What You Dont Know About Gas Stations

1. “Good luck finding the best deal.”
When it comes to gas prices, most stations are branded—meaning the name of a major oil company hangs out front—and must buy gas from their proprietary company. They can’t shop around. With a lock on sales, the oil companies charge each station a different price depending on various factors, such as the station’s competition and its location. That means a station can pay as much as 46 cents a gallon more than one down the street, and that cost gets passed along to you.

Faced with such instability, Gainesville, Fla., resident Steven King plans ahead: “If I know I’m going out of town, I try not to buy gas so I can fill up after I leave.” King says he can save 10 cents a gallon by purchasing gas on the road. You’d be similarly wise to shop around—with prices constantly in motion, the cheapest gas may not be at the same station every time.

2. “I hate it when gas prices go up.”
Stations earn on average between 10 and 15 cents on a gallon of gas. Ironically, they earn the least when prices are highest. When fuel climbs, gas stations must shrink their profit margin to remain competitive, meaning they earn less per gallon than usual. But another big cost during tough times is something they can’t do anything about—credit card fees, which add up to about 2.5 percent of all purchases. When gas is at, say, $2 a gallon, the station pays credit card companies 5 cents a gallon; when gas hits $3, that fee becomes 7.5 cents—more than half the station’s entire average profit. “Those credit card fees are miserable for the gas station business,” says Mohsen Arabshahi, who owns five Southern California gas stations.

How do station owners make up for lost revenue? “Prices go up like a rocket and come down like a feather,” says Richard Gilbert, a professor of economics at UC Berkeley. For several weeks after wholesale prices drop, stations can earn as much as 20 cents a gallon before retail prices are lowered to reflect the change.

3. “My gas isn’t better for your car; it’s just more expensive.”
Oil companies spend lots of money explaining why their gas is better than the competition’s. Chevron’s gas, for example, is fortified with “Techron,” and Amoco Ultimate is supposed to save the planet along with your engine. But today more than ever, one gallon of gas is as good as the next.

True, additives help to clean your engine, but what the companies don’t tell you is that all gas has them. Since 1994 the government has required that detergents be added to all gasoline to help prevent fuel injectors from clogging. State and local regulators keep a close watch to make sure those standards are met; a 2005 study indicated that Florida inspectors checked 45,000 samples to ensure the state’s gas supply was up to snuff, and 99 percent of the time it was. “There’s little difference between brand-name gas and any other,” says AAA spokesperson Geoff Sundstrom.

What’s more, your local Chevron station may sell gas refined by Shell or Exxon Mobil. Suppliers share pipelines, so they all use the same fuel. And the difference between the most expensive brand-name gas and the lowliest gallon of no-brand fuel? Often just a quart of detergent added to an 8,000-gallon tanker truck.

4. “If you’re smart, you’ll put that debit card away . . .”
Your debit card might be a convenient way to pay for gas, but it’s a no-win proposition. When you swipe a debit card at the pump, the bank doesn’t know how much money you’ll be spending until you’ve finished pumping. So to make sure you have the funds to cover the purchase, some stations ask banks to automatically set aside some of your money: That amount can be $20 or more. That means even if you just topped off your tank for $10, you could be out $30, $50, even $100 until the station sends over its bulk transactions, which can take up to three days. If your funds are running low, you might end up bouncing a check in the meantime—even though you had the money in your account.

Unfortunately, paying inside with your debit card isn’t much of a solution either. Many banks charge their customers between 50 cents and $1 for the privilege of using their debit card in any PINbased transaction. The American Bankers Association estimates only 13 percent of consumers pay these fees, but critics say the practice is on the rise and consumers are often unaware of these charges.

5. “. . . and don’t even consider applying for our gas card.”
When it comes to gasoline credit cards, a little research goes a long way. The good deals are great, but the bad deals are really bad. Similar to store cards issued through retailers, gas cards are riddled with drawbacks, says Curtis Arnold, founder of CardRatings.com. APRs are high, starting above 20 percent; many don’t offer rebates on gas purchases; and they often lack standard protections such as fraud monitoring and zero liability for unauthorized transactions.

What about a Visa or MasterCard affiliated with a gasoline brand like Exxon or BP? They often offer lower interest rates and significant rebates, but limit your ability to shop around. In December 2005, a few months after gas hit $3 a gallon, Justin Andringa of Minneapolis considered a Shell MasterCard with a 15 percent rebate on gas purchases. But the rebate was temporary; he decided to stick with his Citi Dividend Platinum Select card, which gives him a 5 percent rebate on all gas purchases no matter where he buys it. “I’m a college student,” Andringa says. “I need to save money.” The deals on these cards are constantly changing. So visit CardRatings.com to find updated information.

