If your home is fuel oil heated, you should know that there are two options to pay for delivered fuel: Cash on Delivery (COD) or delivery contract. There are many types of contracts available. Some include “complete” solutions which may include maintenance and repair of your furnace when needed and automatic delivery where you basically receive oil according to the supplier’s own estimation of your consumption.

While this may be good if you’re too busy or lack knowledge of oil heating systems, COD option may be your best way of getting cheaper fuel oil. Of course, you need to be familiar with some properties of your heating system, such as oil tank size, age and condition of the burner and amount of remaining oil. Additionally, you should have some knowledge of basic maintenance tasks like filter replacement or cleaning.

When you choose cash on delivery, you get heating oil at a current market price which is usually significantly lower than the oil price which comes with a contract. You will not have oil burner maintenance and repairs covered but if you maintain your burner properly with an annual inspection and tune-up, the chances of having issues with your furnace are small.

oil-burner-service-contractNote that heating oil companies will need to cover all their possible risks for customers on contract. These risks range from furnace repairs to weather which determines gross consumption and wholesale prices. Due to all that, heating oil delivery companies will come up with a fairly high price of fuel oil. And if your burner is in good shape, whose burner repairs are you actually paying for?

COD deliveries mean that you always get heating oil at the current market price. In the last ten years oil prices remained relatively stable, although suppliers always had high long term price expectations for those on contract. Long term estimations most often proved to be exaggerated and contract oil prices stood at very high rate without a reason. The difference in price between contract and COD delivery was much greater than system maintenance costs it covered. So, while contracts may be good at saving you time, it is pretty different when it comes to saving money. With COD delivery you will also never need to fill your whole tank – simply, if the heating season end is near and you need only a half of your tank volume filled you can certainly order that amount. You can also choose your own supplier and use a different supplier every time your order heating oil. With contract delivery you will always need to pay for filling up the entire tank and you can only use one supplier.

With COD option you still have an opportunity to pay with your credit card so you can have a certain amount of comfort in planning your finances. And you can fill your tank during the warm season when home heating oil prices tend to be lower than during winter and this is another way to save.  You will never have to depend on a single supplier’s pricing and stocks. You will always be able to find the cheapest supplier when you need to fill your tank. To find current heating oil prices on Long Island just click on the Check Oil Prices link above and enter your zipcode.