Thursday, May 31, 2007

How far should you drive to buy gas?

The short answer? Not very far.

With the price of a gallon of gasoline reaching an all time high recently, a lot of people are using online services like to find the cheapest price in their area. The question is, how far out of your way should you drive to save a few cents per gallon? Figuring this out is really quite simple, considering there are only a few variables involved.

For starters, let's consider how many gallons of gas you actually buy when you go to the pump. Typically, I buy around twelve gallons in my economy-sized car. (This may seem quite low to those of you driving SUVs, but if you're driving one of those gas-guzzlers you probably stopped reading this already.) If I can drive across town to save $0.10 per gallon, I'm only saving $1.20. Considering that the distance across town is about 10 miles, my car gets about 30 miles per gallon, and a gallon of gas is hovering around $3.40 per gallon, I'm really not saving anything at all. Once you factor in the time it takes to drive across town and back, It's really not worth the effort.

So, here are the two formulas you need. One is used to calculate your savings and the other is used to calculate your cost.

Savings = (Regular Price/gallon - Discount Price/gallon) * gallons purchased

Cost = Discount Price/gallon * (miles travelled / MPG)

where MPG is your car's estimated fuel efficiency (miles per gallon).

After you use these two formulas subtract the Cost from the Savings. If the difference isn't negative this is your real savings. You decide if this amount is worth your time.

My advice? Fill up on the way to work. Driving even a mile or two out of your way to save pennies per gallon isn't worth your time or effort.

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