Is Gas Really Cheaper at Costco?
It’s March 14th and the average cost of a US gallon of gasoline is $4.325, up from $3.488 a month ago and slightly below last week’s all-time high of $4.331. The good news: According to the latest report from AAA Gas Prices , this trend “may remove some of the extreme price pressures consumers have found at the gas station.” The bad: The same report says the market remains volatile and prices could rise again.
We all want to know how to get the most out of every drop of gas right now . The general consensus is that gas is always cheaper at warehouse clubs like Costco or Sam’s Clubs. An annual Costco membership costs $60 for the Gold Plan and $120 for the Executive Membership. But if you’re not already a member, is it worth purchasing a Costco membership solely for the potential gas savings?
We’ve calculated how much money you’ll save if you buy a Costco membership now solely to take advantage of their gas prices for the rest of the year.
Is it worth buying a Costco membership just for gas?
In the past, gas prices at outlets such as Costco and Sam’s Club have been reported to be 30 cents lower per gallon than conventional gas stations. Our goal here is to see if subscribing to Costco’s most affordable gas-only membership saves you money in the long run, assuming fuel price increases don’t drop significantly anytime soon.
According to Rocket HQ , small to mid-size cars typically hold 12 gallons of gasoline, while trucks and larger SUVs can hold 16 gallons or more. For this experiment, let’s meet in the middle and take the 14 gallon gas station as a guideline. Also, for the sake of math simplicity, let’s say you fill up your tank about once a week.
Since there is no obvious difference in gas deals between membership plans, we will work with their cheapest plan which costs $60/year.
I used the AAA gas price map and GasBuddy to get samples of gas prices in one of the most affordable and one of the most expensive cities right now.
- Columbus, Ohio : Costco = $3.89 / Shell = $3.99 / Kroger = $4.09
- Inglewood, California : Costco = $5.39 / 7-Eleven = $5.64 / Chevron = $5.89
Gas cost without Costco membership
In Columbus, the cheapest option other than Costco is Shell. You pay $3.99 per gallon x 14 gallons = $55.86 per tank. Fill up once a week and you pay $2,904.72 for gas per year.
In Inglewood, you’ll find a 7-Eleven for $5.64 a gallon. You get Slushie to numb the pain. $78.96 per tank and $4,105.92 per year.
Gas cost with Costco membership
In Columbus, $3.89 per gallon x 14 gallons = $54.46 per tank fill. If you fill up your tank once a week, that works out to $2,831.92 per year. Add $60 for the Costco Gold membership that got you those prices in the first place and you get $2891.92.
In Inglewood, California: $5.39 per gallon x 14 gallons = $75.46 per tank. $3,923.92 per year. Plus the cost of the membership, your total is $3,983.92.
You save $1.40 on a tank and $12.80 on gas per year in Ohio.
You save $3.50 on a tank and $122 on gas per year in California.
To compare gas prices in your area, enter your zip code into GasBuddy .
Other considerations (such as this huge queue)
Looking at those $1.40 a tank in Ohio, you might think the savings are less than astronomical (at least in places where gas is already relatively cheaper). However, weigh in on the fact that you can use your Costco membership for other benefits, and the annual purchase can pay off in other food-related ways.
Again, you’re not the first person to think of joining the Costco club solely because of their gas prices. Far from it: Business Insider reports (and r/Costco agrees) that as these savings take hold, it’s getting harder and harder to physically get a seat at the station. Consider if it costs you long lines to get to the gas station.
Finally, it all depends on whether there is a Costco nearby or not. What if you have to waste gas on your way to a Costco gas station and then wait in a long line when you get there? In such cases, gas savings may not be worth the extra hassle.
Conclusion : Costco gas is cheaper for members
An annual Costco Gold membership pays off in gas savings. In addition, you will be able to use your membership to purchase groceries and household items.
However, if you have to make every effort to get to Costco and shudder at the prospect of waiting in very long lines for marginally cheaper gas, then the savings may simply not be worth it for you.