For years, I’ve listened to reporters say that gas prices go up in the summer due to the switch to summer gas. That made me wonder why we switch to this more expensive gas and whether not switching would reduce gas prices. It turns out that summer gas is actually a very useful thing. Please excuse any errors – I’m not a scientist.

What Is Summer Gas?
All gas is a blend of oil and various additives. There are actually numerous blends, so my summer gas may not be the same as your gas. Whatever the individual components, summer gas is primarily intended to reduce smog. Summer gas contains less butane, which results in a higher evaporation point. The gas itself only costs slightly more, but refineries must buy a large supply of gas in order to make the switch, which causes a spike in prices.

Why Can’t We Use Summer Gas Year-Round?
We don’t use it year-round because engines using summer gas are difficult to start in cold weather. We don’t use winter gas in the summer because it’s less efficient in hot weather and produces more pollution at high temperatures.

What Happens If We Use Winter Gas in the Summer?
Aside from the fact that the stored gas could set your house on fire, you’ll also waste more gas if you use it out of season. Because winter gas evaporates faster in hot weather, you’ll get less of it from the same quantity of summer gas. In addition to wasting money, you’ll also pollute more. I think we can all agree that cleaner air is a good thing.

In summary, summer gas costs marginally more, but it saves money in the long-run because it burns more efficiently when it’s warm outside. Instead of trying to find, or hoard, winter gas, employ other gas-saving measures to reduce your fuel costs. Now that I know the reason for the two different kinds of gas, I will stop whining about the higher cost of summer gas (but not about the cost of gas in general.)

Sources: Slate Magazine and The Oil Drum

Gas is officially over $4 at some L.A. gas stations. I’ve also noticed some stations holding the line at $3.99 for regular, while prices continue to shoot up for the two higher grades. My station hasn’t yet reached that point, but I can feel it coming. Since I can’t afford to buy a Prius just yet, here are my twelve tips to help you save money on gas.

Buy a Hybrid
If you’re in the market for a new car, consider a hybrid. Hybrids usually cost a few thousand more, but with gas prices continuing to rise, the increased cost may be balanced out by fuel savings in just a few years. According to Edmunds.com, the 2008 Prius costs .54 a mile over five years. That’s actually one or two cents higher than you’d get with a Corolla or a Mazda M3 (non-hybrids), but I’m betting that the Prius’ operating cost vs. the other two is lower once you get past that point, or if gas prices continue to rise at their current pace.

Buy a Stick Shift
If you can’t get a hybrid, consider a stick shift. Manual transmissions have historically used less fuel than automatics. In case you’re thinking that you could get both a hybrid and a stick shift, think again. Hybrid cars are almost exclusively sold with automatic transmissions because the technology eliminates any efficiency gains from a manual transmission.

Check GasBuddy.com
Gasbuddy.com is a cool little site that tells you the prices at several local stations. I used it to find the cheapest prices on my route to and from work. If you have to drive more than a mile or two out of your way, then the tool won’t save you much money.

Properly Inflate the Tires
It’s simple, it’s quick, and it’s something few people do. Inflate them to the pressure indicated by your auto manual not the pressure printed on the tire. When your tires are properly inflated, it reduces drag. Don’t overinflate them though; that reduces safety and control. Check your tires once a week before you leave in the morning and stop at the nearest station to fill the tires. If you have access to a home pump, use that.

Use the Lowest Octane Gas

Most newer cars are engineered to operate best on the lowest octane gas. Check the manual for more information. Performance cars and ultra-luxury cars may need higher grades, but if you’re driving one of those, then saving money probably isn’t a big concern for you.

Don’t Warm Up the Engine
Most newer cars don’t need to be warmed up for more than thirty seconds. Try not to be a speedster for the first few minutes, but you don’t have let it sit for five minutes. The exception is very cold weather, in which case you might need a few extra minutes to warm up.

Turn Off the Engine When Idling
By idling, I mean sitting in the driveway or parking lot waiting for someone. If you’re going to idle the car for more than thirty seconds to a minute, then keeping the car running wastes more gas than turning it off and restarting it. If you want to leave it on because it’s hot outside, get out of the car and go inside to wait.