6. “Looking for the cheapest gas in town? Try the Internet.”
You can’t actually buy gas online, but Web resources can help you find the cheapest fill-up in town. Among them, GasPriceWatch.com and GasWatch.info help people track pump prices. But the most comprehensive of the bunch is GasBuddy.com, which includes a network of 174 local sites, complete with maps and message boards that tally gas price by ZIP code. “People are frustrated by the variation in the price of gas,” says GasBuddy.com cofounder Jason Toews, and they’re using the Internet to take control.

It has worked wonders for Sue Foust. Every day, as she passes roughly 10 stations on her commute across Tucson, Ariz., Foust makes a mental note of their prices, then posts them on TucsonGasPrices.com, a local affiliate of GasBuddy.com. Then every four days or so, when she needs to fill up, she checks the prices others have posted in her area. It turned out the Shell station she used to frequent is one of the most expensive in the city. Now she fills up elsewhere. “I really do feel like I’m saving money,” she says.

7. “It’s a gallon when I say it’s a gallon.”
It’s hard to know if you’re getting all the gas you paid for at the pump. But in some places there’s a very good chance you’re not. The state or county weightsand- measures department usually checks pumps for accuracy, but in some areas it can be years between inspections. Arizona, for example, has only 18 staff members to check the state’s 2,300 stations.

That means stations there can expect a visit once every three to four years, according to Steve Meissner, an Arizona Department of Weights and Measures spokesperson. In 2005, 30 percent of the more than 2,000 complaints the department received were valid, and it levied $167,000 in fines. The good news is that it’s often easy to catch the most common problem: Older pumps in poor repair may begin charging you for gas before you’ve pumped it. Check the meter to make sure it registers $0.00 before you begin and doesn’t start charging you before the fuel is flowing.

8. “I might gouge you on a soda, but my coffee’s a real bargain.”
With margins on gas taking a hit—in 2006, fuel sales made up 71 percent of revenue but only 34 percent of gross margins—stations are increasingly looking to their convenience stores for income. Given that fact, you’d assume the average Kwik-E-Mart to be a terrible place to buy just about anything. But that’s only partially true.

Stock that usually sits on the shelf does tend to be vastly overpriced, so if you forgot ketchup on the way to a barbecue, you can bet you’ll pay a lot more for it at a gas station than you would at a supermarket, says David Bishop, director of convenience retailing for Willard Bishop Consulting. What about popular beverages? You’ll pay more for a 20-ounce soda at a gas station than you would for a two-liter bottle in a supermarket; water and energy drinks similarly tend to have high markups.

But there are bargains to be had: Some high-volume goods, such as cigarettes and beer, are often competitively priced at gas stations. And a cup of coffee goes for a fraction of what you’d pay at Starbucks.

9. “If you’re having car trouble, you’re in the wrong place.”
The days of the local gas station staffed with a skilled mechanic have all but come to an end. Station owners are swapping car lifts for beverage cases and car washes, anything that brings in a highvolume stream of income and traffic, says Dennis DeCota, executive director of the California Service Station and Automotive Repair Association. The more people who pull over for a soda, the greater the chance they’ll top off their tank and vice versa, the thinking goes. Few owners want the hassle of a business like car repair even if it earns the same amount of money as a convenience store.

In addition, repairing cars is increasingly expensive, and the ill will and potential liability from a fix-it job gone wrong are more of a headache than many owners are willing to risk. Today a service station can require $100,000 worth of diagnostic equipment—a significant investment. It’s a risky venture with little payoff, says Southern California station owner Arabshahi. In fact, Arabshahi removed the service station from one of his locations after he bought it. “I don’t have a service station because I am not a mechanic,” he says. “If he messes up a job, then it’s my name on there.”

10. “You don’t even need gas to run your car.”
Cars run on gasoline—but not all cars need gasoline to run. In fact, 6 million cars on the road today (mostly from U.S. manufacturers and built since 1998) are “flexible fuel” vehicles that can run on E85, a fuel that is 85 percent ethanol and only 15 percent gas. When Minneapolis resident John Schafer bought a car in late 2001, he chose a Chevy Tahoe because it’s a flexible-fuel car. Since then he’s filled up almost exclusively with E85. The big difference he’s noticed: Cars using E85 get about 15 percent fewer miles to the gallon. But it’s a drawback he’s willing to put up with. “I’m committed to the technology,” Schafer says. “With E85, it burns cleaner so it won’t pollute as much.”

