With the official start of summer coming up, AAA recently reported the cost of driving has hit a six-year low due to falling gas prices. However, you may be paying more by summer.
2016 Driving Costs
The 2016 Your Driving Costs study found the annual cost of driving for average sedans stands at $8,558, or 57 cents/mile. The quickly decreasing gas prices have made up for factors that have increased driving expenses, including maintenance and insurance. For specific vehicle types, here are some price points according to MoneyTalksNews:
- $6,579/year for small sedans
- $8,604/year for medium sedans
- $10,492/year for large sedans
- $10,255/year for SUVs
- $9,262/year for minivans
Why Prices Are Expected to Rise
Gas prices are expected to be rising again even though they’ve been lower than in past years. AAA reported that the average price of gas went over $2 per gallon for the first time in 2016 this past March. Prices had risen 21 days in a row that month. It is expected that that prices could rise 25 cents per gallon by the time Memorial Day gets here which could be due to:
- Higher oil costs that have increased by $10/barrel since early February which made producing gas more expensive.
- There has been an increased demand with the coming of warmer weather.
- Refinery maintenance is underway in preparation for summer. During the maintenance period, less fuel is produced.
- Refineries are beginning to produce summer-blend gas that is required to be sold by gas stations in some areas by the EPA for air quality reasons. Production begins by April first and is sold from June 1 to September 15. The summer blend gas is more expensive to produce.
As the summer approaches, keep an eye on gas prices and adjust your summer budget as necessary.