More on gas prices

Do you drive around for low gas prices? If a station offers a nickel-a-gallon discount for cash, do you pull out your Jacksons? Do you drive the first vehicle in the driveway?

With the price of gas passing $4.00 a gallon, you should rethink all these activities. It's a matter of percentages.

(For these calculations, we will assume the average car gets 25 MPG in a 15 gallon fillup and pays about $4.00 / gallon. As the price goes up, your mileage goes down, or you pump less gas at a stop, the logic gets stronger.)

If you get off your customary route to pay $3.99 rather than $4.05, you're saving 6c per gallon. With that fillup, you've saved $.90. That will buy you less than 1/4 gallon more or about 5.5 miles. That may be more than around the block, but it won't justify going to the next interstate exit and back.

The same numbers apply to savings for cash. Of course, if your credit card gives you a 1% or 3% rebate, not many stations will give that much discount. 3% of $4 is 12c. This assumes you pay off your credit card without interest. If you pay the bank 3 or 4 months' interest at 9% APR (a good rate; some people pay two to three times that), you've more than lost your 3% rebate.

Which car do you drive? If you have one car that gets 22 MPG and another at 27 MPG, should you make an effort to drive the more efficient one? If you have a 10 mile one-way commute, you'll save about $.67 per day. That may not sound like much; but come Friday, it's another beer at happy hour. Obviously a bigger spread means more money. Here we're talking about a 22% difference; 5 MPG is a bigger percentage if you're starting with less but only 13% between 42 and 37 MPG cars.

Download the spreadsheet for your own calculations.

(c) 2004-2008 Bill Barnes w/ public domain components. Free distribution with permanent acknowledgment.
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