips and to dispel some myths about fuel that can help you reduce the amount you spend at gas stations each month.
1. Don’t wait until you’re desperate for gas to fill up.
You’re probably missing out on savings if your gas routine consists of rushing to fill up at the first station you find whenever your tank is close to “E.”
Having a game plan is the key to saving at the pump.
According to DeHaan, shopping for the most affordable gas ahead of time is the savings strategy that will keep the most money in your wallet (and not sunk in your gas tank).
“Just like you check prices at Best Buy and multiple stores before making electronic purchases, you should comparison shop for gas,” DeHaan recommends. “Shopping religiously for gas each time you fill up can save you hundreds for the year.”
Comparison shopping is essential in expensive markets like New York City and Southern California, where gas prices can vary by a wide margin from station to station.
In some areas, you may be able to save a huge 20 cents to $1 per gallon just by seeking out gas stations with competitive prices.
Use gas comparison sites like GasBuddy.com to find savings when commuting or traveling long distances.
2. Use cash to score discounts.
Some gas stations give customers a 5 to 10 cent per gallon discount for using cash to pay, so keep some bills on hand to score these deals.
Also, be highly vigilant of all gas station signs to avoid getting duped when paying with a card.
It’s not uncommon for gas stations to have a big marquee showing the cash discounted price and a much smaller sign showing a higher price for credit card payments.
3. Get a great gas credit card.
Although paying with cash has its perks, paying with a gas rewards credit card can save you money as well.
Some of the credit cards that give the highest rewards on gas spending include:
● Fort Knox Credit Union Visa Platinum: 5% back on gas
● PenFed Platinum Rewards Visa Signature: 4.25% back on gas
● InFirst Credit Union Visa Rewards: 4% back on gas
These three cards happen to be from credit unions, but they are credit unions that anyone can sign up for. Learn how to sign up for these credit unions here.
Word of Warning: Make sure to read credit card rewards program terms thoroughly to confirm that the type of gas stations where you plan to fill up qualify for points or cash back.
Some gas rewards programs exclude gas purchases at wholesale clubs. This is a variable to consider if you plan to take advantage of our next tip, which is buying cheap gas at membership clubs.
4. Shop for gas at wholesale clubs despite the membership fee.
According to DeHaan, membership clubs like BJ’s, Costco, and Sam’s Club tend to offer a very small markup on gas to get consumers into the main store.
Of course, memberships to these clubs aren’t free, and you need to factor fees into the savings.
Here’s how much these three membership clubs currently cost annually to give you an idea:
● BJ’s membership - $50
● Costco membership - $55
● Sam’s Club membership - $45
Despite the cost, filling up at a club for a majority of the year can still save you money on gas.
Here’s an example:
Say you have a 12-gallon car and you save 20 cents per gallon when you fill up at Sam’s Club instead of a competitor.
In total, you can save up to $2.40 (12 gallons x 20 cents) per refill. This means you can recoup the cost of the $45 annual membership in less than 20 refills.
5. Avoid name brand gas stations.
Big oil companies like BP, Exxon, Shell, and Chevron have what the industry calls “branded” gas stations.
“These major brand gas stations may charge a few cents more for gas than other independent gas stations,” DeHaan explains.
The non-branded, independent gas stations are the smaller stations and convenience stores. Seek out these types of gas stations for savings.
Examples of some popular regional convenience stores with affordable gas are Wawa, Sheets, and QuikTrip.
6. Don’t buy premium gas just for kicks.
The final area for savings is in choosing the right gas grade. According to DeHaan, there’s no need to put premium in your car if it’s not required.
You may notice that gas companies will promote premium lines of gas grades as high performance to convince you into making the upgrade.
The truth is, using premium when your car only needs regular gas is flushing your money down the toilet. Since there’s no benefit to the gas upgrade, stick with the more affordable basic gas option. It will get the job done.
Magnify Money is a price comparison and financial education website, founded by former bankers who use their knowledge of how the system works to help you save money.