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1. CHOOSE YOUR GAS STATION WISELY: Different gas stations offer different prices. Mom-and-pop stations, for example, can often beat the prices of the major chains, as can discount gasoline chains, like Valero and USA Gasoline. And because taxes vary state-by-state, prices vary regionally, too. Last summer, gasoline prices were nine percent higher than the national average in California, and lower than average on the Gulf Coast. If you're planning a road trip, do your research beforehand and fuel up in strategic places; even at home, you can go online to compare prices in your area. Visit www.gasbuddy.com, which lists prices by zip code.
2. KEEP UP THE TLC: A little maintenance can go a long way when it comes to fuel efficiency. A standard tune-up can improve gas mileage by up to four percent. Use your car manufacturer's recommended grade of motor oil; this, too, will boost efficiency, by one to two percent. Keep your tires inflated and that will chip in three percent more.
3. SLOW DOWN: With each 5 miles per hour you drive over 60 miles per hour, you lose 5.6 percent fuel efficiency, according to the U.S. Department of Energy. Aggressive driving, speeding and rapid acceleration and braking can lower your gas mileage by as much as a third. Your passengers will be less white-knuckled, too.
4. GO HYBRID: It's too late to take advantage of the IRS' $2,000 tax deduction on hybrid vehicle purchases (it expired last year) but you can still take a $500 deduction on vehicles purchased in 2006. Better still: Starting this year, hybrid owners are eligible for a tax credit, which is more valuable than a deduction because it reduces your taxes dollar-for-dollar. Qualifying hybrids 'placed into service' (i.e. after you get off the waitlist, if there is one) after December 31, 2005 may be eligible for a tax credit of up to $3,400. The credit applies through 2010 or once each company has met its quota of eligible vehicles. The rules are tricky, so visit energy.gov/taxbreaks.htm or irs.gov for more information.
Leigh Gallagher is a senior writer for SmartMoney magazine and a regular contributor to "Cavuto on Business."