Fuel Cards for Owner-Operators: How to Compare Savings and Fees

As an owner-operator, you can expect to pay anywhere from $60,000 to $105,000 per year. Typically, you find yourself paying anywhere from 25% to 40% of your gross revenue on fuel. That’s what makes the owner-operator margins in trucking so razor thin.

One of the big ways that owner-operators save money in trucking is through using a fuel card for truck drivers. With so many available, choosing the right one requires knowing how to compare the savings and fees. Some charge fees that will make certain gas cards for truck drivers impractical.

Let’s explore how to choose the right fuel card. Good fuel cards for trucking companies will better control your costs at the pump.

Fuel Cards: Two Pricing Models for Savings

When it comes to savings from fuel cards, you get one of two pricing models for savings: retail-minus pricing and cost-plus pricing.

Let’s look at retail-minus pricing first. This model makes you pay a certain amount, but it comes with a discount. For example, you might get $0.15 off per gallon, which works out to 5% or 13% off every time you fuel up.

You can easily track your savings with the retail-minus pricing model. Unfortunately, you may find they heavily inflate the numbers, especially at major highway exits, so the discount isn’t real.

On the other hand, cost-plus pricing provides you with wholesale-based pricing of fuel. What that means is instead of paying retail price on fuel, you receive a nice discount per gallon.

Looking at the downside, cost-plus pricing introduces more complexity. If you want to maximize your savings, you need someone tracking the data like the per-gallon fee, taxes, and network pricing.

If you run routes in regions with higher gas prices, it makes sense. They make less sense in places with lower gas prices because your savings will be minimal.

Related article: Owner-Operator Pay: Gross Revenue vs. Take-Home Pay

Which is Better: Retail-Minus Pricing or Cost-Plus Pricing?

You can get good savings from either model, but a fuel card for truck drivers with one pricing model might make more sense. How they save you money differs.

Smart owner-operators choose based on the regions they run. Planning on running a region with low fuel prices? Choose a fuel card based on the retail-minus pricing model.

These regions tend to be the American South, the Gulf Coast, and certain areas of the Midwest. The Gulf Coast and South tend to be this way because of them being close to refining hubs.

If you plan to run a region with high fuel prices, you probably want a fuel card based on the cost-plus pricing model. The region where it would especially make sense is the West Coast. The West Coast is more expensive because of state taxes, regulations, special fuel blends (i.e. California), and having no direct pipeline connections to oil-producing hubs.

Let’s look at a table to visualize the differences in each fuel card for owner operators:

Dangerous: Fuel Cards & Terrible Fees

You should always request a complete breakdown of fees before you sign up for a fuel card. Some fuel cards, because of their fees, won’t offer a good deal. They devour your savings. The most common fees to watch out for include:

• Fees for being out of the network: This unexpected fee can wipe out your savings. The wrong card will force drivers to go out of their way to stay inside the network. You might use a finder app from the fuel card to avoid going out of network, but it can be a hassle.

• Monthly account fees: Some cards will charge a monthly fee ranging anywhere from $2 to $5 per card, or $99 per account. This is regardless of how much you use the card.

• Per-transaction fee: I would generally avoid this one. Every time you use it, it eats into your savings. They normally charge a flat fee ($0 to $5) or a small percentage of your purchase. Some fuel card brands will waive the fee if you use it at their partners.

• Inactivity fees: This happens when the fuel card sits unused for too long, usually 30 to 60 days. Inactivity fees aren’t cheap either. You could pay anywhere from $5 to $25 per card. Some will even go so far as charging you 10% or a $50 minimum.

Red Flags with Fuel Cards

Some fuel cards are straight predatory, meaning they exist to make money off you. Let’s look at what red flags to watch out before you sign up for a fuel card:

• No fees, contract terms, or cancellation terms in concrete writing.

• Claims about savings without explaining the terms.

• The fuel card company requests broad access to documents and systems.

• Can’t export your records for taxes, audits, invoices, or disputes for proof

Bad fuel cards typically try to hide bad terms through vague terms or complicated writing.

A good fuel card will improve one of four things: uptime protection, compliance proof, cash control, or decision speed. You’ll see everything upfront, and you’ll clearly see where you can make improvements.

Related article: Lease Purchase vs. Buying a Semi Truck: Risks and Questions to Ask

How to Compare Card Savings

To compare savings, look at how much you spend per month on fuel. After you look at the total, multiply it by the discount they talked about. Finally, subtract all fees you can see.

Here’s what the formula looks like:

• Monthly Fuel Spending x Discount - All Fees = Total Savings

Use this formula to search for the fuel card with the most savings. To do this accurately, you need to make sure the fuel card brand lays out all the fees in concrete detail.

What Do You Think of Fuel Cards?

Have you gotten good savings from a fuel card? At Trucker Social, we would love to hear which ones you’re using to save the most money. There are many choices when it comes to a fuel card for a truck driver, but not all of them are good deals. Knowing what makes a good one and what will simply cost you money is the best way to approach them

If you’d love to discuss what fuel cards other truckers are using, we invite you to check us out on Trucker Social and browse our fuel card partners. Sign up for your FREE profile and see how others get the most savings.