5 Tips: Saving money on your car April 7, 2004: 1:42 PM EDT
By Gerri Willis, CNN/Money contributing columnist
NEW YORK (CNN/Money) -
You're not alone if you've been in sticker shock at the gas pump lately. In fact, the AAA says the current national average for regular gas is a record $1.77 per gallon.
Nonetheless, Americans continue to purchase larger, less fuel-efficient vehicles and are driving more. So what can you do to save both gasoline and money? Here are today's five tips.
1. Don't be a gas guzzler.
According to the latest statistics from the U.S. Department of Transportation, Americans drive an average of 29 miles and spend some 55 minutes a day in their vehicles.
CNNfn's Gerri Willis shares five tips on how to save at the gas pump amid rising gas prices.
Add to this the fact that the national average for vehicle fuel efficiency is 24.4 miles per gallon, which is the lowest since 1986-1987 when the average for all passenger cars was 25.9 miles per gallon. Meanwhile, 65 percent of U.S. households own two or more vehicles.
With this being the case, driving more sensibly can help you conserve gas during this time of high prices. www.fueleconomy.gov says aggressive driving, such as speeding and rapid acceleration and braking wastes gas. It can lower your gas mileage by 33 percent when driving at highway speeds and by 5 percent when cruising around town. In fact, this 5 to 33 percent is equivalent to gasoline savings of 7 cents to 49 cents a gallon.
Observing the speed limit can also help. Gas mileage decreases quickly at speeds above 60 mph. Each 5 mph driven over 60 mph is like paying an additional 10 cents per gallon. Using cruise control on the highway helps maintain a constant speed that can help you save gas.
If you anticipate being stopped for more than one minute, your best bet is to shut off the car. Simply restarting the car uses up less fuel than just letting it sit with the engine on.
Try to consolidate trips and errands you need to make to cut down on the driving time. Also, take the time to clean out that trunk. The heavier the load in your car, the more gasoline used.
And with the summer upon us keep in mind using the air conditioner sparingly. The A/C puts more force on the engine, forcing more fuel to be used -- about 20 percent more.
2. See if it's time for a tuneup
The next step is to take responsibility for the car itself. Fueleconomy.gov says fixing a car's engine that is out of tune or has failed an emissions test can improve its gas mileage by an average of 4.1 percent. Make sure to have your vehicle serviced immediately if a "check engine" light appears on the dashboard.
Fueleconomy also says replacing a clogged air filter can improve your car's gas mileage by as much as 10 percent. That 10 percent is equivalent to nearly 15 cents a gallon in gasoline savings. A car's air filter keeps impurities from hurting the inside of the engine.
Also, keep an eye on the tires. By keeping tires inflated at their proper pressure you can improve gas mileage by about 3 percent. This is equivalent to a savings of up to 5 cents a gallon. Check with the manufacturer of your vehicle what the recommended tire pressure is.
You also want to have the right grade of motor oil. Different vehicles need different grades.
Finally, try to keep track of the gas mileage for your car. If you notice you're going through gas much more quickly than usual, your vehicle might not be operating at top performance.
3. Cruise the Web
Now that you know how to better treat your car in order to save gas, we're going to tell you how to use the web to research the current gas environment and save money.
www.Fuelgaugereport.com is where the AAA gives consumers a reading of the current national averages.
www.fuelcostcalculator.com is the Web site where AAA helps you calculate the estimated fuel cost of a particular trip. On this site you can plug in your starting city and destination, plus your vehicle make and model. The site will then calculate how many miles the trip is, approximately how many gallons of gas you will use and about how much it will cost.
Autos
36 month new
6.90%
48 month new
7.05%
60 month new
7.11%
36 month used
7.39%
For example, driving from New York City to Miami, Florida in a 2003 Ford Explorer will cost you approximately $125 for gas. You will use about 67.68 gallons on the 1,286 mile trip.
But no need to go into sticker shock just yet. There are also sites available to help consumers find the best deals in their area. Through www.gasbuddy.com you can log onto more than 170 Web sites around the U.S. and in Canada that help consumers find cheap gas prices. Each site has a live forum for consumers to post local low and high gas prices they have found.
For example, click on New York and you are connected to NewYorkGasPrices.com, BuffaloGasPrices.com, AlbanyGasPrices.com, etc. Click on Texas and AustinGasPrices.com will pop up as well as DallasGasPrices.com and HoustonGasPrices.com. Gasbuddy says there are 90,000 stations entered per week on its sites. Gasbuddy also points out that gasoline prices change frequently and may vary by as much as 20 percent within only a few blocks.
Take the Ford Explorer XLS for example. Its fuel tank holds 22.5 gallons. Currently, on NewYorkGasPrices.com, the cheapest gas in town is $1.75/gallon. Fill the Explorer up and it will cost you $39.37. Meanwhile, the most expensive gas we found is $2.17/gallon. This would cost you $48.82.