While E85 generally costs less than regular gas, there is some concern that it may grow prohibitively expensive as demand outpaces supply: By 2006 ethanol was not just being used in E85—it also composed 15 percent of every gallon of gas sold. Supplies of ethanol are likely to grow thin, which could drive up the price of E85. And even die-hard Schafer says he won’t buy E85 if it starts to cost more than gasoline.

by Jim Rendon
Copyrighted, SmartMoney.com. All Rights Reserved.

New Low-Cost Airline to Sell Seats for $9

A new low-cost airline will begin serving mid-sized U.S. cities that it thinks larger carriers have left behind.

Clearwater, Fla.-based JetAmerica said 34 nonstop passenger flights a week will start July 13 at Toledo, Ohio; South Bend, Ind.; Melbourne, Fla.; Newark, N.J.; Minneapolis and Lansing, Mich. Twenty-eight flights start or end at Newark Liberty International Airport. The carrier will add six more flights — from Toledo to Minneapolis — starting Aug. 14.

JetAmerica is targeting small and midsize cities like Lansing, which has seen the number of daily flights at its Capital Region International Airport fall from 35 to 12 the past five years. The decline is part of a national trend that has seen airfares increase at those airports as daily flights have decreased.

Robert Selig, head of the Capital Region Airport Authority, said JetAmerica will give Lansing business travelers direct access to New York City and carry leisure travelers to central Florida.

“We don’t have access to either one right now,” Selig said. “So, this is going to fill a major void in our schedule.”

Filling that void won’t be cheap.

The Lansing, South Bend, Melbourne and Toledo airports are subsidizing JetAmerica with $1.4 million in grants in its first year, along with about $867,000 in waived airport fees and $1.1 million in marketing and advertising assistance.

South Bend, Toledo and Melbourne received their grants from the U.S. Department of Transportation’s Small Community Air Service Development Program, which has awarded $104 million to 223 recipients since 2002 in an effort to restore lost service and bring air fares down.

Newark and Minneapolis, each of which serve more than 20 million passengers a year, are not offering assistance to JetAmerica.

John Weikle, chief executive of JetAmerica, said the subsidies will help insulate the new carrier from spikes in jet fuel prices. Higher fuel prices have contributed to the failures of at least four major airlines since 9/11. Smaller carriers have also been hurt.

Surging fuel prices helped bankrupt ultra-discounter Skybus Inc. last year. Weikle founded that Columbus, Ohio-based airline known for its $10 fares. The bankruptcy cost 450 employees their jobs.

JetAmerica’s pricing scheme will share some Skybus characteristics.

Prices will start at $9 a seat and top out at $199. The $9 price will apply to the first nine to 19 seats on each plane. Passengers will pay $15 to check a bag. Food, drinks and in-flight TV will also come at a cost.

The carrier is starting out with one leased Boeing 737-800, expects to add a second in the first month, and have as many as four by July of next year. Weikle’s business plans calls for an additional 189-seat jet to be leased every four months.

Each Boeing 737-800 can fly to four cities a day, Weikle said.

Weikle estimated JetAmerica’s revenue at more than $50 million in the first year and about $150 million in the second. He compares his business model to that of Wal-Mart Inc., which started out by serving cities of less than 50,000 people because competitors were not interested in them.

JetAmerica plans to serve Melbourne, Fla., with at least six flights a week. Richard Ennis, executive director of Melbourne International Airport, said JetAmerica’s planes and nonstop routes persuaded him to support the carrier. Melbourne, a coastal community about 70 miles southeast of Orlando, recorded a 45 percent decline in passenger traffic at its airport from 2000 to 2008.

Ennis said carriers with larger jets like the Boeing 737-800 charge less per seat, which is an advantage enjoyed by Orlando International Airport and Orlando Sanford International Airport.

“It’s the only way I can beat them out,” Ennis said of the neighboring airports.

By Victor Epstein, Associated Press Writer
Provided by Associated Press

Six Consumer Items You’re Wasting Money on

Looking for a relatively painless way to save money? Stop buying things you don’t need.

Next time you mindlessly reach for an item you’ve grown accustomed to buying out of habit, stop and think about whether you really need it. Consuming less (of anything) is not only great for your budget, it also benefits the planet.

Here are some things most of us don’t need to purchase:

Air fresheners are not only completely unnecessary, but they can also release hazardous chemicals into your home. The Natural Resources Defense Council found phthalates (hormone-disrupting chemicals that are linked to birth defects) in 12 of the 14 common household brands of air fresheners it tested, including those that were labeled “all-natural.” Open your windows and let the fresh (and free) air in. If your home has a persistent odor, your best bet is to find the source and fix it rather than simply masking it.

