If You Drive To The Station With The Cheapest Gas Will You End Up Saving Or Losing Money When You

Is it sensible to drive to a further gas station just to save a couple of pennies per gallon? Will it really make enough of a difference in the long run?

It depends on (i) how much farther it is, (ii) the price of gasoline, (iii) the mileage your car gets, and (iv) how large (or empty) your tank is, as well as (v) extraneous factors like the age of your car (which affects how much depreciation it undergoes for each extra mile you drive).First, calculate the cost of driving the extra miles to the station. Let’s say that you add 10 miles to your trip (to pick a round number) to get to the cheaper station. Then you need to save as much as it costs you to drive those 10 extra miles. Suppose that gas is $2/gallon (to pick another round number) and your vehicle gets 20 mpg. Then you spend an extra $1 (10/20 x $2) on gasoline to drive those extra miles, so you need to save $1. If the cheaper station is 5 cents/gal. less, you’d have to put in 20 gallons to break even. I hope your tank holds that much.If your car gets better than 20 mpg./gal., you can afford to drive farther to get to the cheaper station. If the cheaper station is more than 5c less, you can afford to drive farther. In addition, the older your car is, the less it is depreciating as you drive those extra miles, so again, you can afford to drive farther to the cheaper station. But in any case, your tank should be pretty empty, or you will probably lose.

Why is Costco gas so much cheaper than regular gas stations? Do they sell it at a loss?

The answer from Alex Barrett answered the question from the Costco side, but having once been a fuel tanker driver responsible for some deliveries to a couple Costco stores, I can add a bit more than he may have been aware of.At least the Costcos where I made deliveries had a much larger underground storage tank (UST) capacity than anywhere else I ever went. The highest gasoline UST capacity I ever saw outside of a Costco was a single 30,000 US gallon tank, and even this was unusual; more common is one or maybe two 10,000-gallon tanks. Costco, on the other hand, at least doubled this — the Costco in Toledo, OH had five 12,000-gallon tanks for a total storage of 60,000 gallons of gasoline. Such a huge storage capacity allows more flexibility to play the market and make purchases at the lowest possible spot price. (FWIW, the busiest non-Costco stations I ever remember doing would sell 15K per day, just to give you some idea of how long 60K can hold out.)Also, I would add that most of the times I delivered to a Costco, I was not alone. Often, I would show up and be the third fuel truck waiting in line for my turn to unload. They tried to stay near-full most of the time unless spot market conditions made it impossible to do so profitably.TL;DR There isn’t much profit in gasoline retailing anywhere, Costco or otherwise, but Costco made up for razor-thin margins by doing huge volume.

Is it worth it to find a gas station with a gallon a few cents cheaper?

Sometimes not.Assuming a normal auto, you may buy 15 gallons at a time to fill up.If you save 3 cents a gallon at the alternate station you are saving less than 50 cents.Driving a car, by US IRS estimates costs about 50 cents a mile taking into account car depreciation, wear, and insurance an amortized service and all other costs. Strictly by additional gasoline use only, the costs a mile of driving might be about a nickle or twoYour time is another cost. If you make $7 an hour then your time is worth 12 cents per minute, If you make $15 an hour then your time is worth 24 cents per minute and if you are an engineering consultant then your time might easily be worth $1.60 a minute.So we have driving costs of 5 to 50 cents per mile and time costs of 12 cents to $1.60 per minute.Given that I would say that starting at around a half a mile to a couple of miles out of your way, and more than 1–3 minutes of time to save a few cents is NOT worth it.I’ve seen gas price differentials as much as 10–15 cents. Once you get that high, its worth a a buck or two to be picky. If you can, don’t drive until you are real low on fuel, and then you can bypass the station that’s high and go on to the next one that’s on your route and not out of the way.

How does anyone, no matter the economic status, justify spending 20 to 30 minutes in line to fill up your tank at Costco? Even earning minimum wage, you are losing what money might’ve been saved getting gas more quickly somewhere else.

It’s probably true that it is a false economy to spend so much time for a cheaper price on fuel. Except —The question presumes that were the person not waiting in line, they could be working and earning pay, “even minimum wage,” when it’s more likely they do not have that opportunity at that time.Costco can save up to $0.30 a gallon. That’s $4.80 on a 16 gallon tank. If you go through a tank of gas a week, that almost $250 a year. If you drive more than that, the savings increase. That’s money that could go towards oil changes or new tires.When you are among the “working poor,” literally every cent makes a difference. I can remember looking for dented cans when grocery shopping, and then getting a discount from the manager. Saving tea bags and re-using two at a time to get an extra cup of tea from them. Keeping the heat at 63F in the winter. All because otherwise I would not be able to make the rent.You do what you can, and most of the time, you end up exhausted and without a dime in your pocket at the end of the week. I would suggest a couple of things for Costco gas buyers — one is to check different times to see when lines are shortest. The other? Make sure to turn off your engine while you wait.

How do you save money at the gas pump?

There are a number of ways to save money on gasoline. Here are 3 tips for saving at the gas pump itself:1. Time of daySome people say to fill up in the morning before the warmth of the sun heats and expands the gas. But a study by Consumer Reports found that the double-walled underground tanks keep the gas at a steady temperature. The first few gallons pumped are warmer regardless of the time of day. They found that one might save a few cents on the first few gallons pumped by filling up before it gets hot.Consumer Reports did say that the gas will be hotter in the hours after a new tank of gas is delivered to the gas station, regardless of the time of day. So avoid filling up after a new delivery.Of note, many gas stations raise their prices at around 10:00 am (especially on Thursdays in preparation for weekend travel). Which explains why you may see prices higher on your way home than they were when you were driving into work. So if you need gas on a Thursday it may be best to fill up in the morning.2. Day of the weekA GasBuddy study from January to March 2018 found gas prices are generally least expensive on Mondays, followed by Sundays.The most expensive days to fill up are Fridays, followed by Thursdays.3. Filling your tankAvoid over-filling. Once the tank shuts off, don't keep filling to "top off."Make sure the gas cap is properly sealed to minimize gas evaporating.Filling up when your gas tank is no more than half-empty might help save a few cents per fill-up due to less evaporation.

How does Costco keep its gasoline so cheap?

One thing to understand is how the gas station industry works. The gas you get at Costco is the same gas you get at the Chevron, Shell, Valero, or other gas stations. The same truck will actually, in some cases, deliver fuel to Costco and then go to a Chevron/Shell/Valero/etc and deliver fuel there. The only difference is the additive they add to the gas at each station. The amount of additive is minimal, maybe 50 gallons per thousand of gas. Thus the gas you buy at Costco is exactly the same as at a brand name gas station excluding a 1-5% additive difference, and in most cases 1-2%. However the brand name stores must pay licensing and royalty fees to the brand name they operate under. Also the brand name stores must also purchase a certain % of gas from refineries owned by the brand name. By comparison, Costco only orders from them if they're the cheapest refinery.This is why you almost never see brand name unattended stations. Branded stores make their money on the $1.99 overpriced bottle of coke, not from the gas. Even unattended, a branded station costs much more to operate than a Costco fuel station.It also helps that Costco doesn't take all credit cards, and thus save millions in card processing fees.