Does driving farther to find cheaper gas make sense?
Saving Pennies or Dollars is a new semi-regular series on The Simple Dollar, inspired by a concerning frugal tactics that might not really save that much money. I鈥檓 going to take some of the scenarios described by the readers there and try to break down the numbers to see if the savings is really worth the time invested.
Darrin said, Driving around town looking for the cheapest gas prices for the day. Yes there are apps and web sites that tell you all that, but I don鈥檛 think about filling the car when I鈥檓 in front of my computer. I found a gas station that is usually a couple cents above the lowest prices, but it鈥檚 on my route to work so I stick to it now and have more time.
Let鈥檚 say, for instance, that you are driving a car that needs ten gallons in it and you only save $0.05 per gallon by driving around. That鈥檚 $0.50 in savings. If you鈥檙e driving a truck that needs eighteen gallons and you find a place that saves you $0.10 per gallon, that鈥檚 $1.80 in savings.
No matter what you do to save gas, you鈥檙e talking about a small amount per fill-up. If you drive around looking for cheaper gas, not only are you spending time doing this, but you鈥檙e burning gas in the process.
In my opinion, driving more than a few blocks for cheaper gas isn鈥檛 worth it. Even if you鈥檙e saving $1.80 in the optimum situation above, you鈥檙e still burning a bit of gas to get there and a bit of time to drive that extra distance. If you go further than that, your money saved continues to drop and your time spent continues to grow.
There鈥檚 also the factor that sites and tools that give you updated gas prices aren鈥檛 perfect. More than a few times, I鈥檝e discovered the hard way that the prices listed in these tools isn鈥檛 accurate. Someone has uploaded bogus data as a prank or as a simple user error or the tool is outdated. When these sites work, they work; when they don鈥檛, they don鈥檛.
Instead, I use a completely different approach for gas. I invest some time up front figuring out which local station(s) consistently have the cheapest price on gas, then I use that station (or stations) as my primary place for filling up. Here鈥檚 what I do.
I monitor the gas price comparison sites for a week or two to see which stations in my area have the cheapest gas. This is really the backbone of my plan. If you鈥檙e in an area where prices are updated frequently, you can easily get a sense of which stations are consistently the lowest by watching such comparison data.
I also look for stations that have special deals in addition to the normal gas price. For example, the local Sam鈥檚 Club offers discounted gas to members and the local Hy-Vee Gas offers a discount if you bring in a recent receipt from a nearby Hy-Vee grocery store. Other gas stations offer tremendous discounts if you use their credit card.
Once I have this information in hand, I figure out which gas station is consistently the lowest (or tied for the lowest) in terms of gas prices. Usually, this is pretty straightforward once you know some of the offers available at the gas stations and what their regular prices are.
The winning gas station simply becomes my regular gas station. I use it for all of my gas purchases for a while until I get a sense that perhaps I should recalculate
While this process doesn鈥檛 guarantee me the lowest gas price at each fillup, it does ensure that I have one of the lowest gas prices around at every fillup. Even better, I鈥檓 not driving around to find this bargain. It鈥檚 usually a station along my regular route for groceries or other goods.
To put it simply, driving around looking for the cheapest gas saves pennies (at best), while figuring out your cheapest gas station in advance then using it regularly saves dollars over the long haul.
