Leasing a propane tank means the supplier owns it, so you avoid the upfront cost and the supplier generally keeps responsibility for the equipment, but states such as North Carolina, Maine and Vermont bar other companies from filling it, so you buy your propane from that supplier. Owning your propane tank lets you choose and switch suppliers, but you pay for the tank and installation, take on maintenance, and should expect a new supplier to inspect the system before its first delivery.
The short answer
If you lease a propane tank, the propane company owns it, and in practice you buy your propane from that company. If you own the tank, you can buy propane from any supplier willing to serve you, but you pay for the tank and its installation up front and you take on the responsibilities that come with owning pressurized equipment. Neither choice is right for everyone. This guide sets out what each option actually involves so you can compare them on your own numbers.
How a propane tank lease works
Under a lease, which some suppliers call a rental, the supplier sets its own tank at your home, keeps ownership of it and fills it. North Carolina's LP-gas regulators say that most of the time, when a propane company sets a tank, it keeps ownership, especially of above ground tanks. In North Carolina the supplier is required to label its tank with its company name so that you, and any later owner of the house, know whom to call.
The cost of the tank does not disappear; it is recovered another way. Maine's propane guide for consumers explains that because pressurized tanks are expensive, most households let the retailer own the tank, and the retailer factors that cost into the price of the fuel. Some dealers also charge an annual tank rental fee.
The most important practical point is that only the tank's owner can fill it. North Carolina law prohibits an LP-gas company from filling a tank owned by a competitor, Maine law prohibits dealers from filling tanks owned by another company, and Vermont's consumer protection rule says no seller shall fill a tank without the owner's permission. Maine's guide adds that all other states have similar laws. A leased tank therefore ties you to the company that owns it for as long as the tank stays.
What leasing gives you
Leasing has real advantages, and for many households it is the sensible choice.
- No large upfront purchase. You do not buy the tank, so you avoid paying for a tank of your own before the first delivery.
- The supplier keeps the equipment. North Carolina's regulators list responsibility for maintenance as a disadvantage of buying your own tank, which is the burden a lease leaves with the supplier. Vermont goes further and bars sellers from charging consumers to repair seller-owned equipment that malfunctions through no fault of the consumer.
- Flexibility to change size. If your usage drops, North Carolina's regulators suggest asking your supplier whether you should get a smaller tank. With a leased tank, that is the supplier's equipment to swap.
- One relationship. Deliveries, safety checks and service come from the same company that owns the equipment.
Leasing tends to suit people who use little propane, expect to move before an owned tank would pay off, or prefer not to manage the equipment themselves.
What owning your propane tank requires
Owning gives you control, and with it a list of responsibilities.
- The purchase and the installation. You buy the tank and pay a licensed installer to set and connect it. On this store, for example, a 250 Gallon Above Ground Propane Tank is $1,250.00, a 500 Gallon Above Ground Propane Tank - ASME is $1,650.00 and a 500 Gallon UG Propane Tank - ASME is $3,800.00. Installation by a licensed local installer can be added at checkout on some tanks. Permits and local requirements vary; see what installation involves.
- Maintenance. The tank is yours to look after, along with the cost of repairs.
- Insurance. Maine's guide advises checking that the tank would be covered under your homeowner's insurance policy before you buy.
- Inspection before a new supplier delivers. Maine's guide says a new supplier will require a safety inspection, will charge for it, and will not deliver to a tank it has not inspected. Separately, the National Fuel Gas Code (NFPA 54) requires the piping to be checked for leakage immediately after gas is turned on into a new system or into a system restored after an interruption of service.
- A system that meets code. Vermont's rule states that a seller is not required to deliver propane to a consumer whose tank or system does not meet NFPA 54 and NFPA 58. Keep your installer's paperwork.
- Proof of ownership. Keep the bill of sale. North Carolina's regulators note that ownership disputes have to be resolved between the homeowner and the propane company, and the receipt is the best evidence you have.
Every tank this store sells ships empty by freight. Setting the tank, connecting it, leak testing and the first fill are jobs for a licensed installer and your propane supplier, not a homeowner project.
What owning gets you
The payoff is choice. Maine's guide says that if you own your tank you are free to buy fuel from the supplier of your choice, and the cost of the tank is not added to the price you are quoted. North Carolina's regulators list a lower price per gallon as a possible advantage of buying and note that you can shop around between companies, as long as you check what a new company charges to inspect the tank. Propane prices are not regulated, and Maine notes that dealers price in volume tiers, with smaller customers paying more per gallon, so know your annual usage before you compare.
