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The Truth About Heating Oil Service Contracts

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It’s February, 2020, which means it’s been a few months since we launched FuelSnap. As you can imagine, we tell everyone we know about FuelSnap. The feedback has been incredible, and we especially love telling folks on automatic delivery about FuelSnap. They are super excited about saving money on heating oil, but often ask: “what about my service contract?”

Heating Oil Service Contracts are commonplace for homeowners on automatic delivery. They give the homeowner peace of mind, and a number to call if the heat shuts off in the middle of the night. There are several myths about service contracts though, and we break them down here.

Myth #1: Only with Automatic Delivery

Many oil companies require you to sign up for automatic delivery to get a service contract. They scare you by saying things like: “We can’t risk you getting waste oil delivered by some unscrupulous company. Therefore, you have to buy all your heating oil through us.” The reality is, there are hundreds – thousands, actually – of reputable heating oil companies to buy from. Just read the reviews before hand, and NEVER order from an anonymous dealer online.

Further, there are actually plenty of companies that DO offer service contracts without forcing you onto automatic delivery. One such company is DollarWise Oil, who as of this writing offers contracts starting at $199. You get 24/7 support, and DO NOT have to buy all your heating oil through them. In addition, the service contract includes an annual tuneup / system cleaning. This is in their best interest, after all, since they would be best off if they never had to visit your house in the middle of the night. Read the fine print though, and expect to pay some of the parts and labor on an emergency call.

DollarWise Oil offers service contracts without Automatic Delivery.

Another such company is Ryan Anthony’s Heating Service, down on Long Island. They are a highly-rated service company that offers service contracts. They will be the first to tell you to buy your heating oil from whomever you’d like. Get a service contract with Ryan Anthony’s and you can even pay a small monthly fee throughout the year. This way you’re covered no matter what time of year something breaks down. Then, go ahead and shop around each time you’re low on oil. The savings on oil vs. automatic delivery will more than pay for the service contract.

Ryan Anthony’s Heating Service offers service contracts with low monthly payments for year-round coverage of your HVAC system.

Myth #2: My Company Offers a “Free” Service Contract

We hate to break it to you here, but nothing in life is free. When a company promises a ‘free’ service contract when you sign up for automatic delivery, it comes with a cost. Heating Oil is typically marked up an additional $0.40 – $0.80 per gallon for automatic delivery vs. on demand. In CT, we’ve even seen it as high as an extra $1.20 per gallon for automatic delivery! So let’s run the numbers on that ‘free’ service contract:

  • You’ve got an average-sized home that uses 800 gallons per year.
  • You end up paying, conservatively, $0.60 per gallon extra for automatic delivery.
  • That ‘free’ service contract costs you 800 x $0.60 = $480!

For $480, you should be receiving – at the very least – an annual tune-up.

Myth #3: I Can Only Get 24/7 Support With a Service Contract

The best thing you can do for your HVAC system is get a tune up every year. Check Google when you get a chance…there are thousands of qualified, local service companies out there. Find one that you can trust, and have them out to service your system on a regular basis. Once you’ve established a relationship with this company, you know that they will take your call if you need emergency service.

You may be wondering, though: isn’t emergency service expensive? It most certainly is! But again, if you run the numbers, spending $500 for an emergency service call once every five years might not be a bad deal. If you compare that to the extra $480 a year for a ‘free’ service contract, you are actually better off not having the plan. Now, if you have an older system that breaks down twice a year…you may reconsider buying a service contract. But then again, it may be time to upgrade to a new system anyway!

The bottom line to ensuring that your family stays warm all winter is that you want to keep your system well-maintained. This can come in the form of regular annual maintenance, and a service plan from a trusted company. Make sure you do not fall for the ‘automatic delivery’ trap though; find a company that allows you to shop around for oil. This will save you hundreds of dollars a year, automatically. You can use the savings to buy a Smart Oil Gauge, then really take control of your heating oil :-).

Happy Heating,

Steve