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This past weekend I was interviewed by a reporter from a Texas radio station about ways to save money at the gas pump. That interview prompted me to write about 25 Ways to Save Money on Gas. Coincidentally, at the same time the presidential candidates were slugging it out over whether the government should implement a federal gas tax ‘holiday’ this summer.

The feds levy a tax on gas equal to $0.184 per gallon (tax on diesel is $.0244). Each of the candidates has a different view on whether the government should suspend the gas tax during the summer months when families criss-cross our fine country in search of the largest ball of twine (at least that’s what we did when I was a kid). Let’s check out each of their views, and then you can cast your vote to choose which proposal you think is best.

Senator Clinton, McCain and Obama’s Gas Tax Proposals

In short, here are each of their proposals on the gas tax holiday:

Senator Clinton: She proposes suspending the federal gas tax from Memorial Day to Labor Day and imposing a ‘windfall’ tax on big oil companies to pay for it.

Senator McCain: He proposes the same suspension of the federal gas tax, but he wouldn’t tax the oil industry to pay for it.

Senator Obama: He believes we shouldn’t suspend the federal gas tax because we need the revenue to fund construction projects for roads, bridges and other infrastructure.

Now what’s become more interesting than the proposals is the candidates’ remarks about their opponent’s proposals. Senator Clinton, for example, said that Senator Obama is out of touch with the economic realities faced by ordinary citizens:

[The federal gas tax holiday] might not mean much to my opponent, but I think it means a lot to people who are struggling here, people who commute a long way to work, farmers and truckers.

Senator Obama shot back saying,

We’re arguing over a gimmick that would save you half a tank of gas over the course of the entire summer so that everyone in Washington can pat themselves on the back and say they did something.

A McCain spokesman said that Senator Obama “does not understand the effect of gas prices on the economy. Senator Obama voted for a gas tax reduction before he opposed it.” This last point is a reference to the fact that as a state representative, Senator Obama voted at least three times in favor of temporarily lifting the state’s 5 percent sales tax on gasoline.

But the best one-liner goes to Senator Obama, who said “let me tell you, this isn’t an idea designed to get you through the summer, it’s designed to get them through an election.”

The Federal Gas Tax Holiday–Yes or No?

In my opinion, Senator Obama is the winner on this issue. First, what do you think big oil will do if the federal government imposes an 18.4 cent ‘windfall’ gas tax on the industry as Senator Clinton has proposed? Hmm, maybe raise the price of gas by, oh I don’t know, maybe 18.4 cents per gallon. Second, gas prices do hurt. But isn’t the answer to drive less, buy more efficient cars, live closer to work, telecommute, and so on? It seems the government is willing to do just about anything to keep us consuming at a breakneck pace (See Tax Rebate Checks). And while smarter money management recognizes the value even in 18.4 cents per gallon, is it really going to make that much difference to our budgets? Is it worth sacrificing the funds we need to repair and improve our country’s crumbling infrastructure?

On this issue, I side with Senator Obama. The federal gas tax holiday is political pandering at its worst. We need solutions to the country’s long-term problems, not temporary feel-good measures. But what say you?

Which federal gas tax proposal do you support?

• Senator Clinton: suspend the gas tax and make big oil pay for it
• Senator McCain: suspend the gas tax without making big oil pay for it
• Senator Obama: do nothing, the gas tax holiday proposal is a gimmick

View Results

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With gas prices nearing $4 a gallon, saving money on gas is more important than ever. Fortunately, there are a lot of relatively simple and inexpensive things you can do to save money on gas. What follows is a list of 25 ways to reduce what you pay at the pump:

Car Maintenance

1. Replace a dirty air filter: According to the Federal Trade Commission, replacing a clogged air filter can increase gas mileage up to 10%.
2. Keep your car’s engine tuned: Having your car’s engine tuned according to the owner’s manual can improve gas mileage by 4%.
3. Get regular oil changes: Clean oil in your car’s engine improves gas mileage by reducing friction. You should also look for oil that says “Energy Conserving” on the performance symbol of the American Petroleum Institute, which contains friction-reducing additives that can improve fuel economy.
4. Keep tires properly inflated: Properly inflated tires can increase your miles per gallon by up to 3%.
5. Use the right motor oil: Make sure you use the proper grade of motor oil, which can save you 1-2% at the pump.
6. Rotate tires and alignment: Rotating the tires for even wear will improve your car’s performance and gas mileage, as will keeping the car properly aligned.

