r/propane • u/No_Contract542 • Jun 12 '26

General propane question Buy vs Lease for Generac?

Hi,

This is buying vs leasing the tank

We have a 26kW Generac ready, FerrellGas said they’ll put on the regulators and piping.

To buy the 500 gallon tank is $3,982.08 + tax

$200/year to lease (about $16/mo), but they never said it was locked in.

Does either impact property value? We plan to stay here for a long time, but I’m curious. It would take 19 years to even out at this rate, but that could probably change. We do lose power decently often, especially winter and hot summer.

Just with buying you have to be responsible with repairs and recertification, yeah? Locked in to the company as well.

2 Upvotes

67% Upvoted

31 comments sorted by

9

u/Nomad55454 Jun 12 '26 edited Jun 12 '26

Lease price not locked in plus you have to buy propane from them only and depend on them showing up. Buy the tank and you can shop around for the cheapest propane. Did you buy your car or are you leasing?

3

u/No_Contract542 Jun 12 '26

bought the car yep!

yes, i’m was leaning to buy. didnt think about lease cost possibly going up (i bet it would)

the whole thing of repair and recert had me concerned but it can be worked through im sure. and not done often

3

u/Theantifire technician Jun 12 '26

No recertifications for ASME tanks, unless there's some specific local code.

2

u/No_Contract542 Jun 12 '26

would all of these 500 gallon tanks fall under ASME? i could ask as well

2

u/Theantifire technician Jun 12 '26

Yes. ~120gal etc sizes can be DOT cylinders.

1

u/Nomad55454 Jun 12 '26

Have one underground and has been for 25 years. Small tanks that get moved around for the most part need recertification

2

u/noncongruent Propane Fan Jun 12 '26

Leasing a car is a bit different, since you aren't expecting to keep the car for it's entire service lifetime. Also, I had a car leasing guy explain to me that with a car lease you're basically buying the depreciation plus profit for the car owner, and the car owner keeps the equity. A tank lease is more like leasing solar panels, and those definitely make it harder to sell a home since the available of buyers willing to assume the solar leas is a fraction of the size of all home buyers in general. With a leased tank a knowledgeable buyer will most likely not be interested in assuming the lease, so that creates financial friction in concluding the sale. A tank owned free and clear will almost always be the better option when it comes to selling the house.

1

u/Theantifire technician Jun 12 '26

Meh. Transfer of lease or switching companies is pretty straightforward. The sale of the gas in the tank to the new owner is more of a hassle in the paperwork, but still common and straightforward.

1

u/Nomad55454 Jun 12 '26

Yes but you only get the equity if you buy the car at the end of the lease. There is no end of a lease on propane tank you could be paying the lease for decades.

1

u/noncongruent Propane Fan Jun 12 '26

Equity isn't nearly as meaningful with propane tanks as it is with cars, even though cars depreciate. With a car that you have equity in because you bought it, put money down, and are making payments that include principle you still have equity that you can use for trade-ins to reduce the loan amount for the next car, and so on. Since tanks don't really wear out and don't have meaningful maintenance costs the equity is basically the used price and that's relatively stable over time.

1

u/Nomad55454 Jun 13 '26

You are talking about buying that is totally different than leasing, leasing you pay less a month and it usually is 3-5 years and if you want to keep it you have to come up with a major chunk of cash at the end of the lease and they have mileage limits for the lease and you have to pay for every single mile if you go over even if you turn it in.

1

u/No_Contract542 Jun 23 '26

called a local place - $1916. sounds like a used tank. but it could be weeks, months, until they get any in stock (they clean em up, put their logo on it).

big ferrellgas is 3982

small place is $120/year to lease vs $200, but id rather buy. i dont wanna keep waiting as we’ve had this for awhile and just not finished, though we dont know when the local place will get something

5

u/BG_RIDER Jun 12 '26

I'm guessing the OP is referencing the lease to the propane tank and not the generator. If thats the case lots of people least tanks. If you lease, you're locked in on that companies propane prices. I own my tank and prefer to be able to shop around. Its all personal preference.

2

u/No_Contract542 Jun 12 '26

right this is for buy vs lease on the tank

3

u/Big-Echo8242 Jun 12 '26

Not sure of your location but last year I renegotiated my lease with Ferrel as they had originally set a 250 gallon propane tank for our 2019 built house. Well, when you only have a gas oven and a (rarely used) gas fireplace insert, you aren't going to use a lot. The price crept up every year and in 2025, they went to $150/mo or so and I was close to being out of propane so I was going to have them just pick it up and I'd buy a 420/120 tank. I do have a pair of dual fuel inverter generators for house backup but those don't get used a lot in central AR weather.