Avoid Hard Acceleration/Hard Braking
In short, don’t drive like a NYC cab driver. Have you been in one of those? You’re practically pinned to the seat while they accelerate, and then thrown forward while they brake. All that wastes a lot of fuel. Instead, accelerate slowly and try to coast to a stop. Apply the brake lightly if you must. I’ve found that I can’t coast to a stop because my car holds the speed for too long, but I can accelerate slowly from a green light and catch up to the cars ahead just as the next light turns green.

Drive Slow
If you’re commuting, you have to do this anyway, but driving slower than 65 MPH will save fuel. Less than 40 MPH is ideal, but obviously you can’t do that if the rest of the traffic is going 70.

Use the AC Wisely

If you’re driving in city traffic, either open the windows or use the fan only. Use the AC as sparingly as possible. If driving at highway speeds, open windows actually produce more drag, so use the AC instead.

Avoid Driving
Avoid driving whenever possible. Many urban dwellers are switching from cars to busses or subways. That’s not really feasible for many people in Los Angeles, but people in other cities can do it. I also try to drive less on the weekend. At this point, I drive less than 8,000 miles a year.

Plan Trips Ahead
For example, I group most of my errands into one outing and plan my route for the simplest loop. My grocery loop is actually very inefficient, but necessary to save the most on groceries. Even then, I don’t drive more than four miles, total, and incorporate three stops. If I just need to pick up one thing, I walk.

It’s easy to save money on gas if you make simple modifications to your driving habits and consider your next car purchase carefully. You can also set aside more money for gas by reducing other car expenses. As much as I wish it weren’t true, I doubt gas prices are every going back down to what they were five years ago. That makes me and my budget sad, but hopefully it will spur us all to make the planet happier.

It’s nearing the time when I’ll have to buy a new car, so I’ve been comparing fuel economy ratings on various cars. Some of the estimates are much lower from the original mileage estimates for my current car, which seemed odd. Then I remembered that the EPA issued new gas mileage ratings. I looked into the reasons for the change and what the new numbers mean.

Why the New Gas Mileage Ratings?
The old Highway and City mileage ratings used for cars manufactured before 2008 were developed in the 1970s. Cars and driving habits have changed a lot in the last 30 years, so additional tests and factors were added to more accurately reflect modern driving habits.

New Gas Mileage Tests
According to the EPA’s 2008 mileage guide, ratings represent the following driving experiences:

  • City: “urban driving, in which a vehicle is started in the morning (after being parked all night) and driven in stop-and-go traffic.”
  • Highway: “a mixture of rural and interstate highway driving in a warmed-up vehicle, typical of longer trips in free-flowing traffic.”

In addition, they’ve added tests for:

  • More aggressive driving (rapid acceleration, higher speeds, and hard braking)
  • Driving at high speeds
  • Air conditioner use on a hot day
  • Cold weather city driving.

The new window sticker still shows city and highway ratings, but it also indicates a mileage range.

What It Means for You
If you already own your car, then the new ratings don’t mean much to you. If you’re buying a new car, then they mean a lot. You can’t simply compare the mileage of your old car with the mileage on the new stickers. If you have car from 1985 or later, you can compare the old MPG estimate with the new one. For example, my 1997 Corolla was originally labeled at 27 city and 34 highway. The adjusted estimate is 23 and 31.

Some cars fare well under the new standards, but hybrids took a big hit on gas mileage estimates. The 2007 Toyota Prius originally tested at 60 city and 51 highway. The new estimates for the same car are 48 and 45. That’s still very good mileage, but not nearly the mileage people expected to get.

Of course, actual mileage will vary, but the new estimates will give you a much better idea of what you can expect from your new car. By comparing new car stickers with the revised estimate for my Toyota, I can also get a better idea of whether the new car will improve my gas mileage and reduce my fuel costs.

I’ve never leased a car, nor have either of my parents. We simply don’t believe in it. I’m fortunate that my husband agrees. I do have friends who lease, though. I ran the numbers to compare the costs. Which is better: leasing or buying a car?

Arguments for Leasing
I polled my friends who lease and these are their reasons:

  • A car is not an investment
  • They’re able to drive a nicer car than they can afford
  • They don’t have major maintenance costs.

I can see the point of some of these arguments, but I have some counterarguments:

  • No, a car isn’t an investment, but that doesn’t mean you should throw money away on it.
  • I don’t need to drive a nicer car than I can afford, and most of my friends don’t care about cars.
  • It’s true that new cars don’t need major maintenance, but maintenance costs over ten years really aren’t that high if you buy a good car.

