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.
FAQs
But you have to consider that a Costco membership is $60/year. If gas is truly 20 to 40 cents cheaper per gallon, the break even point is between 150 and 300 gallons per year. There are credit cards that give 5% back on gas, and you don't have to search for a Costco and pay for their membership.
Is a Costco membership worth it just for gas? ›
THE ANSWER
Yes, it is worth getting a wholesale membership to save on gas prices.
How much does a Costco membership save you on gas? ›
“You save approximately 20 cents a gallon at Costco over other local vendors,” says David Schwartz, who together with his wife Susan authored “The Joy of Costco”. “That's something we have seen time and time again across the country.”
Do you actually save money with Costco gas? ›
For example, in Bakersfield, California, gas prices ranged from $4.99 per gallon at Costco competitor Sam's Club, up to $5.39 at 7-11 last year. Gas at Costco was among the cheapest options at $5.09 per gallon. That would be a savings of 30 cents per gallon at Costco compared to 7-11, or $4.20 per 14-gallon tank.
How much do you need to spend at Costco to make membership worth it? ›
But if your annual spend regularly tops $3,250, you're better off with the Executive Membership. Every additional dollar you spend after $3,250 will bring your annual fee further and further below $65 and end up saving you money in the long run.
Do Costco members pay less for gas? ›
Price check
Quality gas is important, yes, but so is price. Costco Gas Stations offer consistently low, member-exclusive prices. With the Costco app, you can check Costco gas prices on your phone. On the app, find your local warehouse to see hours of operation, gas prices and more warehouse details.
How much cheaper is Costco fuel? ›
Drivers filling up at Costco will generally save more than £6.50 a tank compared to a supermarket. RAC fuel spokesman Simon Williams said: “Drivers who aren't fortunate enough to be members of Costco will no doubt be horrified to see just how cheaply fuel can be sold.
What is the benefit of getting gas at Costco? ›
Costco gas is offered at a great price
Although the exact amount of savings you'll get varies based on your location and the specific club you're shopping at, you'll typically save around $0.20 per gallon at Costco according to most online reports. Most cars hold between 10.5 and 18.5 gallons of gas.
Is Costco gas cheaper with Costco credit card? ›
When you're buying gas, the Costco Anywhere Visa® Card by Citi is a good card to use because it earns 4% cash back on gas and EV charging purchases on up to $7,000 of spending a year (1% after that).
Why is gas so much cheaper at Costco? ›
So why is it so much cheaper than the competition? The short answer is that unlike pretty much every other retail business that sells gasoline, Costco doesn't care about making money from its gas pumps. In fact, Costco typically sells its gas at a moderate loss.
An executive membership at Costco costs $120 per year, which is twice as much as a basic membership. The primary benefit of the executive membership is scoring 2% back on Costco purchases. Certain purchases don't qualify for cash back, including gas, stamps, and vehicles.
Why do people prefer Costco gas? ›
The fact that gas is cheaper at Costco doesn't mean it's lower in quality. The company offers Kirkland Signature gasoline, which is formulated to improve vehicle performance and fuel economy. Costco says the gas also reduces emissions, making it better for the environment.
Do you get a discount on fuel at Costco? ›
If you're a Costco member, you can save on fuel by refuelling at Costco Gasoline stations. The downside is it does require you to be a member at Costco, but fuel prices are generally significantly cheaper than standard fuel merchants. They also claim to use more environmentally friendly fuel!
What is the number one selling item at Costco? ›
Costco's Kirkland Signature Bath Tissue is the warehouse store's top-selling item, with over a billion rolls sold annually due to its affordability and quality. The second-most popular item is the rotisserie chicken. The delectable roasted bird is known for its delicious taste and unbeatable price of $4.99.
How do I avoid Costco membership fees? ›
I'll explain a few ways you can do that.
- Do your shopping at Costco.com. Costco has more than 800 clubs worldwide. ...
- Place a Costco order through Instacart. ...
- Shop with a friend who has a membership.
Can other people use my membership card? The Costco membership card is non-transferable, but there are several ways to share the experience with family and friends. Anyone with a card can bring up to two guests to the Warehouse during each visit. Keep in mind that purchasing items is exclusive to Costco members.
Is it cost effective to have a Costco membership? ›
Costco's entry-level membership costs $60 a year. This gets you and a household member a card and access to the warehouse clubs where you can buy discounted gas and consumer goods. To break even for that upfront cost, you must save at least $60 a year -- to end up better off, you'll have to save more than that.
Is the $60 Costco membership worth it? ›
The entry-level cost of joining Costco is $60.00 per year. If paying the 5% surcharge on your purchases is less than $60, it would not make sense for you to join Costco just to avoid it. You'd be better off doing your online shopping as a non-member and paying the slightly higher prices.
How beneficial is a Costco membership? ›
Costco offers members savings on bulk items and other consumer goods, such as apparel, travel, and electronics. There are two membership tiers from Costco: Gold Star and Executive.
