Propane tank contract buyout

[Chip86]

Hello everyone, I'm new to the board and would like to thank the members for all of the good info I've gotten here. I'm considering purchasing the in-ground 500 gallon propane tank that is owned by my propane supplier. I was wondering if anyone has done this recently and whether the amount paid was based on the market value, a sliding scale, or the original new value of the tank. My tank is about 10 years old, so there seems like there should be some allowance for the age, but I don' know.

 

[BungeeII]

I reckon it's going to depend on your vendor. Consider this, if you own your own tank, you're no longer restricted to buy from them.

 

[kenmac]

Check around.


Some may not fill it if it's under ground. Around here you can no longer have a
underground tank. Due to corrosion issues.... No way to inspect the tank

 

[kennyd]

Check around.


Some may not fill it if it's under ground. Around here you can no longer have a
underground tank. Due to corrosion issues.... No way to inspect the tank

Interesting, in my area-If it's larger than 250 gallons it HAS to be buried.

 

[Lasgambler]

Check around.


Due to corrosion issues.... No way to inspect the tank

Good Point. I have not ever heard that before. Out here in Western Arizona and you are going to bury a tank you have to buy it.

Alot of the homes I build are "Off Grid" and the owners do not want to look at a tank sitting there. We buy and bury 1000 gal. tanks. The supplier does a good job of coating the tanks prior to delivery.

When we backfill we will put one large bag of Magnesium Diodes at each end.

The propane companys probably figure that if your tank developes a leak,

1. You will buy more Propane

2. You may have to buy a new tank.

We have a company near here called, "Passmore Gas".

 

[kenmac]

When we backfill we will put one large bag of Magnesium Diodes at each end.

That is a good idea. Anodes will sacrifice themselves to save / protect the metal. But, how long will they last / deteriorate ? That depends on the soil make up & size of the anodes. I have seen (2) 20 lb anodes deteriorate ( within 1-2 years) due to very poor soil conditions. Soil conditions can be very good in one area & very poor in other areas within blocks of each other

 

[bkuhn]

Chip, I looked into the same thing a few years ago when I first moved into my place (which had a rented tank). The supplier charged MUCH more for fuel than other competitors. At the time they wanted about $1200 to buy out the 500 gallon tank (which was in pretty rough shape). This was the same price as a new tank (they did not take into account that it was a used). I had them pick it up (was not using propane at the time) then last year revisited the idea. Found out that tank prices had gone up a bit in since I first looked into it and were now up to a little over $1500.

I shopped around craigslist and came across a deal on a 500 gallon tank for $500 dollars. I sanded, painted, and replaced all the valves on it for about $150. So for $650 and a little work I placed my own.

No kidding, on the first fill up I saved enough to pay for the new tank outright.

They do not come around all that often but if you go to google and put in "craigslist 500 gallon propane" it will give you all of the listings for tanks (not just what is in your imidiate area, like you'd find if you searched your local craigslist site). This is how I found mine (it was about an hour away from where I live).

Hope this helps,
Brad

 

[bjr]

I found a 100gal. about 3hrs away for $200 painted it and did a air pressure check and it was good to go. It's amazing at the price varation in my area. I do shop around for home delivery now. bjr

 

[Chip86]

Chip, I looked into the same thing a few years ago when I first moved into my place (which had a rented tank). The supplier charged MUCH more for fuel than other competitors. At the time they wanted about $1200 to buy out the 500 gallon tank (which was in pretty rough shape). This was the same price as a new tank (they did not take into account that it was a used). I had them pick it up (was not using propane at the time) then last year revisited the idea. Found out that tank prices had gone up a bit in since I first looked into it and were now up to a little over $1500.

I shopped around craigslist and came across a deal on a 500 gallon tank for $500 dollars. I sanded, painted, and replaced all the valves on it for about $150. So for $650 and a little work I placed my own.

No kidding, on the first fill up I saved enough to pay for the new tank outright.

They do not come around all that often but if you go to google and put in "craigslist 500 gallon propane" it will give you all of the listings for tanks (not just what is in your imidiate area, like you'd find if you searched your local craigslist site). This is how I found mine (it was about an hour away from where I live).

Hope this helps,
Brad

Brad,

Thanks for the info on the used tanks and your experience with the supplier, I'm hoping to work out a reasonable price on the existing tank to avoid digging up the yard. I'll post back later with the outcome. Thanks to all that replied.

 

[rcaretti]

I bought mine out a few years ago. It was a sliding scale (I have the contract) starting at $1600 for the first two years, then $1250 or so from years three through five of six, then down from there. I am having the same company fill it, but it's 25 or 30 cents cheaper a gallon.

I'd bet the builder got a fee of some sort for placing the companies tank.

RJ