Glossary termNo. 6 / 10
- Category
- Dealers & contracts
- Fuel
- Heating oil
- Source
- R.I. Gen. Laws
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.
A pre-buy protects you from mid-winter price spikes but offers no downside: if the market falls below your locked rate, you're still bound to the higher price. And because you've prepaid in full, you're an unsecured creditor if the dealer fails before delivering — a real risk in Rhode Island and Massachusetts, which — unlike some neighboring states — don't require dealers to financially secure prepaid funds, though § 5-82-1 and Chapter 93A still regulate the contract and give you recourse.