How Much Cheaper Is Costco Gas? Enough to Pay for a Membership

If you're a Costco member, you probably know that members line up after shopping at the warehouse club's stores to fill up their tanks. Many members even go out of their way to use Costco's gas station rather than stopping at whatever station is closest to home.

But how much could you really save by filling up your car at Costco? Is it enough to cover the entire cost of membership all by itself? Here's the answer.

How much do Costco memberships cost?

There are two types of Costco memberships for individuals. The basic membership (formally known as the Gold Star Membership) costs $60 per year. The upgraded Executive Membership has an annual price tag of $120 and has a few additional benefits, such as a 2% annual reward on eligible Costco purchases.

How much can you save filling up at Costco?

Of course, it depends on a few factors, such as the price of gas in your area, the mileage you drive each year, how many drivers there are in your household, and the fuel economy of your vehicle.

However, let's look at what the average driver could save. Most reports seem to indicate that Costco gas tends to be about $0.20 less on average than traditional gas stations in the same area, although there are reports that estimate the savings at nearly double this amount. To be conservative with the analysis, we'll use $0.20 per gallon in savings.

With the average driver covering about 13,500 miles in the average year and getting approximately 25 miles per gallon, the typical driver can expect to save a little more than $100 per year.

If you have two drivers in your household, you can double the potential savings. And if you have a vehicle that gets worse-than-average fuel efficiency or if you drive more than the average American, your savings could be even greater. Last but certainly not least, if you use the Costco Anywhere Visa® Card by Citi to pay for your gas, you could save even more.

A few caveats, but the answer seems to be yes

The short answer to whether Costco gas savings can justify the cost of a membership is yes. But there are a few things to keep in mind.

Most significantly, this analysis assumes that you only fill up your gas tank at Costco, which may not always be practical. It would certainly make sense for most of your fuel needs if you live down the street from a Costco warehouse club, but if you live across town, it might not make sense for each and every fill-up. And if you take long road trips often, it may not be convenient to find a Costco to fill your tank wherever you are. So, while you can save hundreds of dollars by filling up only at Costco, you need to decide if it's practical to do so.

Also, as mentioned earlier, your own driving habits and vehicle need to be taken into consideration. For example, if you drive as many miles as the average person but have a highly efficient car that gets 50 miles per gallon, your annual savings will likely be closer to $50. That's not quite enough to justify the cost of a membership based on gas costs alone, and also not a lot to stick in your savings account.

The bottom line is that every situation is different. But some basic math shows that the average American driver could justify a basic (Gold Star) Costco membership through gas savings alone, even if they don't fill up at Costco 100% of the time. And a two-driver household could even justify an Executive Membership by filling their tanks at Costco most of the time.