I heard a radio ad last night on the way home from work. It made me laugh. The ad was for a local small independent gas retailer. The ad touted “You save 2 cents per litre when you pay with cash”.
“Wooop-dee-doo Basil, what does it all mean…” – Austin Powers
It doesn’t mean a whole heck of alot. I have one of those large Canadian gas retailers’ MasterCards that offers the same savings. That 2 cents doesn’t amount to much. Lets do some calculations:
The local cost for gas is $1.12/Litre. If you put in 50 Litres of gas, the total comes to $56.00.
If you take off 2 cents: $1.10/Litre and put in the same amount of gas, 50 Litres, the total comes to $55.00.
Your eyes do not deceive you, the difference is a mere $1.00. Thats less than the cost of a large Tim Horton’s coffee! Okay, lets take it another step further. Lets say that you put in that much gas every week. There’s 52 weeks in a year so that amounts to $52.00 of savings per year. That’s barely the amount put in every week so at best that 2 cents per Litre of savings buys you one tank full over the course of the year. That of course assumes the price of gas stays constant for that year which I believe it NEVER has and likely never will.
For me I had never done the calculations before and just assumed that 2 cents cheaper has to be good, but a mere $1.00? Big deal! I think all this has woken me up to is that perhaps it is more than reasonable to use the next higher grade of gas (which typically here in Canada is about 2 cents more than the price for regular leaded gas) and hopefully extol some benefit of that onto your cars performance or extend its life by some minute time.
Some people will argue that its better to have that lowly $1.00 in your pocket than theirs, but people waste so much of their money on crap that any benefit would never actually be realized. So what’s my point? My point is just to dispell the marketing glitz that is portrayed in the radio ad. To think that people actually stop going to their normal, likely convenient retailer to the one in the ad just because they could glean a 2 cents per litre savings, is just ridiculous, in my opinion anyways.