Pain at the Pump?
Sure, gasoline costs more than it did a year ago. That pain at the gas pump has people looking for ways to cut costs, according to a recent countrywide online survey. But before you make a big change in the way you live your life, the big question you should ask yourself is what are you willing to do to save money on gasoline? And a good second question is how much will it cost you?
Yes, gasoline prices have made U.S. consumers reconsider their current driving behaviors. Last year, when prices topped $1.75 a gallon, half of all drivers (50 percent) surveyed by the Progressive Group of Insurance Companies said they would change their driving habits as a result of rising gas prices. When the same question was posed this year as gas prices reached an all-time high of $2.22 a gallon, 14 percent more drivers (57 percent) said they'd change their driving habits. And the more gas prices rise, the more people are willing to change: 66 percent will change how they drive if prices reach $2.40 a gallon, and 78 percent will if prices reach $3 a gallon.
Additionally, respondents cited all kinds of things they would do differently in light of the increased price of gasoline. According to this year's survey results, the majority say they will drive less often (52 percent) while others say they will drive shorter distances (24 percent). One has to wonder, will their places of employment get closer somehow? Some responded they will cut down on driving to see family and friends (23 percent), and the majority (61 percent) say higher gas prices will affect their summer vacation plans. For example, they will vacation closer to home (24 percent), cancel vacation plans altogether (14 percent), fly instead of drive (13 percent) (there's a money-saver) or take short day trips instead of driving to a destination farther away (11 percent).
While all of this might seem a rational response to the increase in fuel prices, doing a little simple math might change your mind. Let's say you put 15 gallons of gas in your car once a week. At $2.25 a gallon a fill-up will cost you $7.50 more than it did when gas was $1.75 a gallon. That means if prices stay at that high level (and that's a big if), each month you'll spend $32.50 more on fuel than you did in the halcyon days of $1.75/gallon gas. In this scenario you'll spend $390 additional dollars a year.
Now nobody wants to pay an additional 400 bucks if they don't have to, but is it worth blowing off a vacation for an extra $7.50 a tank? Certainly you'd spend more on that on t-shirts and suntan lotion. And how about the idea of buying a new car to save money on gas? Get serious. A new car will likely cost you thousands of dollars in additional expense, including financing and depreciation, versus staying in your current vehicle, so buying a new car to save money, despite the increase in gasoline prices, is a fool's errand.
In fact, even driving to an inconvenient gas station to buy cheaper gas might well be foolish. A whopping 93 percent of drivers told the survey they would drive out of their way to save 20 cents a gallon on gas. But is that rational?
"Driving out of the way to save 20 cents a gallon is pretty extreme when you stop to think about how much money you're really saving," Robin Harbage, product development general manager, Progressive. "Assuming you fill your 20-gallon tank about once a week and save 20 cents a gallon, in a six-month period you'll save $104."
That's four bucks a week, friends, and that doesn't include the extra miles you'll be burning fuel getting to and coming from that secret station with the bargain gas, not to mention the time you'll spend doing it. If you want to save money, shop around for car insurance and keep your tires inflated to the proper pressure. And rest knowing that maintaining your current chariot is still your best route to saving money overall.
Cleveland-based auto writer Luigi Fraschini writes frequently on personal finance issues relating to car ownership.