Leasing vs owning at a glance
| Question | Leased tank | Owned tank |
|---|---|---|
| Upfront cost | None for the tank | Tank plus installation |
| Who can fill it | Only the owning supplier | A supplier you choose, after its inspection |
| Maintenance and repairs | Generally the supplier; check the lease | You |
| Ongoing tank charges | Possible rental fee, or tank cost built into the fuel price | None for the tank |
| Switching suppliers | Old tank removed, new supplier sets its own | New supplier inspects and leak-checks, usually for a fee |
| Usually suits | Low use, short stay, hands-off owners | Higher use, long stay, owners who want to shop around |
Switching suppliers
If your tank is leased
You can change companies, but the tank belongs to the old one: it removes its tank and the new supplier sets its own. Read your contract first, because North Carolina's regulators warn that breaking an existing contract can lead to additional fees and charges. Maine's guide suggests planning the change for the summer, since dealers are busy in winter, and using up as much propane as you can beforehand to limit pump-out fees. Dealers generally reimburse you for propane left in the tank at the prevailing price, but Maine notes that state law does not require them to.
Some states set firmer rules. Under Vermont's rule, once a tank has been on the premises for 12 months or more, the seller may not charge a fee to remove its tank, pump out propane or terminate service. A Vermont seller with a duty to remove its tank must do so within 20 days, or 30 days for an underground tank, and must refund what you paid for propane remaining in a seller-owned tank within 20 days. Ask your state's consumer protection office what applies where you live.
If you own your tank
Switching is simpler. Call the new supplier, open an account and schedule its inspection and leak check before the first delivery. Ask what the inspection costs when you compare quotes.
Buying a house that already has a tank
Do not assume the tank comes with the house. North Carolina's regulators say propane companies usually keep ownership of the tanks they set, while buried tanks become the homeowner's property more often, but not always. A company may file a UCC-1 form with the county to document that it intends to keep ownership of a tank. Ask the seller and the propane company in writing before closing, and if the tank is leased, weigh that supplier's terms as part of the decision.
How to decide
- Find your annual propane usage from past bills.
- Ask your current or prospective supplier for its price per gallon with a leased tank and with a customer-owned tank, its rental fee, and any removal or pump-out fees.
- Get at least one other quote for an owned tank, including the inspection fee.
- Price the tank and installation. Size it with the propane tank size chart, compare placements in underground vs above ground propane tanks, check ratings in ASME vs DOT propane tanks, and see propane tank cost for what goes into the total.
- Compare the totals over the years you expect to stay in the home.
If owning comes out ahead, browse residential propane tanks or used and refurbished tanks, read shipping and delivery, or contact the store with questions.
Common questions
Can another propane company fill my leased tank?
No, not without the owner's permission. North Carolina law prohibits an LP-gas company from filling a tank owned by a competitor, Maine law prohibits dealers from filling tanks owned by another company, and Vermont's rule says no seller shall fill a tank without the tank owner's permission. Maine's consumer guide says all other states have similar laws. To change companies, the old supplier removes its tank and the new supplier sets its own.
Is it cheaper to own or lease a propane tank?
It depends on how much propane you use, how long you will stay and what suppliers near you charge, so compare quotes rather than relying on a rule of thumb. Owning means paying for the tank and installation up front. Leasing usually means a rental fee or the tank's cost built into the fuel price. Ask for the price per gallon with a leased tank and with an owned tank, plus every fee, and compare totals.
Who maintains a leased propane tank?
Generally the supplier, because it owns the equipment. North Carolina's regulators describe responsibility for maintenance as a disadvantage of buying your own tank, and Vermont bars sellers from charging consumers to repair seller-owned equipment that malfunctions through no fault of the consumer. Read your lease for the exact terms, including any annual leak detection or safety inspection fee, which Maine notes some dealers charge.
What happens to the propane left in a leased tank when I switch?
Dealers generally reimburse customers for propane remaining in the tank at the prevailing price, according to Maine's consumer guide, although Maine law does not require it. Vermont's rule requires a seller to refund what you paid for propane remaining in a seller-owned tank within 20 days. Read your contract, and use the tank down before the switch to reduce pump-out fees.
Do I need an inspection when switching suppliers with my own tank?
Yes, expect one. Maine's consumer guide says a new supplier will require a safety inspection, will charge for it, and will not deliver to a tank it has not inspected itself. The National Fuel Gas Code, NFPA 54, also requires the piping to be checked for leakage immediately after gas is restored following an interruption of service. Ask what the inspection costs when you compare suppliers.
When I buy a house, is the propane tank mine?
Not necessarily. North Carolina's LP-gas regulators say propane companies usually keep ownership of the tanks they set, especially above ground tanks, while buried tanks become the homeowner's property more often, but not always. A company may file a UCC-1 form with the county to document ownership. Confirm the tank's status in writing with the seller and the propane company before closing.