Here's How Much Costco Gas Could Save the Average Driver in a Year (2024)

FAQs

Here's How Much Costco Gas Could Save the Average Driver in a Year? ›

Costco gas saves $116 per year vs. the average.

It's a well-accepted fact that Costco gas is cheaper than the fuel at most other places. While the exact amount of savings you'll get depends on factors like where you live and which club you visit, you can reasonably expect to save around $0.15 to $0.20 per gallon.

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.

Buying gas at Costco can save you money -- typical savings are around $0.20 per gallon. It makes stopping at the warehouse club more convenient -- you can buy groceries and fuel up your car. The higher quality of Costco gas could help your vehicle run more smoothly.

The short answer is that unlike pretty much every other retail business that sells gasoline, Costco doesn't care about making money from its gas pumps. In fact, Costco typically sells its gas at a moderate loss. Why would Costco do this? It's not an act of charity.

Why is gas so cheap at Costco? The answer is simple: they just have very loyal customers. To purchase their gas, you have to be a member, and membership sales make up about 75 percent of the chain's profit.

This is a big book-keeping exercise. The average American uses 600 gallons a year; therefore, if you life 75 years you would use 45,000 gallons.

Gas stations can get busy (avoid weekends)

Avoid weekend fill-ups if you can. Buying gas on a weekend could be a nightmare, as waiting times could take hours. To avoid this, the best time to get gas at Costco is on weekdays between 10-11 in the morning.

It's good for your car

The fact that gas is cheaper at Costco doesn't mean it's lower in quality. The company offers Kirkland Signature gasoline, which is formulated to improve vehicle performance and fuel economy. Costco says the gas also reduces emissions, making it better for the environment.

Q: Why does Kirkland Signature™ Gasoline contain ethanol? A: The federal Energy Policy Act of 2005 established the Renewable Fuels Standard, which required that a certain amount of ethanol be used in the nations' fuel supply. The Energy Independence and Security Act of 2007 increased this amount.

Do you get 2 cash back on Costco gas? ›

The primary benefit of the executive membership is scoring 2% back on Costco purchases. Certain purchases don't qualify for cash back, including gas, stamps, and vehicles.

Costco offers Top-tier gasoline, ensuring that their fuel contains higher levels of detergents, which contribute to engine cleanliness over time. On the other hand, Sam's Club does not provide Top Tier gasoline. We can verify that the gas quality is not the same at Sam's Club and Costco.

Generally speaking, buying gas at Costco is significantly cheaper than doing so at a traditional gas station. The typical driver can save more than $100 per year. Buying gas at Costco can justify a membership all by itself.

So all the money that Costco earns is mainly membership fees, as their merchandise is either break even or a tiny profit margin and many of their items are in the red.

Exxon Mobil was the leading oil and gas producing company worldwide by net income as of 12-month rolling data from June 2024. Many oil supermajors are among the most profitable oil and gas companies after rebounding from losses caused by the COVID-19 pandemic.

The cost to refine gasoline varies between 40 cents and 70 cents per gallon, depending on various factors. The cost to transport the refined oil to service stations runs about 27 cents per gallon. Taxes vary by state.

“Costco has a wide range of businesses, and this is seen as a boost to those businesses.” Even if you're not a Costco shopper, the savings on gasoline alone can make the price of a $60 membership worthwhile.

Shopping in bulk at Costco or another wholesale store can save you a ton of money. Grocery prices are high and they don't seem to want to come down anytime soon. If your weekly food spend is giving you heartburn, you can battle high grocery prices by buying in bulk.

It's good for your car

The fact that gas is cheaper at Costco doesn't mean it's lower in quality. The company offers Kirkland Signature gasoline, which is formulated to improve vehicle performance and fuel economy. Costco says the gas also reduces emissions, making it better for the environment.