fuel

Save Money On Gas: Avoid These 12 Gas Saving Myths

February 28, 2012 By Jeffrey Strain 6 Comments

With gas prices once again on the rise, more and more people will be looking for ways to save money on gas. In their pursuit to achieve this goal, they very well may end up hurting their pocket book. Many people assume that they are saving money on gas when they really aren’t. Here are some common gas saving myths that people still do to their detriment:

Trading in a Gas Guzzler for a Fuel Efficient Car

OK, this will save you gas, but it won’t necessarily save you any money. In fact, there is a good chance that while you are saving money on gas, you’ll lose money overall making this move. The issue is that when gas prices get high, everyone is looking to trade-in their gas guzzler for more fuel efficient transportation. The result is that those vehicles that guzzle gas get undervalued when traded in and fuel efficient cars go for a premium since there is so much demand (and there are some contrarians who actually buy SUVs during high gas prices to take advantage of this). Even though you are going to be saving money on gas, will you be saving the thousands of dollars loss it costs you to make the trade when you are only paying an extra $10 per tank? If you are driving a huge amount of miles each week, it might. For the average person, however, it probably won’t.

The best course of action is to actually run the numbers. Figure out how much of a loss you will take for trading in your gas guzzler and calculate how long it will take for the increased fuel efficiency to make it a good financial move. Now, if your gas guzzler is old and you have been thinking about getting a new car, most definitely opt for a more fuel efficient car.

Fill Up at the Cheapest Gas Station

With all the Internet sites and phone aps that track what gas is selling for, it’s now much easier to know which gas station in your area is selling gas for the least amount of money. The temptation is to drive to whatever gas station is selling gas for the least amount to get the best savings, but this can be false savings. Much like the person that drives around to different grocery stores to save a few cents, if you end up driving out of your way to save on gas, you are likely using any savings that you get from the less expensive gas for the cost of driving there.

If you drive 5 miles out of your way to save $0.10 a gallon and you place 10 gallons into the tank, you end up saving $1.00 over what you would have paid at a closer, more expensive gas station. A dollar is a dollar, but you also put an extra 10 miles (the the gas station and back) on your car. How much it actually costs to operate your car will vary from make and model, but the IRS allows anywhere from $0.14 per mile (for charity) to $0.55 per mile (business) for 2012. Even if you take the lowest rate, the cost of costs and depreciation to get you to the gas station was $0.40 more than you saved.

The lesson is that less expensive gas is not necessarily saving you money if you have to go out of your way to get it. The best course of action is to choose the least expensive gas on your regular route where you don’t have to deviate from where you were going to be going anyway.

Paying Cash for Gas Saves Money

Many gas stations offer a discount when purchasing gas when you pay cash instead of by credit card (usually around $0.10 a gallon). Then there are some gas stations where the gas prices tend to be lower like ARCO, but they don’t accept credit cards. Many people look at the lower gas prices for cash and think they are saving money by using cash, but the truth is that they are paying more than if they use a credit card that pays 5% back on gas purchases.

If gas is $4.00 a gallon and you put 10 gallons into your vehicle, you save $1.00 when paying cash rather than a credit card. The reason this isn’t any savings is that if you paid with a gas rewards credit card that pays 5% cash back, you save $2.00, or 100% more. Again, you need to do the calculations to see which is actually ends up costing you less, but most times you’ll save more by using a cash back credit card on gas than taking the cash price. With this in mind, you want to look for the least expensive gas station on your regular route that accepts credit cards.

Gas Saving Devices Work

When gas prices start to increase, people begin to look for any way to get better gas mileage. Inevitably, they hear about devices that are supposed to increase gas mileage by increasing the airflow to the engine which is supposed to improve the car’s fuel efficiency. Consumer Reports has tested a number of these devices to see if their claims are true, and not only did they not save gas, but they actually increased gas consumption along with wear on the engine.

If any of these devices really did work, independent organizations would have long ago come out and given them their blessing. None have. Spending $50 or more on these devices will take money out of your pocket while not helpiong your car’s fuel efficiency at all.

