Our customers may either purchase and maintain their own tank (and maybe you already are “lucky” enough to own one) or lease a tank from us. So what should you do? Read on.
Lease a Tank from Caywood Propane
Subject to credit approval, you may lease a tank from us — and we currently aren’t even charging rent! So what’s the catch?
Turns out there are four catches:
- First Catch. If you lease a tank from us you are required to purchase your propane from us. In fact, it’s a crime to put somebody else’s propane in our tank (the first guy to sell propane back in the day must have been a lawyer — not that there’s anything wrong with that!).
- Second Catch. You may pay more for a gallon of propane if you lease a tank from us than you would pay if you were (or are) the proud owner of your own tank. Prices we have charged to our leased tank customers have been as much as $0.20/gallon higher, and as little as the same price we charge to customers who own their own tanks.
- Third Catch. You must buy at least 500 gallons from us in a year. If you don’t we’re going to charge you $100 or whatever charge may be in effect under the terms of your Equipment Lease from time to time. A lost of our customers who use less than 500 gallons/year lease tanks from us anyway because they just don’t want to live with the hassles of tank ownership.
- Fourth Catch. Some day you may sell your house and move, switch to natural gas, or just decide you would like to pay more for your propane and receive inferior service from another propane provider. Regardless of the reason, when you decide to terminate your Equipment Lease, we’re going to charge you $225 (or whatever amount is in effect under the terms of your Equipment Lease at that time) to pick up our tank. As we are quick to point out, this pick up fee often is a fraction of the money you have saved by doing business with us instead of one of the majors or the average propane retailer.
So, then why lease a tank? It’s simple. Time and money.
Leasing or owning a propane tank ultimately is a personal decision, but leasing a tank is almost always less expensive and certainly less hassle than owning a tank. Purchasing, installing and testing your own new tank and propane system involves significant upfront costs, often well in excess of $1,000 and even approaching $2,000. Leasing a tank from us eliminates the up-front cost. Even if you pay more for propane when you lease a tank, we estimate that it would take an average of 19 years for you to save money by owning your own tank instead of leasing it from us. That’s a long time by almost any standard. And if you are a smart investor and can park your up-front savings from tank leasing in an investment that earns a 5% annual return, it would take you more than 30 years before owning a tank looks smarter than leasing a tank. We’re not finance experts, but we suspect that a 30-year payback or breakeven period would not make sense to most financial experts.
Leasing a tank from us also has an additional benefit. Our leased tank customers are automatically be enrolled in our Price-Cap Pricing Option program every year at no additional cost — that’s a $50 annual savings over customers who own their own tanks.
Own Your Own Tank
So what if you already own your own tank? Well, if you do you can buy propane from any supplier you want (of course, we are mystified that you would want to buy your propane from anybody but us) and, if you do buy your propane from us, we’ll usually (but not always) charge you less than if you leased a tank from us.
So does owning your own tank sound too good to be true? Probably is.
If you already own your own tank, we don’t need to tell you how expensive and time consuming tank ownership can be (at least, if you are doing it safely). You need to hire somebody that knows what they are doing to inspect the tank, then you need to periodically repaint the tank, then there is the faulty regulator (that can cost up to $300 to replace), pressure tests, leak checks… well, you get the picture. Then, of course, there’s all the upfront investment that is made in purchasing and installing your own tank (highlighted above). And don’t forget that you’ll pay $50 per year to participate in our Price-Cap Program.
If you are tired of the hassle and expense of owning a tank, we can help you transition to a leased tank. We’ll pay you for your old tank and you can kiss the cost and hassle of owning a tank goodbye. Call us if you are interested.
If you have any questions on the tank option that works best for you, give us a call, send us a message, or stop by the office. Our Tank Options are subject to our Standard Terms and Conditions and, if you lease a tank from us, our Equipment Lease.