Buying Gas

7. Buy the recommended gas for you car: Most cars run on regular octane gas. According to the Federal Trade Commission, there is no reason to buy a higher grade gas from what is recommended in the owner’s manual. If you want to read more on this, check out the FTC’s Low-Down on High Octane Gas.
8. Steer clear of gas-saving gadgets: You’ve probably read about any number of gadgets that promise to increase your car’s gas mileage. Most of these gadgets don’t deliver on their promises, and some can even harm your car. For more information on these gadgets, you can read the FTC’s “Gas-Saving” Products: Fact or Fuelishness.
9. Find the cheapest gas near you: Check out GasNearU or Gas Buddy to find the least expensive gas in your neighborhood.
10. Use Gas Rebate Credit Cards: There are some credit cards that can save you up to 5% on gas. Three of the best cards in my opinion are the Discover Open Road Card (5% cash rebate on gas and car maintenance purchases), Chase PerfectCard MasterCard (6% rebate on gas purchases first 90 days, 3% thereafter), BP Visa Rewards Card (10% rebates on gas purchases from BP during first two billing cycles, 5% thereafter).

Driving Smarter

11. Keep it under 60: At speeds above 60 mph, miles per gallon start to decrease significantly.
12. Avoid “jackrabbit” starts: Peeling out when the light turns green so you can be the first car at the next red light is like throwing money out the window. Gentle driving can save you up to 5%.
13. Unload: Remove unnecessary weight from your car (no, this doesn’t include your spouse). Lighten the load by 100 lbs. can improve your gas mileage by 2%.
14. Avoid using the roof-rack: Items on top of your car, in addition to weighing you down, increases wind resistance that lowers your gas mileage.
15. Use cruise control: Using cruise control on the highway when it’s safe to do so improves fuel economy.
16. Use air conditioning on highway, not in the city: If it’s hot outside, using the air conditioner on the highway improves gas mileage over rolling down the windows because of the air resistance. But in stop and go traffic, it’s best to let mother nature cool you down.
17. Remove snow tires: Deep tread and big tires consume more fuel. So when winter is over, remove the snow tires for better gas mileage.

Driving Less

18. Telecommute: For many, it’s the commute to and from work that burns the most gas. Telecommuting even one day a week will reduce these costs 20%, will reduce wear and tear on your car, and save lots of time, too. And telecommuting is a great way to start what I like to call slow motion retirement.
19. Work four 10s or nine 9s: If your boss isn’t too keen on telecommuting, maybe he or she will allow you to work four 10-hour days and take every Friday off, or nine 9-hour days and take every other Friday off.
20. RideShare: Join a group of friends or neighbors to carpool to work. This can substantially cut down on gas consumption. And if you live in an area that uses High Occupancy Vehicles (HOV) lanes, it can also get you to work faster.
21. Plan errands: We all have errands to run throughout the week and particularly on the weekends. Combine errands so you have to take fewer trips to get your chores done. In addition saving gas, you’ll also save time and aggravation.
22. Walk or bike when possible: More and more people are riding their bike to mass transit or to work. Evening biking to work one or two days a week will save a substantial amount of gas.

Car and tire buying

23. Buy fuel efficient cars: There are plenty of hybrid and other fuel efficient cars to choose from. In my Best of March 2008 article, you’ll find a link for some of the least expensive hybrids on the market. Another great site to check out is Fuel Economy, a government run website about hybrid vehicles. These cars are the ultimate in money management when it comes to fuel cost.
24. Buy an electric or gas powered scooter: These scooters are commonplace in many parts of the world, and their popularity is growing in the U.S. A Vespa, for example, gets up to 72 miles per gallon and has a top speed of 59 mph.
    
25. Consider fuel efficient tires: Some tires are designed to increase fuel efficiency by decreasing the rolling resistance of the tire. Of course, there are other considerations when buying tires, including traction and handling, but the tires you put on your car can have a significant impact on your fuel economy. The Michelin Energy LX4 is an example of a fuel efficient tire.

If you have other tips on how to reduce gas consumption, please leave a comment.

This week my colleagues and I in the M-Network are writing about the personal finance implications of owning a car. You’ll find posts on whether to buy a new or used car (@ Paid Twice, @ Gather Little By Little), how many cars to own (@ plonkee money), how to buy a car (@ Being Frugal), and even one post that talks about all that plus insurance, maintenance and more (@ Moolanomy). For my part, I wanted to introduce you to a new online car maintenance service called Service Beacon. I signed up for the service, which is free, and here’s how it works.

Read the rest

It’s the small, slow changes of life, the ones that occur a little each day, that are the hardest to see but, in the end, pack the hardest punch. Whether its the extra 50 calories a day we eat or the extra $50 a month we invest, the change is nearly invisible at first, but life-changing in the end. And so it is with inflation.

My grandmother was an avid reader of all things political. I have several of her books, and the other day I began reading Before the Fall: An Inside View of the Pre-Watergate White House, by William Safire. The interesting part of the book for our purposes wasn’t what Mr. Safire, one of President Nixon’s speech writers, had to say, but a 1978 news clipping I found inside the book that my grandmother evidently used as a book mark. The title of the article was “Inflation’s Bleak Prospect: Cars for $89,000 in 2023.” Here are some of the article’s bleak predictions:

If you have a wheelbarrow, keep it. You may need it to haul cash to the supermarket or clothing store to pay for the necessities of life in the not too distant future.