This is a guest post reader Anirudda Gore, who is a 20-something software professional who writes about getting the best value for money at LetsBeCurious.blogspot.com.
I reached my nearest gas station this morning and found $2.63 per gallon, not the cheapest price but it was the closest station. Because I had to get to work on time, I bought that costly gas. Since then I’ve been thinking:
- If the cheapest gas is not available at my nearest gas station, how far should I drive for a better price?
- Is a difference in 5 cents per gallon worth burning the fuel and time?
I created a formula to decide whether you should drive to a far away station to fill-up OR whether it makes sense to buy expensive gas at a nearby station.
When To Drive That “Extra Mile”?
There are two elements behind my motivation to drive to buy cheaper gas:
- Save money on gas
- I can buy more gas at a cheaper price, which means I will get more miles from that tank
Let’s calculate how much more “extra” distance you will travel if you buy cheap gas:
Your monthly/weekly fuel expenses = FE (constant)
Gas Price at the cheaper but far-away station = Pc
Gas Price at the expensive but nearby station = PE
Distance between the two stations = DIST
Your car’s average Miles Per Gallon = MPG
c = cheaper, E = expensive, v = volume
Volume of gas bought in gallons = Total money spent/Price of gas per gallon
Thus, the volume of gas bought at cheaper far-away station, VC = FE/Pc
Volume of gas bought at expensive nearby station: VE = FE/PE
Extra gas you would buy at cheaper gas station: VC - VE = FE/Pc- FE/PE = FE (1/Pc – 1/PE)
Extra miles you can drive if you buy at cheaper gas station:
ExtraMiles = Extra Gas * MPG
ExtraMiles = FE * Difference in Gas Prices at two stations * MPG / Pc*PE
Here’s How To Decide
Plug-in your values in formula above and calculate ExtraMiles.
- if ExtraMiles > DIST: you drive more miles while spending the same amount so consider driving to a cheaper station
- if ExtraMiles < or = DIST: it makes more sense to buy gas at the nearest station, even if more expensive
Application of formula: Case #1
FE = $30
Pc = $2.59 per gallon (3 miles from my apartment)
PE = $2.65 per gallon (1 mile from my apartment)
DIST = 2 miles
MPG = 25 miles per gallon
ExtraMiles = FE * Difference in Gas Prices at two stations * MPG / Pc*PE
= 30*0.05*25/(2.59*2.65) miles
= 5.46368 miles
I get to drive (5.46368 – 2 =) 3.46368 miles extra (one way to my work), thus I will certainly drive away to get that cheaper fuel.
Application of formula: Case #2
FE = $30
Pc = $2.55 per gallon (12 miles from my apartment)
PE = $2.65 per gallon (1 mile from my apartment)
DIST = 11 miles
ExtraMiles = FE * Difference in Gas Prices at two stations * MPG / Pc*PE
= 30*0.10*25/(2.55*2.65) miles
= 11.09878 miles
I only get to drive (11.09878 – 11 =) 0.09878 miles extra; definitely not a go-for option.
Conclusion
“The cheaper, the better” should not be the rule here. Cheaper gas costs $2.59 in Case #1 which is available 2 miles from my home while cheaper gas costs $2.55 but I need to (burn more fuel and) drive 12 miles from my home. Total money spent is $30 in both cases but gas purchased in Case #1 lets you drive (3.46368/0.09878=) 35 times more than that purchased in Case #2.
So the next time you plan to fill-up your car tanks, remember it’s not just how many dollars you save but also how many miles you drive to get that gas. The formula takes into consideration both these factors and thus gives practically guided numbers. Once you decide how much money you want to spend on gas this week/month, now just calculate the ExtraMiles and go from there.
Bargain Babe’s two cents: I like the concept of ExtraMiles, but think it is important to take into account time spent filling up and actual savings. How many people spend the same amount on gas each month? Not me. But I’m curious, what do you think of the ExtraMile approach?
Saving at the pump comes down to two things: getting the best price and driving less. With the start of summer driving season I thought I’d share tips to do both, starting with getting the lowest gas price.
- Check the AAA Fuel Gauge Report to monitor trends. The site lists the average gas price for today, yesterday, a week ago, a month ago and a year ago. You can look at prices nationwide, by state or major metro region. Data comes from 100,000 gas stations.
- Search MSN’s gas map for the best prices near your home or on your route. A green marker tags the lowest price, a red marker notes the highest. You can zoom in or search by state, city, and zip code.
