How to Save $800 or More Despite Higher Gas Prices
As global recessions and international conflicts make the price of oil more volatile, consumers are looking for ways to cut costs at the pump.
According to AAA, the average American drives 12,000 miles a year. For a family with two driving adults and cars that average 22.5 miles per gallon, the family will use 1,067 gallons of gas for the year, spending $3,830.53 annually (assuming an average price per gallon of $3.59).
Seek Out Discounts
Some stations have frequent buyer discounts, coupons or other discounts with the purchase of car washes, groceries or when you pay with cash.
Check to see which grocery stores in your neighborhood sell gas -- many times the money you will spend on groceries can help you save at the pump. Do your homework and crunch the numbers to find out which deals are the best based on your area.
For example, Kroger (NYSE: KR) grocery stores currently offer a fuel program that offers big savings at the pump. For every dollar you spend on groceries at Kroger, you earn one point towards the fuel discount program: earn 100 points and you get $0.10 off per gallon of fuel; 1,000 points saves you $1 per gallon for one fill-up. Other stores such as Sam's Club, Meijer, and Wal-Mart (NYSE: WMT) have similar discounts.
Annual Savings: $100 or more
Forget stockpiling airline miles on a rewards credit card (which are some of the least-efficient rewards you can get on a credit card) and look for savings at the pump.
[InvestingAnswers Feature: 5 Highest-Rewarding Credit Cards on the Market]
Some credit cards offer a 3% - 5% discount on all gas purchases regardless of where you fill up. Look beyond the credit cards offered by particular fuel companies for the most flexibility. The PenFed Visa Platinum Cashback Rewards Card gives 5% cash back when you pay for gas at the pump and it has no annual fee.
Using a gas credit card could save $1.50 to $2.50 every time you fill up. That can amount to a yearly savings of up to $192.52.
Annual Savings: $192.52
Find the Best Price
Fortunately for consumers, there are plenty of websites and smartphone apps that can help you get the best price on fuel.
These little changes can add up to big savings -- just make sure your efforts are worth it. You wouldn't want to drive 20 miles to save a few cents per gallon. Overall, these sites are a helpful resource for finding the cheapest gas in your neighborhood.
The lowest price on Gasbuddy.com in my area was $0.22 cheaper per gallon than the U.S. average, which amounts to a savings of $234.74 per year.
Annual Savings: $234.74
#-ad_banner_2-# Don't Buy Premium
If you currently buy premium gas, switch to regular gasoline instead. Few cars actually need premium, and even those cars won't be harmed by using regular.
Most car manufacturers suggest premium gas for the sake of horsepower, which is obviously not a necessity when times are tight.
AAA.com offers a fuel gauge report that lists the difference between gasoline grades at an average of $0.25. However, there are a number of instances where the difference is more, often times as much as a savings of $0.30.
Sticking with regular-grade gasoline could net you up to $300.10 per year.
Annual Savings: $300.10
The InvestingAnswer: We've all waited to fuel up only to cruise into the nearest station on fumes. The problem with this approach is that you are often so desperate to get fuel that you end up buying gas from the nearest station, regardless of price. To save the most money, it is essential to be deliberate and plan when and where you purchase gas.
Total Annual Savings: $827.36