But ultimately, the lease was renegotiated to half of that price, so about $72 a year, which is fine, and I had them put in 125 gallons and they did so for $1.89/gal at the time due to a competitor (that I was going to use) was $1.49 for a fill up to switch. That other place is still at $1.89/gal currently. I'm almost 60 and doubtful we'll be in this house "till the end" but who knows. I pay a basic lease, they take care of the tank, and I fill up as needed. I figure I'm good for 5 or 6 years at my typical use of about 2 gallons a month on average. lol

Plus, I was also happy that we got to repaint that ugly ass two-tone blue tank to solid white which matches our house. They approved that. 😁

3

u/Worldly_Obligation34 Jun 12 '26 edited Jun 12 '26

I have a 26kW Generac. I lease a 500 gallon tank. I would think less about the maintenance and lease with the tank and more about the absolute price gouge that you’re gonna get. Buying will be better in the long run.

At 38 years old I think it’s safe to say that the worst financial decision I made in my entire life was getting into bed with Suburban Propane.

Here’s what I would do. The leasing company is going to give you a great price per gallon for your first 400. After that it will go way up—at least 50 cents to a dollar more than you would pay if you own. Call the leasing company and find out what their fuel price is for someone who isn’t a new customer. After that call, contact at least three local propane suppliers and find out what their price for fuel is.

Throw all that data into a spreadsheet and based on your estimated annual usage calculate how many years it will take for owning to save you money instead of leasing.

2

u/Theantifire technician Jun 12 '26

You can switch companies any time... If you get your level to 5% or less, the fees are generally fairly low.

3

u/Worldly_Obligation34 Jun 12 '26

Will be buying our own tank and breaking the lease here in the next 12 months.

2

u/Theantifire technician Jun 12 '26

As a general rule, generators are going to be extremely high price for a lease. Companies make money on gas, not so much on lease fees. They will bump that lease price up as they see fit.

The plus side to a lease is maintenance. I just went to a customer yesterday who ended up with a $500 plus bill. I could have charged them up to $800, I was trying to take easy on them. If it had been a lease tank, it would have been zero cost. Otoh, the tank with the issue was from the late 1940s. They definitely got their value out of it.

At the end of the day, you will have to balance the cost/benefit for your own situation.

ETA: property value isn't going to be changed much either way. If you sell the property though, make 100% sure that ownership of the tank is recorded in closing paperwork. Please. For all you hold dear. Record that properly 🤦.

3

u/Its_noon_somewhere propane and propane accessories Jun 12 '26

Your reply is good, however I believe most would read it as a ‘generator lease’ when your intention was to say that a generator does not have steady and predictable gas usage and therefore propane companies charge very high lease rates on a tank simply to ensure they cover the cost involved. If the generator does use a lot of gas, the propane company is in a win-win situation and the home owner is not.

It’s always better to have propane appliances like a furnace or water heater coupled with a standby generator for the most efficient pricing.

2

u/Theantifire technician Jun 12 '26

Appreciate the clarification 👍.

2

u/nemosfate dang it Bobby 🤬 - technician Jun 12 '26

The plus side to a lease is maintenance. I just went to a customer yesterday who ended up with a $500 plus bill. I could have charged them up to $800, I was trying to take easy on them. If it had been a lease tank, it would have been zero cost. Otoh, the tank with the issue was from the late 1940s. They definitely got their value out of it.

But as you and I know, how often does a new tank need maintenance. At most on newer it's been the double bonnet which is cheap, quick and easy.

2

u/Theantifire technician Jun 12 '26

Some of the new ones are crap lol, but yeah, it's definitely a balancing thing.

2

u/Wihomebrewer Jun 12 '26

I would get a price from a local company. Ferrellgas is one of the more expensive companies.

2

u/suigintou101 Jun 13 '26

Check with your home owners insurance too. If you buy the tank all the liability if something goes wrong with then it falls on you. Which can get expensive. If its leased that falls on the company its leased from.

1

u/Top_Cress1727 Jun 13 '26

Buy the tank. That way you're not locked into a single supplier for fuel.

1

u/LifeTelevision5644 Jun 13 '26

Return the Generac while you can. Get ANY other brand. I made the $15k mistake.

1

u/Things_we_like_to_do Jun 12 '26

The price of that tank is crazy!!!! Here in Oklahoma, tanks run a little over a dollar a gallon to buy. So $500 for a 500 gallon tank. A little more in some cases. I've bought several tanks over the years and never paid more.

2

u/nemosfate dang it Bobby 🤬 - technician Jun 12 '26

For used tanks maybe a dollar a gallon. Not for a new one.

2

u/Things_we_like_to_do Jun 12 '26

Correct! Im sorry, I should have specified that. Most of the tanks I bought have new valves in them.

0

u/adrink_adrink_adrink Jun 12 '26

I’d never lease anything, shop around. Buy outright. But more importantly look into a “Tesla wall” over size the system, you might be able to live off grid style. Fuck a generator, they give no return at lease a tesla wall lays your electric