Gas Saving Additives Work

Much like the gas saving devices, there are a lot of gasoline additives that claim that they can increase the fuel efficiency of vehicles by as much as 25% and getting people to pay a lot to use them. The problem is that there is no verifiable studies that indicate that any of these work. In fact, the Federal Trade Commission has tested over 100 products that claim that they save gas and none has significantly improved gas mileage. As Consumer Reports notes, if any gas saving additive did increase gas mileage, there would be a huge rush by oil companies to market their new gas blend to gain a bigger share of the gasoline market.

Over Inflate Tire Pressure To Save Gas

The concept would seem sound. By over-inflating tires, the tires will have less friction against the road, which in turn means the engine doesn’t need to work as hard to keep the car’s wheels spinning. This should make over-inflated tires save a bit of money on gas compared to properly inflated tires.

Edmunds.com tested this and found that there was no noticeable difference in gas consumption of cars with over-inflated tires and properly inflated tires. Even if there is a slight improvement in gas mileage with over-inflated tires, this would end up costing you more in the long run. The problem with over-inflated tires is that they wear out more quickly and often times irregularly causing them to have to be replaced more often. Any savings in gas would be wiped out with the increased cost of replacing tires. Add to that the fact that over inflating tires increases the risk of accidents due to a decrease in stopping ability and poorer handling and this gas saving technique has the potential to be quite costly to your wallet in the long run.

Turning on the AC Wastes Gas

This is the classic “AC on with windows down vs. AC off with windows up” argument. While one might be slightly more fuel efficient than the other depending on the speed of the car and its aerodynamics with the windows down, most car sources and independent rating sites call this debate a tie.

This is one of those tips that may have been true years ago when using the AC put a lot of stress on the engine, but this is no longer the case with modern cars. While running the AC does pull some power from the engine (so not running the AC with the windows rolled up will get you a bit better gas mileage than having the AC on with windows rolled up), rolling down the windows increases aerodynamic drag which also decreases fuel efficiency so they basically cancel each other out.

Regular Tune-Ups Will Save Gas

This would seem to make sense on the surface. If a car isn’t properly tuned, then it seems pretty obvious that there would be a good chance that it was wasting gas. In the past with older cars, this was true and that is where this gas saving tip originates. The reason that this tip is no longer applicable is that most cars no longer need regular tune-ups due to advances in technology. Newer cars have computers which take care of all the engine adjustments needed to keep the car running well. The only ones that require you to take your car in is if the “check engine” light comes on or if it’s due for regularly scheduled maintenance as indicated in the car’s owner’s manual. Doing any regular tune-ups beyond these would be a waste of money and not increase your gas mileage.

Premium Gas Equals Better Mileage

This better mileage tip has it’s basis in reality, but simply doesn’t apply to the vast majority of people. If you purchase a car with a high performance engine that requires higher octane fuel, then you want to place premium gas into that car and it should make that car run better (and thus get better mileage) than if regular unleaded gas was put into the tank. The issue is that most car engines on the road don’t require anything beyond regular unleaded gas to perform at their best, meaning that putting in the higher grade gas won’t make them perform any better.

Fill Up in Cold Weather to Get More Gas at the Pump

This is a gas myth that has it’s origin in science. When gas is cool it’s denser than when it’s warm. Denser gas would give you more miles per gallon than gas that was less dense. Therefore the assumption goes that if you fill your car up with gas during the cooler periods of the day, you will be pumping gas that is denser in volume than if you pump the gas at warmer periods of the day giving you a better value for your money.

The problem with this is that gas is stored in underground tanks which are deep enough that the air temperature of the day doesn’t effect it. So even if you pump your gas in the heat of the day, the temperature of the underground tank remains the same meaning that you get the same amount of gas density no matter what time of the day you pump. In addition, most gas pumps today are engineered to equalize any temperature differences (because the underground tank’s temperature can vary during seasons) to ensure that density remains consistent.

