Is Costco Membership Worth it for Gas Alone?

I grew up in Kansas, but have lived in San Diego for the past four years. Instinctively, I knew gas prices would be more expensive in California. No matter, I thought. My Costco membership card might just dampen the blow from gasoline costs. But I had my doubts.

Is a Costco membership worth it for gas alone? I decided to put this to the test in San Diego. There are a few factors that could sway your decision, including how many cars you have, how often you drive, and how many miles you drive in a given week.

Here’s what you need to know on whether a Costco membership is worth it for gas alone.

How much does a Costco membership cost?

First, let’s take a look at what an annual Costco membership costs. The Gold Star membership fee is $60 for the year, which is Costco’s baseline package. Upgrade to the Gold Star Executive card for $120 and you can receive 2% back on most purchases (up to $1,000 a year).

The kicker? The Gold Star Executive rewards program doesn’t apply to purchases made using Costco’s gasoline services. If you want to buy a membership card based solely on getting a gas discount, you should opt for the regular Gold Star membership.

What is the cost difference between Costco gas and a regular gas station?

You probably came to the conclusion that Costco creates a Kirkland Signature brand for every brand-name equivalent. Costco gas is no different. According to a Mashed article, Costco is able to sell gas below the market price because it means more trips inside the stores from members who are swinging by to fill up their tanks.

To put this to the test, I called my local Costco and asked what the going price of gas was today. Regular unleaded gas was priced at $3.29 per gallon. Subject to change, of course.

Then, I called up a Mobil gas station, just two miles down the road from Costco. The cost of gas was $3.99 per gallon if you pay in cash or $4.19 per gallon if you pay with a debit or credit card. It had me thinking, what was the price difference between Costco and Mobil if you filled up at each one for a month?

For this example, I’ll use a car that can hold 12 gallons of gas and factor in at least three full fill-ups per month.

Costco membership
Costco Gold Star membership cost per month $5
Costco gas price per gallon (unleaded, paid with debit or credit card) $3.29
Number of gallons per fill-up 12
Number of fill-ups per month 3
Total cost $123.44
Mobil gas station example
Mobil gas price per gallon (unleaded, paid with debit or credit card) $4.19
Number of gallons per fill-up 12
Number of fill-ups per month 3
Total cost per month $150.84

Talk about a whopper of savings. Even when you factor in the annual membership broken down each month, you still save nearly $27 a month in gas. Though you’ll need to consider other factors before jumping on the bandwagon.

Other factors before you head to Costco

While you most likely can save money fueling up at Costco, it may not be the best fit. You might not have a Costco close by to make it convenient to fill up each time. Plus, Costco gas tends to be more popular in high cost of living areas, which means longer wait times. I once waited 20 minutes in the Costco gas line. You’d think Costco was giving it away for free in Southern California.

Consider how often you drive your car, too. The average one-way commute time is just over 26 minutes, according to the United States Census Bureau. If you work from home or live within walking distance to several points of interest, it may not make sense for you to throw down $60 bucks on a Costco membership just for gas.

And what if you have multiple cars? Multiple cars mean multiple trips to the pump. A Costco membership could look really good when you factor in several cars (since the price of joining Costco comes with a card for your spouse).

Yes, Costco makes sense just for gas

This is a huge resounding yes for me when it comes to getting a Costco membership for gas alone. Especially if you live in a high cost of living area. In the example above, you could recoup the cost of a regular Costco membership after two months with gas savings alone. The cost savings could fuel your next vacation. At nearly a $1 difference between Costco and Mobil, it makes sense to fuel up with Costco.

–By Justine Nelson

Source: pennypinchinmom.com