Will a Costco or Sam’s Club membership save you money on gas?
Fun with numbers!
You may have seen signs outside of Sam’s Club advertising significantly lower fuel prices, sometimes more than 25 cents per gallon for premium, but you may be wondering if its worth the trouble of paying for membership. Well, I did the math for you.
Here is the scenario:
Costco memberships start at $50 per year.
The average American driver puts 12,000 miles per year on a car.
Regular unleaded at the Shell station nearest to me is currently $3.69.
The nearest Costco is $3.59, or 10 cents less per gallon.
For premium unleaded, the Shell station is 3.96.
The nearest Costco is $3.79, or 17 cents less per gallon.
Costco 20 cents more for premium over regular while the Shell station charges 27 cents.
————————————————————————————————–
Let’s take a typical midsize sedan and run the numbers:
2010 Malibu I4 Auto – 26mpg combined
Regular unleaded gasoline
12,000 miles/year
$3.69 per gallon at Shell, 87 octane
Annual fuel cost: $1703.08
$3.59 per gallon at Costco, 87 octane
Annual fuel cost: $1656.92 + $50 membership = $1706.92
Annual Loss: $3.84 <—-
————————————————————————————————–
Now, let’s say you drive a more expensive car that requires premium unleaded:
2010 Cadillac DTS Performance V8 Auto – 18mpg combined
Premium unleaded gasoline
12,000 miles/year
$3.96 per gallon at Shell, 93 octane
Annual fuel cost: $2640.00
$3.79 per gallon at Costco, 93 octane
Annual fuel cost: $2526.67 + $50 membership = $2,576.67
Annual Savings: $63.33 <—-
————————————————————————————————–
Costco’s noticeably lower price jump for premium unleaded makes a noticeable difference, but $63 is hardly a deal. You would save more per year buy eating out less, and if you can afford a $50,000 Cadillac, you won’t sweat $63 in annual fuel costs.
This also assumes that you are not using your Costco membership to save on food, tires, eyewear, photo processing, insurance, clothes, furniture, dog food, or other essentials. My $50 membership fee pays for itself every year.
These figures also assume that you would fill up at Costco exclusively. Topping off your tank anywhere else would quickly eat into your $63 annual fuel savings.
Additionally, Sam’s and Costco’s pumps only accept debit cards, so you can forget about earning points or cash back for gas with your credit card.
CONCLUSION:
Don’t join Costco or Sam’s Club for the fuel discounts. If you have no intention of shopping there regularly, don’t bother. Think of the fuel discount as a perk for existing members rather than a reason for joining.
Fill up at the gas station that sells better coffee and don’t worry about the price.
Considering you and I split the fee’s it’s even better. Not to mention I do most of the shopping there and, like you said, a savings only if you do most of the Costco/Sams experience. I did recently sign up for the Costco American Express card that has 0% APR for the first 8 months and I get 3% back on gas purchases from any gas pumps – not just Costco. So as long as I pay the card off every month I get even more savings. But you are absolutely right, it’s not worth just a membership for gas.
I let my Costco membership expire in 2004 or 2005, but it wasn’t until 2009 that an expired membership was flagged at the pump. Since my ’91 DeVille required premium, I gassed up at Costco whenever possible, and on average, the price for premium at Costco was about the same as regular everywhere else. Now, I mostly fill up at Safeway. Not only are their prices usually lower than most other places besides Arco (which I won’t use), I get a 3-cent discount with my Safeway Club card, which is free. So I only pay a few cents more at Safeway than I would at Costco.
I don’t need anything in bulk and wouldn’t save enough overall at Costco to make the membership worthwhile. At least not right now.
I just use it since I go there grocery shopping every other week. I’m starting to wonder if I shouldn’t just go someplace else as I think the premium has gone down hill. I’ve only put premium in my truck since I installed a performance ECU that requires it. Considering how much of a difference a can of B12 Chemtool has made recently when I noticed my fuel economy dropping I suspect it’s pretty low tier premium with little to no detergents in it. I expect gunked up injectors running cheap 87 but running 92 I shouldn’t be noticing such a difference.