A Clean Air-Filter Will Save Gas

This is another gas saving myth that gets it’s origin from older model cars where it was true, but new technology has made it obsolete and no longer the case. It was true when cars had carburetors, keeping the air-filter extra clean could help the car to get better gas mileage. Today, the car’s computer system regulates the amount of gas that is injecting into the engine so that the air-filter being a little dirty isn’t going to make a difference in gas mileage. This is especially true since today’s air-filters have also greatly improved to allow better airflow even when they begin to get dirty.

Now, if the air-filter is completely filthy, that’s another story. If the air-filter ever does get dirty enough to effect engine performance, the “check engine” light would likely go on, so constantly replacing air filters at the first sign of any dirt will end up costing you money for the filter without giving you any benefit of better gas mileage.

Leave the Engine Idling During Quick Stops

This gas saving myth comes about with the assumption that it takes more gas to start a car than letting it idle for a short time, so if you are running into a store for just a few seconds, it saves more gas to leave the car running than it would to turn it off and on again. The easiest way to dispel this myth is the hybrid car. The entire concept of the hybrid car is to save gas by shutting off the engine when it isn’t moving or moving slowly, and that is how it gets such great gas mileage. By not wasting any gas when you are stopped (if the engine is running and the car isn’t moving, you are getting 0 miles per gallon), the hybrid cars are able to get overall better mileage than standard engine cars. There is no extra gas used when turning off and on a car engine that is already warmed (there is a bit for engines that are cold), so if you want to save the most gas possible, don’t leave the engine idling anytime you are parked even if it’s only for a short period.

Everyone wants to save gas, especially when gas prices rocket to their current levels. That doesn’t mean that you should go out and try every tip you hear in order to try and get better gas mileage because, as the above list shows, there are a lot of times when you think you might be saving money when you actually aren’t. Always do a bit of research to make sure the gas saving tips are accurate and will actually help you accomplish the goal of saving money.

(Photo courtesy of °Florian)

Get More Money Without a Second Job

December 10, 2009 By Jennifer Derrick 8 Comments

When thoughts turn to getting more cash every month, many people assume that they’ll have to take a second job. That may be true. If your financial situation is dire or if you have your heart set on some big ticket item, a second job may be the only way to get to the necessary level of income. However, it is possible to bring in large sums of money without getting a second job, just by changing the way you currently live.

You can do this three ways (singly or in combination): Sell your stuff, cut your fixed expenses, and find ways to earn money that are not a “job” (online surveys, entering contests, a little freelance work, etc.). The easiest and quickest way is to cut your fixed expenses. I hear you now, “But a fixed expense is just that. Fixed. It can’t be changed so we’re stuck with it.” That’s just not true. Nothing is “fixed” in stone. Yes, getting the expense reduced may mean some time, inconvenience, or sacrifice on your part, but it is possible to reduce or eliminate every expense that you think is fixed.

If you are in a financial situation where you need a lot more money fast and you don’t want to get a second job, then reducing your fixed expenses is one avenue you need to look at. So how can you reduce those supposedly “fixed” expenses? Here are a few ideas for some common expenses:

Mortgage payments: Downsize to a smaller, less expensive house. Refinance and take advantage of lower interest rates. See if you have any extras like PMI on your mortgage and find out if you qualify to have them removed. Rent out a room and use the rent money to cover your mortgage.

Rent: Move to a different complex. Move to a smaller unit within the same complex. Take on a roommate. Ask the landlord for a reduced rate in exchange for working in the office two days a week or doing some landscaping. Ask the landlord for a reduced rate based on your status as a long term, good tenant.

Utility bills: Conserve water and energy (take shorter showers, only run full loads of laundry/dishes, stop watering the lawn, turn off lights when you leave a room, switch to CFL bulbs, etc.). Ask your energy company if they offer reduced rates for off-peak usage. Ask if they have an energy conservation discount. See if your utility will give you a discount for paperless billing. Get a programmable thermostat and have it turn your heat/AC up or down when you’re not home or asleep. Unplug anything not in use and put everything else on power strips you can flick off when you’re not using it.

Phone/Wireless/Internet: See if a bundle will lower your bills. Drop extras like call waiting, caller ID, unlimited data, text messaging, and long distance. Switch to a slower speed Internet connection. Drop the phone or Internet service altogether if you aren’t using it. Switch to prepaid cell service. Consider dropping the landline if you only use your cell phone.

