Buying Gas at Costco Could Save the Average American More Than $100 Per Year

Among the other perks of membership, such as the ability to shop in its warehouse clubs, Costco membership allows you to buy gas at its stations.

It's well-known that gas at Costco is typically cheaper than that sold by typical stations in the same area. But how much can the average driver save by purchasing their gas exclusively at Costco? Here's a breakdown of the savings, and how you might be able to save even more.

How much cheaper is Costco gas?

The first variable in the equation is how much cheaper Costco gas is than non-warehouse club gas stations. And the short answer is that it depends on who you ask.

Most reports indicate that Costco is roughly $0.20 cheaper per gallon than the typical gas station in the same area. According to the head of petroleum analysis at popular app GasBuddy, gas prices at warehouse clubs like Costco tend to range from $0.05 to $0.25 less per gallon. And Costco tends to be cheaper than other warehouse clubs. In fact, Costco has won GasBuddy's Low Price Award for four consecutive years.

Separately, an analyst from Barclays found that Costco gas was $0.37 cheaper on average after examining 15 major metropolitan areas.

The bottom line is that the exact difference likely depends on the geographic location of the particular Costco, the prevailing gas price in the area at the time, and other variables. But virtually every expert has found that Costco gas is significantly cheaper. For the purposes of this discussion, we'll use a $0.20 figure, although your Costco membership could potentially save you even more in some cases.

How much could the average American save per year?

The other key variables are how much the average American drives in the typical year, as well as the fuel economy of the typical gas-powered vehicle.

According to the Federal Highway Administration (FHWA), the average driver travels 13,476 miles on U.S. roads per year. And as of the latest full year with finalized data (2021), the average U.S. vehicle gets 25.4 miles per gallon.

So, let's put these together. Based on the average mileage and fuel economy, the typical driver buys about 531 gallons of gasoline annually. Based on an estimated savings of $0.20 per gallon, this means that the average American could save $106 by purchasing their gas from Costco.

It's also worth noting that the savings could be even greater if you use a Costco Anywhere Visa® Card by Citi to pay, which gives 4% back on all gas purchases (in the form of Costco rewards), whether you buy it at Costco or another gas station.

How much could you save?

Keep in mind that this is just the average American driver's savings. There are several factors that could result in you saving more or less than the $106 annual average:

• This assumes only one vehicle fueled by Costco gas. Most American households have two vehicles, so if two drivers are fueling their cars at Costco, you can double the savings.
• The average also assumes you're only buying gas at Costco, which might not be practical. For example, if I'm on a long road trip, it may not be practical to find the nearest Costco to refuel my tank. The same can be said if I need gas at night, after Costco's pumps close.
• There's also the cost of membership to consider. A basic Costco membership is $60 per year, which can easily pay for itself through other Costco purchases and benefits. But if you're planning to use it only for gas, be sure to take the membership fee into account.
• Finally, the $106 average is for the average driver. If you drive more than the average American, your savings could be higher. And if your vehicle gets better or worse gas mileage than the average, it will affect your savings as well.

Does cheaper gas justify a Costco membership?

The bottom line is that the money you save on gas at Costco can be a big perk of membership. When combined with all of the other savings and benefits of Costco membership, the $60 basic membership fee can be a steal for American consumers and a boon to their personal finances.