Maximize Your Fuel Economy

by Felicia Rupp and Tim Ayler, CPA | Team Members of the Construction Services Group

The increase in fuel prices in the last several years has had a great impact on commerce. As the prices at the pump have gone up, so too have the prices of almost everything else. However, there are things that can be done to lessen the strain your company is feeling.

Fuel prices have risen greatly in the past several years, and by many accounts will continue to be high. According to the Energy Information Administration, the national average price for a gallon of regular gas currently exceeds $3.66, while diesel fuel is at $3.85 per gallon. Companies are undoubtedly feeling the price hike whenever it fills up its work vehicles. With the nature of your business, it is possible that you cannot switch to a more fuel efficient vehicle, so consider implementing some of the following ideas to maximize your vehicle’s fuel efficiency and mitigate the pinch you are feeling at the pump:

1. Reduce weight whenever practical. If you want to increase your gas mileage, remove unnecessary weight from your vehicle. Obviously this is not to suggest that you remove spare tires or anything else that might make the difference in successfully and efficiently completing your jobs, but just those items which are unlikely to be needed throughout the day or course of the project. Removing an extra 100 pounds from your vehicle could increase your mileage per gallon up to 2 percent.

2. Membership has its privileges. If your company belongs to a trade organization, you may be sitting on an untapped resource. Some trade organizations offer opportunities for fuel discounts from participating oil companies. Check with your trade organizations to see if you qualify and for information on how to sign up.

3. Avoid prolonged idling in gas-powered vehicles. Avoid prolonged warm-ups and otherwise needlessly letting your vehicle idle. With today’s fuel injection systems, you burn considerably less fuel starting your vehicle than by idling for 30 seconds or more.

4. Keep in tune.  By keeping your vehicle properly maintained, you can avoid mileage-lowering issues caused by clogged air filters (which can reduce your mileage by 10 percent), worn spark plugs, dragging brakes, low transmission fluid or the transmission’s failure to go into high gear, and misaligned wheels.  Furthermore, clean oil of the proper grade and viscosity can reduce internal friction and benefit your fuel economy up to 2 percent, perhaps more if you can use synthetic.

5. Keep your tires firmly against the road. By maintaining your tire pressure at the maximum recommended pressure (see the label inside your car door), you can save at the pump.  According to the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Energy (DOE), keeping your tires under inflated by just two pounds may reduce your mileage by almost one percent. Properly inflated tires may improve your fuel economy by up to 3.3 percent.

6. Take it easy, slow and steady. Although driving the speed limit is always recommended, there are those who occasionally drive aggressively. Aggressive driving wastes gas and is the enemy of fuel economy. While each vehicle reaches its optimal fuel economy at a different speed, gas mileage usually decreases rapidly at speeds above 50 mph. You can assume that each 5 mph you drive over 50 mph is like paying an additional $0.25 per gallon for gas. Accelerate gently, coast whenever possible, and use your overdrive or cruise control in order to realize as much as a 37 percent economy improvement, according to the DOE.

7. Preplan your route. Try to arrange your jobsite visits in such a way that you can knock out as many as possible with the least amount of travel. This isn’t always possible, but you might be surprised at how often you may backtrack unnecessarily for lack of proper planning.

8. Take the credit (card).  Did you know that Discover, American Express and other credit card issuers have cards that give rebates for fuel purchases? The rate of return, annual fees, and others restrictions vary, but go to www.cardtrak.com for details to help you select a card. Think of it like this – if you spend $100 per week on fuel, this becomes over $5,000 per year. A 5 percent rebate gets you $250 back. Looking at it another way, you just earned two and a half weeks worth of fuel just by having a rebate-offering credit card.

9. Fuel tax credit. The government imposes a federal excise tax on gasoline, clear diesel, and clear kerosene. The amount of taxes you have paid may be credited or refunded if certain fuels have been used in vehicles for off-road purposes. The American Taxpayer Relief Act of 2012 extends certain fuel tax credits through December 31, 2013. These include the biodiesel mixture credit, biodiesel credit, alternative fuel credit, and alternative fuel mixture credit. Check with your tax professional to see if you are eligible.

10. For gasoline-powered vehicles only.  Use the octane rating suggested by the vehicle manufacturer.  Spending the extra money for mid-grade or premium gas doesn’t necessarily benefit you if your vehicle was made to run on regular unleaded. Conversely, it is not normally a great idea to drop from the grade suggested by the manufacturer to a lower grade. Although you may feel like you are saving money, the loss of power and fuel economy will likely outweigh the savings at the pump, not to mention the risk of damage to the vehicle’s engine.

Businesses are not the only ones feeling the pressure at the pump. Individual consumers are also being negatively affected by the increased prices. Here are a couple of additional ideas that individuals may want to consider to help lessen the burden of high gas prices.

1. Take a peek online. There are a few web sites available that update gas prices online and could help you get a better idea of which filling station near you has the least expensive fuel.  Bookmark one of these free sites for a quick peek:

www.gasbuddy.com – Also available in free app for smart phones

www.gaspricewatch.com

www.automotive.com

2. Use the grocery card.  A number of grocery chains, including Kroger, offer fuel discounts if you join their customer loyalty programs. Kroger stores have been offering $.10 off per gallon for every $100 you spend in their stores. Meijer offers fuel discounts of $.05 off per gallon with a Meijer credit card. Buying club membership organizations like Costco offers the ability to earn 3% cash back on gas with the TrueEarnings Card via American Express. You have to go grocery shopping sometime, so you might as well reap the benefits at the pump.  Furthermore, there’s no reason you cannot double-dip this discount along with the credit card rebate programs listed above.

Contact information:

Felicia Rupp | Senior, Tax Services Group | 317.260.4431 | frupp@greenwaltcpas.com

Tim Ayler, CPA | Partner, Team Leader of the Construction Services Group | 317.260.4401 | tayler@greenwaltcpas.com