TV/Cable: Switch to a lower priced package. Call your provider and ask them to match a competitor’s deal or see if they can lower your bill (many have unadvertised packages or customer retention deals they can offer if you ask). Drop the service entirely and rent movies from Netflix, Redbox, or free from the library, or watch TV shows over the Internet at sites like Hulu.com.

Car payments: Sell the expensive car and get a cheaper one. Turn in your lease and buy a beater. Get rid of one car and become a single car family. Become the carpool leader at work and use the money your riders give you to pay your car note. Sell the car and use public transit, walk, or ride a bike.

Insurance: Shop around for the best price. Drop unnecessary coverages. Ask about discounts for safety features, group memberships, taking a class, healthy living, holding more than one policy with the company, etc. Raise your deductible. Sell something (like a car, expensive jewelry, or art) to get out from under the insurance payment. Sell the expensive-to-insure car and buy one that costs far less to insure.

Taxes: Appeal if you think your property valuation is too high. Contribute to an IRA or 401K to reduce your taxable income. Take all the tax deductions you’re entitled to. Donate to charity. Move to a lower tax area or sell the house and buy a smaller one that carries less of a tax burden. Sell the new car that has a high property tax and buy one that’s worth less.

Debt payments: Ask your credit card company to reduce your interest rate. Move balances to cards that offer zero percent on balance transfers. Look into consolidating student loans. Sell the things that caused the debt (cars, electronics, “toys,” designer clothes, etc.) and use the money to pay down the debt. Negotiate with hospitals and medical providers to lower your payments.

Services: Any service that requires a monthly/annual payment can be discontinued. Alarm service, gym memberships, lawn service, maintenance contracts, subscriptions, dues, etc. can all be cancelled. Try renegotiating the rate on anything you think you must keep.

Food: Use coupons. Shop sales and stock up. Don’t eat out often. Eat less meat. Shop non-traditional markets like Aldi’s and bakery outlets that specialize in overstocks. Don’t waste food; eat it before it expires. Shop local farmer’s markets for in season produce. Buy fewer processed convenience foods and stick to more natural foods.

Fuel: Drive less. Combine errands and don’t make unnecessary trips. Trade in the large SUV for a smaller, fuel efficient car. Use sites like GasBuddy.com to find the cheapest stations. Use mass transit or walk. Start a carpool.

Fixed expenses won’t magically reduce themselves, but neither do they have to remain at their current levels. All expenses can be changed, you just have to be willing to make those changes happen. Some of those changes are hard and may seem like an inconvenience or a burden but if you need money fast and you don’t want or can’t get a second job, then you can still generate a lot of cash by drastically reducing your “fixed” expenses.

Should Rising Gas Prices Make You Buy a New Car?

April 28, 2008 By Jennifer Derrick 11 Comments

Unless you’ve been living under a rock, you know that gas prices are soaring sky high. As a result, many people are rushing out to trade in their older, larger, inefficient cars for newer smaller, more efficient models. But is this rush to trade really necessary, or even a good thing?

Certainly if you’re driving a Hummer (or other large or extra large SUV/truck) that gets, at best, 13 MPG on the highway, you would be better served financially by switching to something smaller and more efficient. It’s not difficult to find a car that can double that MPG. However, what if you own a smaller SUV or a mini-van? Can you really do a lot better financially by switching?

Looking at many of the major mini-vans and mid-size SUV’s on the road today, the average highway MPG is around 25 MPG. The average MPG for many of the major mid-size cars is around 30 MPG. As with anything, some are better and some are worse, but these are the averages. So if you’re driving a mid-size van or SUV and switch to a mid-sized car, you’ll save some fuel, but only an average of 5 MPG. Even switching to a much smaller, compact or economy car will only get you an average of 32 MPG on the highway, not much different than the mid-sized car. To reap significant savings you’d need to move to a hybrid of some sort, where the highway MPG can jump as high as 45 MPG.

