Motley Fool - Fri May 31, 11:30AM CDT
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I'm about to go on a long road trip up the East Coast, and I've got my eye on rising summer gas prices. The national average for a gallon of gas is $3.70 right now, up 15% from the beginning of this year.
I've got a Costco membership, and one of the perks is discounted gas, which can be much cheaper than the national average. If you take advantage of the discount, here's how much you stand to save annually.
You could save $146 annually in fuel costs
Gas prices usually go up during the summer, and their recent rise means that this summer will likely be no different.
The average American uses about 489 gallons of gas annually per vehicle. If we multiply this by the current price of $3.70 per gallon, it works out to about $1,809 annually. Of course, gas prices fluctuate, but let's compare them with Costco's prices to see how much you could save.
Costco gas prices are about $0.30 cheaper than the average gas station. That seemed high to me, so I compared the prices of my local gas station one block from my home to my nearest Costco and was shocked at what I found. The local station charges $3.29 per gallon, while Costco's price is $2.88 -- $0.41 cheaper per gallon!
But even if we use the $0.30 cheaper assumption, Costco gas could potentially save you more than $146 annually when buying 489 gallons per year. This more than covers the cost of two annual Costco memberships!
Summer budgets are flying out the car window
I have to admit that I usually overspend in the summer. Between beach trips, baseball games, day trips, and eating out, it's easy to go over budget.
I'm not alone in this, either. A recent MassMutual survey shows that one-quarter of Americans think they'll spend more this summer than last summer.
Will saving money on gas completely fix your summer budget? Probably not. But it will help lower your costs. And, even more importantly, you could save a ton of money on other purchases with your Costco membership, too.
Recent data shows that Costco members can save over $1,000 annually when buying commonly purchased items at the discount warehouse club instead of conventional grocery stores. Add that amount to your potential gas savings, and you'll be well on your way to cutting $1,146 out of your annual budget.
One more way to save on gas
If you don't buy gas at Costco frequently, you can still save money on your fill-ups by using a gas credit card.
Many of these cards have cash back rewards of 2% to 6%, and some even come with a welcome bonus. Not only can you save money on gas, but many also offer cash back on groceries.
Just keep in mind that most of these cards won't earn rewards when buying gas at Costco.
Whether you go to Costco to save money on gas, use a gas credit card, or both, consider how much you're spending at the pump, especially during the summer. I'll fill up at Costco before my road trip in a few weeks and offset some of the higher gas prices this summer by finding cheaper gas stations around town.
Top credit card to use at Costco (and everywhere else!)
If you’re shopping with a debit card, you could be missing out on hundreds or even thousands of dollars each year. These versatile credit cards offer huge rewards everywhere, including Costco, and are rated the best cards of 2024 by our experts because they offer hefty sign-up bonuses and outstanding cash rewards. Plus, you’ll save on credit card interest because all of these recommendations include a competitive 0% interest period.
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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
