How to Identify Good and Bad Places to Buy Gas

Old gasoline pumps, Norway

(Photo credit: Wikipedia)

Last week, I shared some tips on saving money on gas (or petrol as the Brits call it). I had mentioned that two stations within a quarter-mile of each other were on opposite extremes of the price spectrum. While ironic that they are so close to each other, they both exemplify ways to identify good and bad places to buy gas.

While the individual station with the best price usually changes from week to week, there are a few trends to that will help you know where to look and where not to bother.

Bad Places to Buy Gas

Highways

Go to any given part of the country and the most expensive gas you will find will be the station visible from the interstate.The rule of thumb seems to be that if you can read the price from the highway, be prepared to be ripped off.

There is a Loaf n Jug off of I-25 near Johnstown that is consistently 10-20 cents more expensive than the King Soopers my wife works at. These stores are part of the same company and are on the same gas route. They are just 20 miles apart. It’s the same gasoline from the same source for the same cost. The overhead costs are probably lower for Loaf n Jug. The only difference is that drivers in town know other places to buy gasoline, but out-of-state drivers driving down the interstate don’t know what other gas stations may be near-by.

Big name brands

Shell Oil Company

I know a lot of people are into brand loyalty. My college roommate’s father has only ever purchased from Exxon in his entire life. Can you imagine going to the same gas station for 50 years? I really feel sorry for the guy because Exxon is one of the most expensive places in NJ to buy gas. The only place I’ve ever seen beat out an Exxon is a Shell. Shell’s that are attached to independent convenience stores tend to be reasonable (see more on that below), but the stand-alone ones seem to have a premium to their price tag.

This same trend seems to play out with other brands as well. The gas cards you can sometimes get from the Workforce Center are for Diamond Shamrock, the most expensive gas station I’ve found within the city limits. The times I’ve gotten that $5 gas card, I’ve gotten that much gas and then continued down the road to a cheaper station.

Good Places to Buy Gas

Near competitors

Just off the highway is usually pretty expensive, but when there are a bunch of gas stations clustered around the exit, they tend to be more reasonable. The same goes for off the highway, as well. When I was in my teens and twenties, my hometown only had one gas station. It was a dreaded Exxon, but they were more expensive than the other Exxon’s a couple towns over. Why? Because it was the only gas station in town!

When there is another gas station nearby, the two owners are in direct competition with each other, which drive down prices. One owner may want to raise prices, but will be unwilling to because the higher price will drive customers to his competitor across the street. An extreme example of this is that price war I had mentioned last week that rewarded me with gasoline that was cheaper than a cup of coffee.

Attached to a store

Gas stations owned and operated by a store are going to be cheaper than gas stations without one. Adjusting for all other variables, this is the one rule that I have never seen broken. The reason is pretty simple. If there is a store, they are going to make most of the money with the store. The gas station is just a means of getting more people to come to the store. The gas station itself doesn’t need to make any money that way; it operates more like a loss-leader.

An independent gas station, however, has no such support. It’s only way of making money is by selling gas. They can’t afford to practically give their gas away like the store-attached filling stations. That’s one reason new gas stations always have some sort of convenience store. That’s where the money is and they just can’t compete in the gas game.

Gas stations attached to supermarkets tend to be cheaper than stations attached to convenience stores. I guess the same logic applies. A supermarket does a lot more business than a convenience store and needs less profit from the gas itself.

 

Have you identified any other trends in finding the best and worst places to buy gas?

  • 11 Ways on How to Save on Gas During Christmas
  • Price of Gas Skyrocketing…Gas Stations Shutting Down
  • 3 easy tricks to save gas
  • A Refresher on How to Save Money with Rising Gas Prices

 

Related Posts:

  • No Related Posts

19 thoughts on “How to Identify Good and Bad Places to Buy Gas

  1. One of the best places for me is the industrial estate just off the highway. And a place where you see lots of trucks stopping. I wouldn’t get too much out of my way to buy gas though, and maybe use a price app to check where to go.
    Pauline recently posted..Life is not like the moviesMy Profile

    • I talked briefly about using a price app last week. Glad you’ve been able to identify the places near you that are consistently the best priced.

  2. I have to say I agree with these. Soemtiems when you’re on a roadtrip you can’t really help but stop at whatevers on the highway right there. But if you live in a town, you shoudl defintiely know where the cheaper places are!. No reason to bust yoru budget so you can pump gas under a certain logo! There are websites too that can tell you where the cheapest stations are in certain areas, prety cool thing!

    • I never understood the brand loyalty for gas. Half the time, it’s the same stuff. I once watched a gas tanker leave a big name-brand gas station and then pull into a little independent who was 15 cents cheaper!

  3. We pretty much stick with the same gas station chain (QuickTrip). Their places are very clean and they always have competitive gas prices as they’re mostly located in populated areas which have high competition. The grocery store we shop at just built a gas station though and will be implementing a rewards system next week where you can save $.05 or $.10/gallon. I’m not sure how it works exactly, but we’re going to try it out.
    Jason @ WorkSaveLive recently posted..Sausage Chili RecipeMy Profile

  4. Gas stations attached to grocery stores tend to offer deeper discounts with ‘loyalty’ programs, I’ve noticed as well. I believe there is a website called Gas Buddy (or some such) where one can input their zip code and receive the latest gas quotes for specific neighborhood blocks, in order to quickly compare and contrast price differences. Clusters of stations within a vicinity definitely are more reasonably priced!

  5. Doesn’t anybody use a smartphone app like WhatGas?
    I find it’s very useful when away from home for a.) finding a station in the first place, and b.) saving me looking round and comparing prices while driving, hoping for a cheaper rate.
    Last Summer when I went on holiday, it worked a dream. I checked our route, planned where to fill up, and it was the cheapest place we saw on our entire 200 mile journey 🙂

  6. Good tips, I use GasBuddy on my phone to find the cheapest stations around. Some people around here drive way out into the country to the reservations to buy gas because they can sell it without all the taxes added on to the price. I have to think you lose any savings by driving all that extra distance, but if you live in the country around here its a pretty good setup.

    • Depending on the taxes in your area, that could be a considerable savings. I wouldn’t go out of my way to save 3 cents per gallon, but 30 cents? That would be like getting a free gallon of gas when I filled up!

  7. Pingback: Friday recap, home alone and seven new friends!

  8. Pingback: The Round Table – December 7, 2012 — MoneySmartGuides.com

  9. Pingback: December 7th 2012 Blog Update | Modest Money

  10. Pingback: The Round Table - December 7, 2012 - MoneySmartGuides.com

Comments are closed.