Here’s How Often You’d Have to Buy Gas at Costco for a Membership to Pay for Itself

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Is a Costco membership worth paying for? Keep reading to learn how buying gas can make that membership fee a good investment. 

Costco is a beloved warehouse club for good reason. The deals that the store offers tend to help people spend less on their credit cards for basic necessities like groceries and household products. Plus, Costco’s Kirkland brand has many devoted fans because of its unique offerings and quality.

But it also costs money to be a warehouse club member. And you need to make sure that paying the fees out of your bank account is worth it for you. The fees can be justified by saving on home essentials like pantry items and frozen food. But they can also be justified by the gas savings you can benefit from if you fill up your tank at the warehouse club.

The big question you should answer, though, is how much gas you’d actually have to buy there for a membership to pay for itself. Here’s how you can figure that out.

Will gas savings make your Costco membership worth it?

There’s a very simple way to determine if you can justify a Costco membership just based on gas savings alone. You’ll need to determine how many times you’d have to fill up each month at Costco for the membership to pay for itself — and then ask yourself if you’re likely to hit the club’s gas station at that frequency.

The least expensive Costco membership, called a Gold Star membership, costs $60 per year. You can figure out if your gas savings will cover that cost by doing the following calculation:

$60 (for the membership fee) divided by the number of gallons in your gas tank times the amount that you save by shopping at Costco.

Let’s take a look at some examples. Say that gas costs $3.87 per gallon (which is the current national average as of Aug. 16, 2023, according to AAA). Costco gas tends to be around $0.16 to $0.20 per gallon cheaper than what competitors offer. So, you might be able to get your gas for around $3.67 to $3.71 at Costco. And let’s say your car holds 14.5 gallons of gas.

If you’re saving $0.20 per gallon and you put 14.5 gallons in your car at a time, you’d save $2.90 each time you filled up your tank. Divide this amount by the $60 annual membership cost to find that you would need to fill up your car about 21 times per year at Costco in order to break even for the membership fee.

If you end up filling your car at Costco just twice a month, you’d more than cover the membership cost.

Should you join Costco for the gas savings alone?

Since most people fill up their tank more than twice per month, it may seem like an easy call to join Costco and assume the gas savings will justify the price. But you should also consider other factors, such as the following:

Is it convenient for you to fill up at Costco? If you have to drive out of your way to get your gas there, it may not be worth it. You’d be wasting time, which has value, and would negate some of the savings due to the extra driving. Plus, you might not follow through on going there if it ends up being a hassle. Will you overspend at Costco in other ways? It does you little good to save a bit on gas if the club presents too great a temptation and you end up filling your cart with a giant tub of Cheetos you can’t finish before they go bad or splurging on a giant jigsaw puzzle you spotted on your way to the grocery aisle. Costco is very good at encouraging spending by making you feel like you’re getting a deal, by regularly moving items around so you have to walk through the whole store to find what you need, and by presenting limited-time deals to give you a sense you may miss out if you don’t buy. If you can’t control your spending, then not getting a membership eliminates that temptation.

Now, if you can count on yourself to get gas there and you know you’ll spend responsibly, then there’s little reason not to get a membership when the fuel savings covers it — especially since you may find yourself also saving on other items as well. Just be sure that you think carefully about whether a membership really makes sense for you before you dive in.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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