Bottled water isn’t proven to be any cleaner or safer than tap (in the United States). The New York Times estimates that it costs $1,400 a year for someone to drink eight glasses a day of bottled water, versus around 49 cents for an annual supply of tap. Drinking filtered water is a lot less expensive, just as healthy, and good for the environment.

Dryer sheets can do more harm than good since they are loaded with a mixture of synthetic chemicals that can cling to your clothes and be absorbed through your skin. Here’s a cheaper and healthier alternative to make your clothes soft and static free: Add 1/2 cup white distilled vinegar or 1/4 cup baking soda to your laundry, suggests Patti Wood, at Grassroots Environmental Education. Want your clothes and bedding to have a scent? Wood says to spray a small piece of cloth with an essential oil and toss it in your dryer.

DVDs and books are easily borrowed from the library. Worried about due dates or late fees? Check out the growing number of websites, such as Swaptree, that can help you trade books, movies, music, and video games. Some other money-saving and planet-friendly entertainment tips: Download music from the Internet instead of buying CDs. It’s not free, but you can save money by only purchasing the songs you like and cut back on landfill-clogging packaging. Eliminate your cable television service. See if your favorite shows are available for free on Hulu.

Trash bags are a necessity for most of us, but that doesn’t mean you always have to pay for them. Consider using the shopping bags you get for free at the grocery store instead of buying new plastic garbage liners. You’re helping the planet by getting two uses out of a bag instead of just one. It’s like having a bag made from 50 percent recycled content, says Martin Wolf, Director of Product & Environmental Technology at Seventh Generation.

Wrapping paper is something most of us can get along without since a little creativity can go a long way. Raid your recycling bin for old maps, sheet music, kids’ artwork, newspapers, magazines, paper bags, and more. Wrapping gifts in newspaper or magazines need not be dull, especially with a little forethought. Is the recipient a sports fan, gardener, or cook? Choose relevant images or wacky photos. Paper bags can be cut up and decorated (or not).

By Lori Bongiorno

How to Avoid a $62,000 Phone Bill

It’s an old story, but here we go again: One caller into a CNN TV show sounded like a man on his very last legs as he explained how a trip to Mexico turned abruptly expensive. No, “Alberto” wasn’t kidnapped and held for ransom by a drug cartel. He was the victim of his cell phone carrier, who slapped him with a $62,000 bill after he downloaded a copy of Wall-E to his laptop via his cellular data card.

Alberto’s not alone: Tales of multi-thousand-dollar cell phone bills are legion (I’ve written about several of them here), but looking through the cases you’ll see a few common themes over and over again. Want to avoid getting slapped with a bill that’s higher than the price of a new car? Here’s some advice that every cell phone customer should keep in mind.

> International roaming is often the enemy in cases like this. Neither standard voice nor data plans cover calls when you’re out of the country, and yes that includes Mexico and Canada. I’ve even heard of one case where a caller got a mega-bill while standing on a boat docked in Miami but which was deemed “international” until he could prove he was still in U.S. territory. International roaming rates are exorbitant and are billed by the minute (usually over a dollar/minute) or the kilobyte, so your best bet when leaving the country is to leave your cell phone at home if you can — or call your phone carrier to ensure that international roaming is disabled so you won’t be billed for accidental calls or automatic data pings like the iPhone performs.

> If you need connectivity overseas, make sure you understand the rate you’re paying. $1.29 a minute is easily understandable but $0.0195 per KB doesn’t mean much to many data users. That tiny number adds up quickly. Case in point: Downloading a single, simple web page like this one will run you about eight dollars. Now imagine downloading a one-gigabyte movie and you’ll understand how these five-figure bills happen. Leave your data card behind!

> One strategy many travelers undertake is to buy a prepaid SIM card they can use overseas or get a cheap phone if they don’t already have one that’s compatible. In Europe, pay-as-you-go plans can be had that offer calls for about 30 cents a minute. If you don’t have a GSM phone, you can get one at any cell phone shop for $30 or less. None of these plans require long-term contracts. You just pay for the minutes you use.

> The other major issue with big bills is going over your plan’s data cap or allotment of minutes. Data’s the biggie: Most wireless data plans top out at 5GB, after which you pay by the KB. The rates aren’t as egregious as they are for international use, but downloading that 1GB movie after you’ve exhausted your 5GB of data will still run you an extra $500. Carriers allow you to check your data usage online, so make liberal use of that feature if you think you might be getting close to the cap.