Arguments for Buying:
There are many arguments for buying a car, but these are three I consider the most important:

  • No more payments after the loan is paid off. You can save or invest the money instead.
  • Maintenance after the warranty expires is much cheaper than a lease.
  • If you ding the car, you don’t have to worry about it.

Lease vs. Buy – Cost Comparison
The most important factor, at least for me, is the total cost over a ten-year period. That’s about how long I keep a car (although I’m currently at 11 years.)

I used a leave vs. buy calculator to compare the costs for a $25,000 car. Even with a lease, you have to pay interest (although not on the total value of the car, only on the amount you’ll use up.)

Leasing:
Down payment: $1,000
Term: 36 months
Interest rate: 8%
Other fees: $100
Residual value at return: 60%
Deposit: $500
Total cost over three years: $14,852.98

Buying:
Down payment: $1,000
Term: 36 months
Interest rate: 8%
Other fees: $100
Total cost over three years: $28,187.43

At first, buying looks way more expensive, except that once those three years are up, you own the car outright. Other than maintenance, there are no more expenses to pay. Let’s say that maintenance averages $1,500 a year. In the early years, you’ll only need oil changes, but after a while you’ll need new brakes, tires, and struts. So, figure about $10,500 in maintenance in the remaining seven years, less if you follow my tips for reducing car expenses. That brings the total cost of owning the car to $38.687.43.

With a lease, you need to get a new lease at the end of those three years. Over the same ten-year period, leasing a car would cost at least $49,509.93. When you factor in the rising cost of cars, you’ll have to pay more each time you get a new lease in order to maintain the same quality car. That will bring the total cost well over $50,000.

In summary, leasing will cost you at least, $11,000 more over a ten year period. If you buy a car that holds its value and doesn’t need to go to the shop a lot, you’ll save more. The residual value of the car can be used towards your next car, or sold for cash, while a lease leaves you with nothing. You have to come up with new cash for your next down payment.

In addition to using a Goodyear card to reduce my car expenses, I have a few other ways of keeping my car costs down. As I mentioned yesterday, Goodyear sometimes offers a “12 months same as cash” offer. I learned Saturday that they’re offering it now through April 5. The manager made sure to remind me that the finance charges will apply if I don’t finish paying the bill before the 12 months was up – that’s what I call good service.

And now, without further ado, here are my nine tips for reducing your car expenses.

Follow the Recommended Maintenance Schedule
Although auto shops want you to change your oil every 3,000 miles, most newer cars don’t need service nearly that often. My eleven-year-old car requires service every 5,000 miles or four months. Because I only drive 8,000 miles a year, I go in for service every four months, more often if your dealer recommends it because of where you live. To keep your car in good condition, I would use the lower of either the mileage or time recommendation as a guide for service. By going three times a year instead of four, I save $20 a year on maintenance.

Don’t Delay Tune-Ups
When I was younger, I delayed my 30,000 mile tune-up because I was poor. I later learned that delaying my tune-up and other maintenance probably actually added to my car expenses because the car ran less efficiently. I don’t delay my tune-ups anymore.

Buy Tires at Costco
If you have a Costco membership, then this is the best place to buy your tires. Not only are they discounted, but they have an insanely good warranty (for free). I’ve tested the warranty several times, because I have very bad luck with tires. I’ve gotten a nail stuck in my tire, and they replaced it with a new tire for $1. I had a tire that was losing air, and they replaced it for free. The downside is that there can be a long wait, so if you get your tires on a Saturday, I recommend arriving the minute the tire shop opens, and then going inside to do your Costco shopping (with a list, of course.)

Keep Tires Properly Inflated
If your tires are under-inflated, you’ll burn more gas. If your tires are over-inflated, you have less control of the car. Accidents are costly.

Don’t Get Service at the Dealer
My husband insists on getting service at the dealer, even though his car is out of warranty. I insist he’s throwing money away. We haven’t worked that one out yet, but I always go to Goodyear. They know how to work on most cars and have the same equipment. What they don’t have are overpriced factory parts and overpriced labor. I save at least 50% on tune-ups, and nearly 70% on struts, brakes, and other routine maintenance costs. I also save on major service. For example, this weekend I took my car in because it was making a bad sound. They said I need to replace the wheel hub bearings, at a cost of $831.40. Toyota would charge me $1260.