The problem in the U.S. is that we have some of the worst fuel economy standards of any major nation. We simply don’t require that our cars and trucks get the gas mileage that they could. If we adopted the same standards as some European nations, our cars could easily be getting 40 MPG on average, with many pushing fifty miles per gallon. But because we won’t adopt such standards, we’re stuck with lower MPG’s that make switching to smaller cars almost no better than driving larger cars.

Other factors may eat into any potential savings, as well. How much you can sell your current vehicle for will have a big impact on your savings. If you can’t sell your current car for more than or as much as you owe, you’ll have to foot the bill for the difference on your old loan in addition to paying for the newer car. With the market for SUV’s, vans and trucks shrinking, it can be difficult to get the price you need for your current car. This can lead to larger monthly payments (paying for a newer car, as well as paying off the loan on the old car) that eat into any money you might save at the pump.

If you own your car outright, what you can sell it for is less of a factor, although the amount you can get may dictate what you can afford in terms of a newer car. If you don’t have a lot of cash lying around, a low resale on your current car could mean that you have less to spend on a new car, or that you now have a car payment where before you had none. If you’re not currently making payments, make certain to take any new payment into account when calculating potential savings at the gas pump. You may be trading one savings for another expense.

Also remember that any newer vehicle is likely to cost you more in taxes and insurance. Newer vehicles are almost always more expensive to insure because the cost to replace them is greater. And, because they are newer and worth more, the taxes are going to be higher. How much higher, of course, depends on what you get and what you’ve been driving, but do your research to make certain that your fuel savings won’t be eaten up by higher insurance and tax payments.

In most cases, switching just to save a few bucks on gasoline isn’t worth it. Unless you are moving down from a giant SUV, the move from van to car or mid-sized SUV to car won’t save you that much. It may end up costing you more once you factor in new payments, insurance, and taxes. Obviously, if you need a new car because your old one has given up or has become too expensive to maintain you want to shop for the best MPG you can get so that, moving forward, you can save as much as possible. But if you’re simply looking to trade a perfectly good car to save on gas, you might be better off holding on to your old car for a while longer until you really need a newer vehicle.

In the meantime, look for other ways to save on fuel. Some tried and true ideas:

Slowing down is a great fuel saver. Most cars get their best MPG around 60 MPH on the highway. As you go above that, your fuel economy drops rapidly.
Make certain your car is well maintained. Proper air pressure in the tires, clean oil and filters, and proper fluid levels all contribute to help a car get its best MPG.
Don’t carry everything you own in the car because the extra load is a drag on your fuel economy. Similarly, try to avoid using a “snail” or other cargo carrier on your roof as it creates more drag which lowers fuel economy.
Combine your errands and do as much as possible in one trip to save on repeat trips.
Plan your route to do the least amount of backtracking.
Try to avoid sitting in rush hour traffic. Leave for work and home earlier or later to avoid the worst traffic. Similarly, if you don’t work outside the home, time your errands to avoid rush hours.
Don’t go out for lunch every day. Not only does it cost more for the food, but also in the travel cost of getting to the restaurant. Bring your lunch and eat in.
If you can find someone to share a ride with, even if only once per week, do it. Carpooling is a big fuel saver for both parties.
Don’t idle at the drive thru. Turn off the engine while you wait for your food or money. Better yet, go inside and conduct your business.

I want to make one more point about switching cars just to save fuel. Yes, saving fuel is good for the environment. I don’t dispute that. But it’s better for the environment to keep a well-maintained, functioning car on the road for longer, rather than buying new cars frequently. New cars require tremendous amounts of resources and energy to build. The longer you can keep your older car on the road and functioning well, the fewer resources that are gobbled up to make new cars. Additionally, fewer cars end up in landfills and junk yards. If everyone kept their cars for extended periods of time, we would save more resources and energy than if everyone switched to smaller cars.

When you have no other option, when your old car has truly taken its last breath, switching to a fuel efficient car is the way to go. I highly recommend that, when the time comes, you go for the best fuel economy you can get. But until the time comes when a newer car is needed (not wanted), I recommend keeping your old car for as long as possible and keeping it well maintained. That’s the best way to go, both for your wallet and for the environment.

Image courtesy of Cayusa