> Text messages cost money, too, so think before you SMS. A Philadelphia man racked up a $26,000 bill just for texting last month… of course, he was trying to land a spot in Guinness World Records, so really he had it coming.

Common Homebuying Blunders to Avoid

The declining home values that are plaguing homeowners are just one of the factors creating an opportunity for prospective home buyers.

Standard & Poor’s latest Case-Shiller index, which tracks home prices across 20 major U.S. cities, reported that values dropped 19% in January from a year earlier.

Those depressed values, combined with near-record-low mortgage rates and government incentives (an $8,000 first-time home buyers’ tax credit included in the stimulus bill), are luring more first-time home buyers into the market. Indeed, a recent Century 21 Real Estate survey found that more than three-quarters (78%) of potential first-time home buyers say now is a good time to buy.

If you agree, be aware that buying a home comes with plenty of potential missteps. Here are 10 all-too-common mistakes first-timers make.

1. Not knowing how much house you can afford.

Many novice home buyers spend a lot of time researching homes - comparing kitchen layouts and backyard square footage - but very little time researching their financing options. One of the first things buyers should do is talk to a qualified lender and get preapproved for a mortgage, says Claire Clark, senior vice president of business development at Prudential California Realty. Without first figuring out how much house you can afford, you risk falling in love with one you can’t.

2. Assuming foreclosures are great deals.

Just because the previous owner owed $450,000 on a house before the bank took it over doesn’t mean it’s worth that much now. Values have slipped significantly, says Jay Michael, partner at Estate Property Group, a Chicago real estate brokerage, so you may not be getting the bargain you think with a foreclosure. Also, most homes owned by lenders or banks have been sitting vacant for months and may have been vandalized. That could require extensive renovation or repair. Weigh the costs of fixing up the property against the savings you’ll likely reap by buying a lower-priced foreclosed home.

3. Letting your true feelings show.

No matter how much you’ve fallen in love with a house, don’t let the seller’s agent in on it. Otherwise, they will gain the upper hand in negotiations.

4. Failing to find a good buyer’s agent.

Landing a mortgage is tough these days. So buyers should rely heavily on knowledgeable agents to help them get their finances in order, says Michael. After all, buyer’s agents have a fiduciary responsibility to the buyer exclusively — and should be looking out for their best interests. Start your search at the National Association of Exclusive Buyer Agents, a nonprofit representing buyers. Or consider using an agent recommended by a relative or friend. Interview each candidate about their experience, if they’ve worked with first-time buyers before and what kind of service you’ll get from them.

5. Underestimating the costs of owning a home.

Whether it’s a rusty pipe or a leaky roof, things go wrong and need to be fixed. Many home buyers don’t anticipate the additional costs for repair and maintenance, or for an increase in utility costs, says Erin Baehr, CFP and president of Baehr Family Financial. Consider the age of your new home and how well it’s been treated by the previous owners in your budget. Be prepared to set aside a small percentage (1% at most) of the home’s purchase price annually for repairs and upkeep.

6. Failing to budget for property taxes.

Property taxes - and the likelihood that they’ll climb over the course of your time in the house - should be factored into any home-buying budget, says Baehr. To get an idea of how much you’ll be paying, call the local assessor’s office or talk to people in the neighborhood.

7. Assuming your first offer will get accepted.

As home prices get even more affordable, competition is bound to heat up. “You can’t assume you’ll walk in there, make the offer and get it,” says Clark. Try not to get discouraged if you lose out on the first - or second - house you make an offer on.

8. Skipping the inspection.

Before signing anything, hire a professional inspector, says Justin Lopatin, a mortgage planner with American Street Mortgage Company. The seller isn’t likely to tell you there’s mold in the basement or the walls are poorly insulated. Lopatin advises buyers to find and hire their own inspector - independently of the realtor - to ensure there’s no conflict of interest. (You can find inspection companies in the phone book, or by doing a simple web search with your zip code.)

9. Doing too much too fast.

Some buyers want to make the house their own right away, says Baehr. They overextend themselves on credit to do so, and assume the improvement will pay for itself by increasing the home’s value. But that’s not always the case - especially in today’s market. Instead, buyers need to exhibit patience and make changes over time.

10. Failing to include a contingency clause in the contract.

A mortgage financing contingency clause protects you if, say, you lose your job and the loan falls through or the appraisal price comes in under the purchase price. Should one of these events occur, the buyer gets back the money he used to secure the property. Without the clause, he can lose that money and still be obligated to buy the house, says Lopatin.

By Lisa Scherzer, SmartMoney.com