On each site consumers can see the average price for that particular city in comparison to the national average. There is also an indication of what the trend is for gas prices. Are prices set to rise more? Or are they on a downturn?
Jason Toews of Gasbuddy.com says you are likely to find different trends in different cities. Therefore, if the trend is for gas prices to go higher, you may want to fill'er up sooner than later.
AAA says once you are at the pump, if your vehicle's engine does not need premium fuel, using anything other than regular is simply a waste of money.
One last point: while you want to keep your eyes open for low fuel prices, don't waste gas driving to a gas station several miles away just to save a few cents. Use your common sense.
4. Weigh the costs
According to AAA spokesman Robert Sinclair, there are several reasons for the recent spike in gas prices.
Among them is the record high price of crude oil. About one month ago, a barrel of light sweet crude hit a 13-year high of $38.50, intraday. Crude oil prices are currently trading around $34 a barrel.
The second reason is that we are seeing major consumption by consumers as the economy expands and more and more cars hit the road. And finally, there is not enough refinery capacity to keep up with demand.
Nonetheless, fuel is an important part of the total cost of owning a vehicle, and conservation should be an important factor in choosing a new car. Take a look at this: Fueleconomy.gov says the difference between a car that gets 20 miles per gallon and one that gets 30 miles per gallon amounts to $1,500 over a 5-year period. (Assuming a fuel cost of $1.50 per gallon and 15,000 miles per year).
Fueleconomy.gov has gas mileage estimates for several makes and models. On the site you can find the fuel economy leaders and losers for both automatic and manual transmissions.
For example, among automatic transmissions: the 2004 Honda Insight, which is a hybrid, gets 57 miles per gallon. Two other hybrids are among the top performers. The Toyota Prius comes in at about 60 miles per gallon. And the Honda Civic gets about 48 miles to the gallon.
Moving on from the hybrids, the Mini Cooper ranks high at 25 miles per gallon and as far as those thirsty sport utility vehicles, the Toyota RAV4 tops the list at 24 miles per gallon.
The least fuel-efficient cars include the Lamborghini L-147 Murcielago which gets only 9 miles per gallon, while the Audi S4 Avant rakes in just 15 miles. Drive the Mercedes-Benz E500 Wagon and you'll find you get 16 miles per gallon. As far as the SUVs go, the Land Rover Range Rover is the least fuel-efficient with 12 miles to the gallon.
Nonetheless, even as we outline these numbers, consumers do not appear to be scared away just yet. According to a recent survey (March 2004) by CNW Marketing Research, about a third of consumers would consider "eventually" buying a more fuel-efficient vehicle if gas prices hit $3.25 a gallon. But not until gas spiked to $3.75 a gallon would a third of those surveyed say they would "immediately" purchase a more fuel-efficient car.
5. Get the tax deduction
The government is willing to pay you to conserve gas and become environmentally friendly.
Under current law, the owner of an IRS certified hybrid vehicle may deduct $2,000 for the year the vehicle is first used. The hybrids that currently qualify are the Toyota Prius (model years 2001-2004), Honda Insight (model years 2000-2004) and the Honda Civic Hybrid (model years 2003 and 2004).
Taxpayers must use Form 1040 to claim this deduction. They should put "Clean-Fuel" and the deduction amount on the dotted line to the left of line 33. The IRS also points out that qualifying individuals who did not claim the deduction when they originally filed may claim it on an amended return (Form 1040X). Generally, taxpayers may amend returns up to three years from the original due date.
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However, keep in mind, this current law is scheduled to expire in 2007 and will slowly phase out between 2004 and 2006. So the deduction will drop to $1,500 this year, in 2005, to $1,000 and by 2006, $500. Congress is currently considering further legislation on hybrids.
In addition, individual states offer incentives and rebates to owners of hybrid vehicles. For more information log onto www.ott.doe.gov/hev. This is the site for the Hybrid Electric Vehicle Program sponsored by the U.S. Department of Energy and the big three automakers. Also log onto www.IRS.gov.
And, while much harder to come by, if you own an electric vehicle, you may qualify for the Electric Vehicle Credit. If the car was purchased in 2003 you can claim 10 percent of the vehicle's cost as a credit on your 2003 tax return, up to a maximum of $4,000. For 2004, this will be reduced to 7.5 percent or a maximum of $3,000. The IRS has no further guidance beyond this year.
Gerri Willis is the personal finance editor for CNN Business News. Willis also is co-host of CNNfn's The FlipSide, weekdays from 11 a.m. to 12:30 p.m. (ET). E-mail comments to 5tips@cnnfn.com.