With gasoline prices headed toward record territory (though in adjusted dollars, we were paying more than $2.80 in 1981), it's easy to feel a sense of panic, especially if you just bought a big, yellow Hummer.
But it's not a national emergency, and it's not really a crisis for your finances unless you travel or deliver pizzas for a living. Worst-case scenario: If the price of gas goes to $3 and you drive a 10 mpg car 20,000 miles a year, you'll spend $3,000 more than you would have on $1.50 gasoline.
If you had the money for a $40,000 sport-utility, chances are you have the extra $50 a week to make it through this gas squeeze. Relax. The reality is considerably more rosy for most drivers. Typical cars and minivans average more than 20 mpg, and most of us drive about 15,000 miles a year. That's about $20 more a week if gasoline prices double.
Of course it stings. But even if prices were to stay, say, at $3, trading in your gas guzzler now makes little sense unless a new vehicle was already in the works.
Do the Math First
If you're contemplating a trip to the dealership for a car half the size of your current one, check your trade-in value. Remember that the kind of gasoline prices that have you thinking about another car probably mean others are thinking the same thing and will cut this figure further. Remember the rows of Cadillac on the lots in 1974?
Would the money you might save make up for the bath you're bound to take?
If you're a worst-case scenario driver gritting his teeth, you might consider picking up a cheap, used small car. If you can do, say, three-quarters of your 20,000 annual miles a year in a 30-mpg Ford Escort, saving the 4x4 for vacations and ski weekends, you'd save $3,500 a year on gas. That's enough to pay off a cheap commuter car in a couple of years or less. (MSN Autos' list of the best small used cars.)
The extra-car scenario makes less sense as your gas bill lightens. A $20,000 gasoline-electric hybrid is almost never worth the money (See "Hybrid cars: Do they make sense for you?") unless it's an adequate replacement for the car you already own.
Here's how to save with the ride you already own:
Find the best deal. The My Car service surveys 20,000 gas stations across the country nightly and finds the least expensive gasoline in your zip code. Signup takes only a minute. You might also try GasBuddy.com (link at left under "Related Sites"), where a network of spotters enters information on cheap gas.
If you're on the wrong side of the tracks, buy gas. The price of regular in the Seattle area, for example, varies about 40 cents a gallon throughout the metro area. Going a little out of your way to save 40 cents a gallon makes sense. Crossing town probably doesn't. But if you're in the neighborhood, fill up. Just outside city limits and just over the county line are two likely places to find cheaper fuel, with stations taking advantage of the difference in taxes or cheaper wholesale prices. (Refiners set prices for retailers based on "zones.")
Check traffic before you leave. Idling in traffic means you're getting 0 mpg. Most bigger cities have a real-time traffic Web site. The My Car service you signed up for above also offers real-time traffic information. Your state's Department of Transportation site probably has its own traffic page; many radio, television and newspaper sites do, also.
Consider a credit card with gasoline rewards. The best deals as of mid-April were on two Chase-issued MasterCards. One, the PerfectCard, offers a 6% rebate on any brand of gasoline for the first 60 days, 3% thereafter. Its Marathon Platinum card offers an even greater rebate -- 10% for the first 60 days, 5% thereafter -- but only on Marathon-brand gasoline. Still, that's a savings of $4 on a 20-gallon fillup if you live in an area where Marathon has stations.
Bear in mind that even a 5% rebate is less than the interest charges on any of these cards, so watch that balance. And you earn rewards only on the brand of gasoline that's on your card, so locate convenient stations before you apply.
Buy big-box gasoline. Warehouse giants such as Costco and Wal-Mart sell discounted fuel to their members, sometimes as much as a dime a gallon cheaper. Make sure you'll use the membership for other things, as the fees (which run $35 to $100) could easily make any savings moot.
Take advantage of discounts. Conversely, many independent stations offer a cheaper price for cash transactions because there's no cut to pay the credit-card companies. RV owners might join a frequent-fueler program that discounts gasoline or diesel by a penny or two (which adds up if your motor home gets 6 mpg).
Keep your car in shape. An out-of-tune engine, poor alignment or underinflated tires (check the recommended pressures inside the door or in the owner's manual) can cost you up to 2 mpg, the American Petroleum Institute says. Change oil and filters according to the manufacturer's service schedule. Keep a tire pressure gauge handy. This is a safety issue, too.
You may have a flexible-fuel car and not even know it. Each year, Ford, GM and DaimlerChrysler sell several hundred thousand vehicles with the ability to run either on gasoline or a gasoline-ethanol blend known as E85 (mainly because they win clean-air points for doing so). Some have "FFV" badges on them; others are invisible unless you check the owner's manual. But keep an eye on E85 prices, especially if you live where it's widely available. (See link at left under "Related Sites.") At some point, corn could become cheaper than crude.
Don't fall for miracles. Special oils, additives, magnets? A waste of money, says the Environmental Protection Agency (EPA), which evaluates them. Most produced no result at all; improvements for others were marginal.
Remove the junk. If you're not skiing, you don't need the drag of a rack on top (though it does look mighty sporty). Take a pass through your trunk, glove compartment and back seat; 100 pounds of junk equals one less mile per gallon.
Slow down. Each 5 mph over 60, the EPA says, is like adding a dime to the cost of a gallon of gas. Avoid quick starts or a lot of passing. Slow and steady wins the race.
Skip the luxuries. Unless you live in New Jersey or Oregon, where self-service is prohibited, pumping it yourself is as much as 25 cents cheaper. And if you're feeding your wheels premium gas, check the owner's manual. If your car doesn't require premium, you're wasting as much as 20 cents a gallon.
Share a ride. An easy way to double your gas mileage is to carpool with someone willing to do half the driving. Or ride the bus. Every day that you don't drive alone saves you money.
Try pedal power. Every trip on two wheels is money in the bank and good exercise, too.
The sudden run-up in gasoline prices may be a good thing in a perverse way, landing conservation on our radar screens in a way that never would have happened if prices had crept up gradually. Now the key to coping is to make little changes that become habit -- and to keep doing them once pump prices are out of the headlines. And, perhaps, to look a little more closely at the EPA numbers the next time you go car shopping.