Abstract: A compact vehicle heating system and method is provided which includes mechanisms to selectively shut down heating systems. For example, when domestic hot water is required, space heating and engine preheating systems can be shut down in order to provide priority heating to the domestic hot water. When the demand for domestic hot water is lower, the space heating and engine preheat systems can be reactivated. In accordance with other embodiments of the invention, a domestic water tank pre-heating system is provided to pre-heat domestic water within the domestic water tank. In accordance with still other embodiments of the invention, a water saver system is provided for limiting the wasting of clean but tepid water.