What you pay each way
Leasing — typical annual tank rent of $50-$150, often waived above a minimum annual purchase volume (commonly 400-500 gallons). You pay the dealer's quoted per-gallon rate, with limited ability to shop competitors because the dealer owns the tank.
Buying — upfront cost of $1,000-$3,500 for a typical 500-gallon aboveground ASME tank (more for underground installation, more for 1,000-gallon). No annual tank rent. You can shop any dealer at every fill, which usually translates into modestly lower per-gallon rates and stronger negotiating leverage.
The breakeven math
The customer-owned tank breaks even when the cumulative gallon-price savings exceed the upfront purchase cost. Typical math for a 500-gallon aboveground tank:
- Heavy user (1,500 gal/yr). Saving ~$0.20/gal through shop-around freedom = $300/yr. Tank pays back in roughly 5-8 years.
- Moderate user (700 gal/yr). Saving ~$0.15/gal = $105/yr. Tank pays back in roughly 10-15 years.
- Light user (300 gal/yr). Saving ~$0.10/gal = $30/yr. Tank pays back in 30+ years — usually worse than leasing.
Beyond breakeven
The math isn't only about gallons saved. Customer-owned tanks have additional benefits and drawbacks worth weighing:
- + No risk of tank pickup fees at contract exit (you keep the tank)
- + Better negotiating leverage at every fill
- + Easier to switch dealers without a tank-swap
- − Maintenance and replacement of regulator and connections is your responsibility (typically $200-$500 per regulator replacement, 15-25 year lifespan)
- − Resale of the tank when you sell the house is often subject to a buyer's lender requirement that the tank be in good standing
Anti-fill state laws
About 10-15 US states have anti-fill statutes that constrain how dealers can lock customers to leased tanks (mandatory disclosure, capped pickup fees, right to purchase a leased tank at fair market value). These laws improve the lease-side economics slightly. Check your state page.
FAQ
Should I buy my propane tank?
Buy if you burn 1,000+ gallons per year and plan to stay in the home long enough for breakeven (5-8 years for heavy users). Lease if you burn under 500 gallons per year or are short-term in the home.
Can I buy my existing leased tank from the dealer?
Sometimes. Some states require dealers to offer tank purchase at fair market value when customers switch. Other states do not. Ask your dealer; if they refuse and you live in a state with anti-fill protections, escalate to the state attorney general consumer protection division.