Glossary of Terms
Plain-language definitions for the contract and delivery terms you'll see across HeatPrice's guides.
Terms & definitions
- Automatic delivery
- A model where the dealer tracks your fuel use — from heating degree days and your home's k-factor — and schedules refills before you run low, so you never watch the gauge. You pay the dealer's price on the day of delivery.
- Budget plan
- A payment-smoothing arrangement — not price protection. The dealer estimates your annual heating cost and splits it into roughly 10–12 equal monthly payments, then reconciles any credit or balance at year-end.
- Cash on Delivery (COD)
- A buying model where you pay for your heating oil in full at (or just before) delivery — cash, check, or card — rather than being billed later or on a plan.
- Ceiling price
- The maximum per-gallon price in a price-cap contract — the "cap." You never pay above it, but you can pay below it if the market drops.
- Fixed-price contract
- A contract that locks a single per-gallon rate for a set volume over the season — but, unlike a pre-buy, usually lets you pay on each delivery instead of all up front.
- Heating degree day (HDD)
- A measure of how cold a day is for heating purposes: how far the day's average temperature falls below 65°F. A day that averages 25°F counts as 40 heating degree days (65 − 25).
- K-factor
- A home's fuel-efficiency constant used to run automatic delivery: the number of heating degree days that pass per gallon of oil it burns (degree days ÷ gallons used), typically ~3 to 30+ depending on size, insulation, and system efficiency.
- Pre-buy
- A contract in which you pay up front — usually in the summer off-season — for a set number of gallons at a locked price for the coming winter, and the dealer delivers against that prepaid balance.
- Price-cap contract
- A price-protection contract that sets a maximum ("ceiling") price per gallon you'll pay, while still letting your price drop if the market softens. To offer it, the dealer hedges with options and charges you a non-refundable fee — a per-gallon premium or a flat enrollment charge.
- Will-call delivery
- A delivery model where you monitor your own tank gauge and call to order oil when you run low, paying that day's price.