If you've ever driven by a Costco gas station on the weekend and seen a line around the block, you might think they must be giving the stuff away for free. While they're not quite doing that, it does appear that Costco is at least offering a better-than-average deal at the pump.
That said, how much you save will depend a lot on your area -- and how far away from Costco you live. If you're driving a significant distance just to fill up, you may be doing more harm than good (for your budget and the environment).
How Costco gas prices compare to other stations
Gas prices can change just from block to block, so it's hard to generalize. We used Gas Buddy and Costco's website to compare gas prices across seven cities from around the country. Here's how Costco's prices compared:
| City | Lowest Price | Costco Price | Average Price |
|---|---|---|---|
| Denver, Colorado | $2.79 | $2.94 | $3.40 |
| Minneapolis, Minnesota | $2.89 | $3.06 | $3.39 |
| Eugene, Oregon | $3.46 | $3.46 | $3.77 |
| Syracuse, New York | $3.21 | $3.31 | $3.56 |
| Albuquerque, New Mexico | $2.95 | $3.12 | $3.36 |
| Baltimore, Maryland | $3.30 | $3.39 | $3.63 |
| Chicago, Illinois | $3.43 | $3.99 | $4.14 |
Data sources: Gasbuddy.com, costco.com.
The data shows that Costco's prices aren't typically the absolute cheapest, but they're always significantly less expensive than the "average" price. This means you're more than likely getting a deal when you get gas from Costco versus another random gas station in your city. (Well, unless you happen to live near one of the cheap gas stations throwing off the curve).
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Costco gas saves $116 per year vs. the average
Across the seven cities, Costco's prices ranged from $0.15 to $0.46 per gallon less than the city's average gas price. That worked out to be $0.28 per gallon cheaper on average.
The Bureau of Transportation Studies says drivers cover an average of 29 miles per day, which would work out to 10,585 miles a year. The average vehicle gets 25.4 mpg (according to the Environmental Protection Agency), so that's just under 417 gallons per year. Saving $0.28 per gallon on 417 gallons equals a total savings of $116.76.
A basic Costco membership currently costs $60 a year ($65 starting in September), so the gas savings alone could be worth it if you happen to live in a pricier area.
How far should you drive for savings?
There's one big question you should ask yourself before defaulting to gassing up at Costco: What are you trading to fuel up at Costco?
For example, are you driving significantly out of your way just to go to Costco? If so, you could be spending more on gas than you're saving. You may even pass less expensive gas stations on your way that you don't notice because you're so focused on your destination.
Even if Costco is nearby, are you waiting in long lines -- with your car idling -- using up gas as you wait? Estimates say idling uses around half a gallon an hour. If you idle for 15 minutes while waiting to save $0.03 a gallon, you may have just literally burned up your savings.
Use mobile apps to find (mostly) current prices
If you're not sure whether it's worth heading to Costco, good news! There's an app for that. Actually, there are several.
You can see the latest gas prices for any Costco location in the Costco app (it's listed along with the store hours in the location finder). Third-party gas apps, like GasBuddy, can also give you Costco's gas prices, as well as prices for other nearby gas stations.
As always, make sure you're taking along your gas rewards credit card when you fuel up. The best cards can save you 4% to 5% on gas, no matter where you buy.
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