3 ways to save on rising gas prices
A year ago, America was basking in some of its lowest gas prices in years. Alas, such prices are unlikely to return in the coming few years.
—Overall, according to the Bureau of Labor Statistics, the prices of goods and services are expected to edge up this year by a modest 1.7 percent – about the same as in 2016. But some major purchases will increase by more than that, and by much more in some cases.
Gasoline could be among the goods that will rise the most. A year ago, America was basking in some of its lowest gas prices in years, with average national prices below $2 a gallon in January, February and March 2016. And prices stayed relatively low throughout the year, for an average of $2.14 for 2016.
Alas, such prices are unlikely to return in the coming few years, according to the U.S. Energy Information Administration, an independent agency funded by the federal government. The EIA forecasts gas prices rising for at least the next six months, from an average of $2.34 a gallon in January to around $2.50 through the summer. They project an average price for 2017 of $2.37, or about 15% higher than in 2016.
Since the average U.S. household last year spent $2,781 on gas, such an increase would deliver a $400-plus jolt to annual spending.
Here are three ways you can help reduce, or at least offset, the financial pain from filling your tank in 2017:
1. Buy a More Energy-Efficient Vehicle
This obvious first step to reducing gasoline bills may make particular sense in 2017. For one, the EIA also foresees gas prices continuing to rise in 2018, which means your investment in more-frugal wheels should continue to pay off beyond the end of this year.
In addition, cars are among the major purchases that are predicted to decline in price in 2017. The trend may be less prevalent when it comes to new cars, sales of which were sustained in 2016 by a host of promotional incentives, such as 0% APRs, that carmakers may be hard-pressed to continue to 2017. But healthy new-car sales over the past few years will deliver a bonanza to used-car buyers as a glut of vehicles come off leases and hit dealers’ lots. Analysts expect the supply of used cars will exceed demand, and prices to decline. Even better, prices for small sedans, those most fuel-miserly of vehicles, have already dropped by 14% in recent years, according to data from the Used Vehicle Value Index published by Manheim, a consultant on automotive sales.
2. Shop Around for Auto Insurance
Like gas, the cost of insurance coverage for your vehicle is likely to rise in 2017. Insurers blame a host of factors, from increases in the incidence of serious accidents to rising repair costs for today’s more sophisticated vehicles to a spate of storms and other weather events.
The likely increases, which vary widely according to where you live and what you drive, make it all the more sensible to shop around for the cheapest insurance. In addition, whatever company you insure with, be sure to check you’re taking full advantage of all eligible discounts and incentives, including those for taking defensive driving courses, which can now be completed online and can earn you several years of reduced premiums in exchange for a few hours of work at your computer.
3. Maximize Rewards on Your Gas Purchases
Since you could easily be spending $250 or so a month on gasoline, it pays to select a credit card that delivers the biggest cash rewards for gas purchases.
However, such a card may not be the best cash-back credit card for all your household spending. If you’re comfortable juggling several cards, choose a separate card for your gasoline spending; if you prefer to use a single card, consider your balance of gas and other spending and select accordingly.
This story originally appeared on ValuePenguin.
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