Get a Second Opinion
If a mechanic recommends a major service that doesn’t sound reasonable to you, take it to another mechanic to have it checked out. You could just go in and say you hear a strange sound from under the car and see what they recommend. Just make sure it’s a mechanic with a good reputation for honesty. I want to get a second opinion on my wheel hub bearings, although it seems reasonable that a car with 116,000 miles might need that. I was considering taking my car to Toyota, but they want to charge me $99 just for the inspection.

Keep Your Car At Least Ten Years
Of course, this only applies if you have a good car. My first car was a Pontiac built by Isuzu. It was also a former rental. I will never buy any of those again. I only kept the car for five years because by the end it had developed the annoying habit of stalling at on-ramps and red lights, and overheating the brakes. It was replaced by a brand new Toyota. (I had a friend at the dealer who got me a very, very good deal and financial help from my Dad.) The loan has been paid off for six years now. I haven’t had any major issues, like the transmission or the engine blowing.

Replace Old Gas Guzzlers or Cars that Break Down Often
If you have an old car that is unreliable or guzzles gas, then I would consider replacing it with a late-model used car that gets good mileage and has a good safety and reliability record. Personally, I would stick with Japanese cars. I’ve compared gas mileage between Japanese and German cars and Japanese cars definitely get better mileage. I haven’t considered American cars. I know it seems counter-intuitive to save money by buying a different car, but if your car is in the shop every other week, belching smoke, or only gets 15 miles to the gallon, you’re spending far more to keep that car than you would if you bought a more reliable, fuel-conscious car.

Buy Late Model Used Cars
Late model used cars tend to be leased cars. They’re better than rentals because leases have to be return in excellent condition and have mileage limits. I might consider buying my next Toyota or Honda new, because they hold their value well, but if I can find a good former lease, I’ll buy it. By buying a car that’s a few years old, you not only avoid the immediate loss in value, but you also have lower insurance and registration costs, both of which are car expenses you don’t consider on a daily basis but that do add up.

If you use these nine tips to reducing car costs, you could save thousands of dollars in maintenance, insurance, and car payments. Do you have other tips to reduce car expenses?

I drive a Toyota with over 100,000 miles on it and it still runs great, but obviously a car with that many miles has also needed a lot of routine maintenance over the years. I’ve had to replace the tires, brakes, struts, belts, starter, and a few valves and sensors. Nothing major or unusual, but auto repairs can get expensive even if you expect them.

A few years after I bought my car, I discovered a great way to manage my car repair and maintenance expenses: the Goodyear card. After I took my car to Toyota for my 30,000 mile tune-up, I never made the mistake of getting maintenance at the dealer again. I’ve only visited them for recalls, dealer specific license plate screws, and brake lights (which they swapped out for free. Sometimes it pays to be a girl.)

Instead, I go to Goodyear. In addition to selling tires (which I actually get at Costco), they license Goodyear Gemini repair shops. I’ve found that Goodyear mechanics are reasonably-priced and honest, unlike Midas or Jiffy Lube. The card includes discounts and an interest-free billing program.

Working the Goodyear Card Billing Cycle
If you use your Goodyear card, you get a discount on your oil change. Just mention that you’re a cardholder when you bring the car in. You also usually get “90 days same as cash” terms on all repair bills. That’s either two or three billing cycles, depending on when you got the service and when the payment is due. For a very large charge, I once got “12 months same as cash.” Some of my statements have also included coupons for that deal. Here’s the trick: the interest does accrue from day one (and it’s a high rate), but it isn’t applied if the balance is paid off within 90 days. All the interest is added on day 91.

To stretch out your payments into equal amounts without earning interest, look at the charge date and count 90 days forward. Now check the bill due date. Let’s say you got service March 1. That means the last payment must be received by May 28 to avoid interest. If your bills are due on the 22nd, you can pay one third in March, one third in April, and one third in May. On the other hand, if you made the charge March 21, then the last payment would be due June 19. That means you can pay half in April and half in May.

Certainly, if you have the cash to pay the whole bill, you could do that, but if they’re going to let you pay over time for free, why not let the money sit in your savings account a little longer?

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