How GasPredictor.com's Denver Gas Predictor Newsletter Saves You Money

On this page:

• The Bottom Line
• Description of the test scenario
• Highlights of the test
• Why can't we save money in Denver?
• Table showing day-to-day events

The Bottom Line of the Test

Our subscriber paid $82.47 for gas since 10/26/2009. Our control driver paid $58.42. Our subscriber is ending the test with 10 more gallons of gas in his tank than the control driver has. The extra 10 gallons in the subscriber's tank is worth $24.29 . Subtracting that from the amount he spent for gas means that he spent $0.24 less than the control driver did. Extrapolating this savings over a full year (262 business days) yields an annual savings of $3.49.

Following our recommendations would save you $3.49 per year, or $1.10 less than the cost of a one-year subscription to the Gas Predictor Newsletter.

Note: We began publishing our Denver Gas Predictor on October 26, 2009, so this test does not encompass an entire year of predictions.

Be sure to read "Why can't we save money in Denver?" for an explanation of why this is a fluke. We firmly believe, and our experience with other cities has demonstrated, that with an actual year's worth of data to analyze, you would in fact save money using our predictions.

Even though you didn't save any money, you still get to smirk when you see the price go up and you knew it was going to go up. No extra charge.

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Description of the Test Scenario

This test compares two hypothetical drivers, the "subscriber" and the "control driver." Each has a car with a 14 gallon tank, each uses exactly two gallons of gasoline every business day, and each has just filled his tank the evening of October 25, 2009.

Our "control driver" does not subscribe to the Gas Predictor Newsletter. He simply leaves his gasoline budget to chance. He fills his tank whenever he gets home from work with only two gallons in the tank. Thus, he buys 12 gallons of gas every sixth business day, without regard to the cost. This represents the way most people buy gas, and shows how much a hypothetical driver would pay for gas without the benefit of our Gas Preditor.

On October 26, our "subscriber" begins receiving his Denver Gas Predictor Newsletter by e-mail. Each night, he tries to follow our recommendations, even though he can not always do so. If we recommend buying gas that day, he fills his tank, even if he just filled it the night before. If we recommend holding off and buying gas the next day, he does not buy any gas unless his tank is absolutely empty. If his tank is empty, he buys four gallons of gas, to get him through the next couple of days, and yet leave enough room in his tank that he can take advantage of any buying opportunity that our newsletter recommends.

We recognize, of course, that this test is not quite realistic in several ways. For one thing, nobody uses exactly two gallons of gas every single day. And nobody drives their car only to work, not driving at all on non-business days. Nobody has off every day that the Chicago Mercantile Exchange (CME) commodity exchange is closed. Nobody buys gas by the gallon, instead rounding up to the next dollar or otherwise easy amount of money to enter in their checkbook (or to make change, if they're paying in cash). And even though our predictions are perfectly wonderful, we're sure none of our subscribers would bother to buy just two gallons of gas because we recommended it. (No, even we don't do that.) However, we had to come up with fixed, simple rules in order to make the test a fair comparison between using our predictions and not using them.

For this test of the Denver Gas Predictor Newsletter, the price of gas used is the second-lowest price for unleaded regular gasoline in the Denver area at about 9:00 AM Mountain Time.

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Highlights of the Test

• During the entire period October 26 through November 18, the control driver bought gas twice. Coincidentally, one of these times was also a day when we recommended buying gas. He just got lucky! A slightly different turn of luck and our subscriber's savings would have been greater.
• October 26: The very first day, our subscriber tops off his tank, avoiding the next day's 2-cent price increase.
• October 27: Although prices have increased, the subscriber tops off again, avoiding yet another 2-cent increase.
• November 2: Our subsriber tops off and avoids yet another 2-cent increase. Coincidentally, the control driver also fills up this day and avoids the increase. Both drivers now have full tanks, but the control driver has spent $29.27 to fill his tank, while our subscriber has only spent $29.11 to keep his tank full since October 26. If we were to extrapolate this across an entire year, saving 16 cents every 6 business days, our subscriber would be saving $6.99 per year. And this is even in the condition where the control driver has coincidentally bought gas when we recommended it.
• November 9: Our subscriber makes his biggest purchase yet, filling up with 6 gallons, just at the exact bottom of a dip in prices. Gas fell 3 cents per gallon this day, the biggest single decrease during our test period, and would rise 2 cents the next day.
• November 10: The control driver fills up after a 2-cent price increase and the day before a 1-cent decrease. Even so, he is paying a penny a gallon less than he did at his previous fill-up. This is a lucky coincidence in his favor.

Why Can't We Save Money in Denver?

We have only been publishing the Denver Gas Predictor Newsletter for three and a half weeks as of our first anniversary on November 18. That's just 18 business days. In such a short time, there will be few opportunities to save money on gas. Morover, if there happens to be a coincidence such that the control driver bought gas at a very opportune time, that one stroke of luck will negate any advantage the subscriber might have.

Just such a coincidence did happen within the short time we have been publishing our Denver Gas Predictor Newsletter. See "highlights of the test" above.

Yet even with that, our hypothetical driver did manage to save a little bit of money, albeit not even enough to recoup the cost of a subscription.

We are supremely confident that as time goes by, there will be fewer of these lucky breaks, and our hypothetical subscriber will save significantly more money on gas. In support of this confidence, we can look at what happened when we published a similar summary on the occasion of our 100th prediction. At that time, we had only been publishing our Chicago Gas Predictor Newsletter for a few weeks - 19 business days - and we got pretty dismal results. Now, more than 8 months later, the same test scenario results in a hypothetical savings of $8.75 per year for our Chicago subscriber. We are sure the same thing will happen as we generate more results for our hypothetical Denver subscriber.

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Table of Day-to-Day Events in the Test

Key

• Date - The date we issued this prediction, pertaining to the next business day.
• Buy Today? - Did we recommend buying gas that day ("yes"), or waiting to buy gas the next day ("no")?
• Avg. Price - What was the second-lowest gas price in Denver? This is the price on the date given, not the predicted price for the next day.
• Sub. Gas in Tank - How much gas did our subscriber have in his tank at the end of that day, when he received his Gas Predictor newsletter?
• Sub. Bought - How much gas did our subscriber buy that day, whether we recommended it or not?
• Sub. Paid - How much did our subscriber pay for the gas he bought that day?
• Ctl. Gas in Tank - How much gas did our control driver have in his tank at the end of that day?
• Ctl. Bought - How much gas did our control driver buy that day?
• Ctl. Paid - How much did our control driver pay for the gas he bought that day?

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