How Much More Are You Paying For Gas This Year?

Current gasoline prices nationwide are the highest they’ve been since 2014.  The AAA site will give you the current day to day average, and it was $2.86 when I wrote this post. 

Time magazine created a cool calculator that will tell you how much you’ll pay for gasoline this year based on your exact vehicle make/model and how many miles you think you’ll drive. 

It will also compare the price increase to last year so you can see the impact.  Your overall gas expenditures can be deceiving, what appears to be just a few cents difference per gallon can really add up. 

When you go to the site they list $2.79 per gallon as the average price for 2018, but there’s a slider tool that allows you to adjust the price to whatever you’d like.  Current prices are higher but I’m writing this in summer which tends to be the peak, so $2.79 is perhaps reasonable. 

The site also has the 10 most popular vehicles and their total budgets for gas pre-populated.  They used all 2018 models and an average yearly mileage of 13,476, the national average.

 

Of the 10 most popular vehicles in America in the chart above, the two extremes at either end of the miles per gallon spectrum are the Ram Pickup which gets only 17 mpg and the Honda Civic which gets double that at 34 mpg. 

So a person driving a Honda Civic will spend $1,165 less this year alone on gas than a person driving a Ram Pickup, assuming $2.79 a gallon gas and 13,476 miles driven. 

But let’s take perhaps a more realistic view of the extremes.  Very large SUV’s are still tremendously popular in America, and not everyone drives a 2018 model. 

Someone driving a 2013 Chevy Tahoe gets 13 mpg (sigh…) and will spend $3,047 on gas this year at the average price and mileage.  Another person driving a 2013 Toyota Prius, which gets 50 mpg (now we’re talkin’…) will spend $792 on gas this year, driving the same distance and paying the same per gallon. 

 

 

So, they go the same places, pay the same price at the pump, and the Prius owner spends $2,255 less!!

What’s $2,255 between friends? 

And that’s just THIS YEAR.  I work with many colleagues who have long commutes and who have been driving gargantuan SUV’s since the 1990’s.  Let’s see how that works out for their finances. 

Since it would be too difficult to find old gas price data and mpg data, let’s just assume the $2,255 difference between the Tahoe and the Prius for the next 20 years. 

So the Chevy Tahoe owner wakes up one day, has an epiphany, and buys a Prius.  Boom, he or she just started saving $2,255 per year on gas. 

Instead of inflating their lifestyle and buying stuff, they put it in VTSAX, which should earn 7% a year.  Let’s take a look.  Using the calculator at Investor.gov…     

                 

 

Yeah, that’s $101,167 saved in 20 years on gas alone by driving an efficient vehicle!  

Of course virtually everything else on a Prius costs way less than a Tahoe as well (tires, fluid changes etc), so there’s tons of other savings. 

Oh, and by the way, the above calculation does not include dividends being reinvested, so it would actually be quite a bit more. 

Still like your Tahoe? 

Go at it, just know the numbers. 

They say the first $100,000 is the hardest as far as accumulating net worth.  Simply switching from a vehicle that gets 13 mpg to one that gets 50 mpg will get you there on gas savings alone over 20 years. 

After playing with the calculator I noticed that it didn’t have all car models and variants.  For instance I have a Subaru Outback with a 4 cylinder engine, but Outbacks also come with a choice of a 6 cylinder which is of course way less efficient with fuel.  For most model years the calculator only has the mpg data for the 6 cylinder version. 

They missed an opportunity to make this way better by locking in the annual mileage number at 13,476.  If you were able to adjust the mileage, you’d be able to use the calculator to quickly figure how much you’ll pay for gas for specific long trips or even portions of the year.  *UPDATE – I was apparently having browser issues and you can actually adjust the mileage number – booyah!

But overall I think it’s a very handy tool, especially for those with long commutes or who are considering purchasing a new or different vehicle. 

And if you drive a Prius or another vehicle that gets awesome mpgs you can use it to be self-righteous and brag to your friends about how much you’re saving.