Wednesday, August 29, 2012

Saving at the Gas Pump

There is plague amongst my friends that has amused me for quite some time.  Most of us are bargain hunters at heart, but are you really getting a better deal when you drive around for the best gas prices?

Scenario 1
You are driving along the freeway and need gas.  Not too far-fetched, right?  You pull off the interstate and into the gas station to behold that the price is, let's say $3.79. Too much, you think.  So you head off to the next exit where gas is $3.69.  

Scenario 2
You need gas.  Costco is only five minutes from your house and $.20 cheaper than the place directly to your right at $3.79, so you take the extra ten minutes from your day to make the Costco journey for $3.59 gas.   

Scenario 3
You need gas.  You see a gas station.  You get gas at $3.79.

Assume your gas tank is 10 gallons and you get an average 30 mpg.  
Gas at $3.79/30 miles = .13 per mile.   
You make $20/hour.  Each minute of your time = .33

Scenario 1: Your Savings (-.93)
Your detour cost you five minutes.  $1.65. 
You ventured 2 miles extra - 1 off the freeway, 1 back on.  .26
You paid: $36.90 + .26 + $1.65 (or five minutes of your time) = $38.83
What you would have paid had you gotten gas at the first station: $37.90 

Scenario 2:  Your Savings (-1.82)
Your detour cost you ten minutes.  $3.30. 
You ventured 4 miles extra - 2 there, 2 back.  .52
You paid: $35.90 + .52 + $3.30 (or ten minutes of your time) = $39.72
What you would have paid had you gotten gas at the first station: $37.90  

Scenario 3: Your Savings (.00)
You paid $37.90

Photo taken 11.12.2008


Janell said...

The Costco scenario also needs to account for the fact it always seemed I had to wait 5 minutes for an available pump. (These days the nearest Costco with a gas station is so far away it's not even worth considering.)

jeff said...

While I agree that driving all over town for cheaper gas can nullify most/all of any potential savings, I don't think it's logical to factor in a person's salary to the equation (unless the person can only fill up the tank while "on the clock," and they get docked for their time missed).

Larissa said...

You make a valid point. What I was trying to get across is, "How much is your time really worth?"
To me, it is never worth wasting the ten minutes cause I'm just too darned busy and would rather be doing too many other things with that time. So how valuable is my time? Well, the only tangible worth I can put on it is a guesstimate of what I think my average independent friend makes per hour.

Barbara Fox said...

Scenario 2 got a big discounts... :)