- An alternative to the MSN map is GasBuddy.com, which lists gas prices that have been spotted and entered into the site by users. Search for prices by location, grade of gas, or brand.
Tips to conserve gas (no silver bullet here, folks):
- Carpool, take public transit, or telecommute to work
- Drive sensibly (read: slowly). Speeding can increase gas costs by 40 percent!
- Ride your bike whenever you can, it’ll save you money and get you in shape
- Select the highest mpg vehicle available to you (in my neighborhood a few folks have converted golf carts!)
- Consider buying a hybrid, scooter/motorcycle, or other high mpg vehicle
Some people swear by additives, but I’ve never seen any hard evidence. Do you put anything extra in your gas tank?
To entertain myself on the long drive from my Mom’s house in the Bay Area to my home in LA I conducted a science experiment. How much more efficient was my 2003 MINI Cooper at various speeds and how much money did that translate into?
Step 1. Measure the average miles per gallon (a statistic my car tracks) at six different speeds for a distance of two miles. Repeat twice so there are three sets of data for each speed (see chart below).
Step 2. Average the miles per gallon at each speed.
Step 3. Extrapolate the cost of the trip per mile at each of the six speeds based on the average miles per gallon for that speed. I paid $2.63 a gallon when I filled up before driving home so this is the price I used. The formula looks like this:
1 mile x 1 /ave. miles per gallon x $2.63/1 gallon of gas =
Driving one mile at 85 mph costs $.095.
Driving one mile at 80 mph costs $.085.
Driving one mile at 75 mph costs $.086.
Driving one mile at 70 mph costs $.075.
Driving one mile at 65 mph costs $.068.
Driving one mile at 60 mph costs $.068.
Step 3 raised a few questions, namely why the cost of driving at 75 mph was slightly higher than driving at 80? And is my car really as efficient when I drive at 65 mph as when I drive at 60 mph? More testing is needed to answer these questions.
Step 4. Determine the time it takes to drive one mile at each speed. The formula looks like this:
1 mile x 1 /miles per hour x 60 minutes / 1 hour x 60 seconds / 1 minute =
At 85 mph one miles takes 42 seconds.
At 80 mph one miles takes 45 seconds.
At 75 mph one miles takes 48 seconds.
At 70 mph one miles takes 51 seconds.
At 65 mph one miles takes 55 seconds.
At 60 mph one miles takes 60 seconds. (This is also the speed at which trucks will pass you en masse.)
Step 5. Compare gas costs with time savings.
Driving at 85 mph costs $.027 more per mile than driving at 65 mph but saves you 13 seconds.
For a 30 mile commute, this adds up to $.81 more at a savings of 6 minutes and 30 seconds.
For a 400 mile road trip, this adds up to $10.80 more in gas but cuts one hour and 27 minutes off the trip.
For a driver who puts 10,000 miles on their car each year, driving at 85 mph costs an extra $270 but saves 36 hours.
Conclusion: The cost of driving fast – at 85 mph instead of 65 mph – is roughly $.03 more per mile, or about 40 percent more. The actual difference, $.027, looks small but adds up quickly. Slow down and drive at 65 mph, which is the speed limit on California state highways (with a few exceptions), and you will save roughly 30 percent.
During the tests the terrain was mostly flat and wind was minimal. I collected data while driving but did the calculations in the safety of my non-motorized home.
Questions. What are the indirect costs of driving fast or of driving slow? Did you cause an accident or get a ticket for driving at 85? If you slowed down to 60, did other drivers honk at you? I noticed my car was so much quieter at 60!
It is still a good time to get a deal on a car. Consumer anxiety pushed car sales of six major brands down 36 to 45 percent in March, which means sellers are wheeling and dealing to move inventory. If you are considering buying a car, here are some resources.
Kelly Blue Book and Edmunds are the gold standard for checking the going rate of new and used cars.
CarBuyingTips.com has a slew of resources, including how to negotiate thousands of dollars off the price of a new car, dealership ratings, and getting pre-approved for an auto loan.
CarsDirect.com has a searchable database of incentives dealers are offering, including four for college graduates.
Bankrate.com has a calculator that compares the financial benefit of a rebate v. a low-cost loan
Cars.com has a green buying guide that covers hybrids, cars that run on ethanol, diesel engines and high-mileage cars.
10 confessions of a car salesman is the story of a reporter who goes undercover for Edmunds.
CNN Money has 10 things to do before you start your research.
