Today, while reading in an interview in a HVACr trade journal, I read a quote that summed up an important point:

It’s not about the box, it IS about the whole house

In this case, the “box” is the new AC and heating equipment you are thinking about having installed. And the whole house (actually the part HVAC insiders call “the envelope”) interacts with the outside elements to determine how comfortable you are inside, how hard your AC and heating equipment has to work, and how much you pay (or save) each month in utility bills.

Here’s a real life example from a reader who sent an email to us recently.

This fellow lives in the northeast U.S., and was quite surprised when his local AC contractor discouraged him from buying the top of the line, most efficient system. Rather, the contractor advised him go for the 16 SEER A/C unit, and to take the extra $2,000 the most efficient AC was going to cost and use that to add insulation to his attic and seal up leaky walls and electrical outlets.  Although the summer cooling needs of this northeastern state are lower than central Texas where we are, the same principle applies everywhere:

For each home or building and its climate, there is an optimum mix of heating or cooling efficiency attributes and energy efficiency improvements that could be done to the “envelope” that interacts with the outside air.

Since you only buy an new AC and heating system every decade or so, you don’t have to know everything about this topic. Your best bet is to be aware of the big picture and ask the right questions. This way you will find a local contractor who uses best practices (training, certifications, experience & business practices) and takes the “whole house” approach.

Let us hear from you if you have experiences to share along these lines

This morning, I received a “community savings” free newspaper for my neighborhood. In it, a local heating and AC company advertised in bold black letters “2 ton 16 SEER A/C System with Gas Heat – Installed – 10 year warranty $1,550” The price was in big, bold red letters so it would really stand out. In much smaller black print below was the phrase “after rebates and tax credit, plus tax”. Then below that, in white lettering on a light blue background (which I had to look really closely to see…), there was the “catch all” disclaimer, an asterisk plus “for most installations”.  I’ll write more about this specific ad later in the post.

Folks, this is a good example of why we created the free cost comparison grid and the video on the same page that explains why and how to use it.

Your overall goal is for your new HVAC system to deliver the most comfort and the lowest bills over the life of the system.  The lifetime cost of your system will likely be considerably more than the original purchase price.  Why? Because it includes monthly energy bills, maintenance,  repair bills, and the number of years that pass before you have to buy another one.

When comparing price quotes or bids for a new AC and heating system, there is a how to buy checklist you should use . The first thing on the list is the quality of the installation.  Once you have that screening done, and you have two or three bids from contractors you know to be reputable companies, you can use our grid to compare features and price of each bid “apples to apples”.

Back to the original ad example

The ad described in the first paragraph rolls in rebates and tax credits into the advertised price. Elsewhere on the page, these were stated to be worth up to $3,600 in value. On our comparison grid, we specify that these be separate line items. The reason: putting each bid into a standard format reduces confusion and “creative pricing”. As a side note, since not all new equipment qualifies for the federal tax credit, be sure you get the qualification specs and info for it in writing.

As for the disclaimer for most installations, there was no way to say if this company applies this honestly or not. I have never heard of them. I can say, however, that since new AC and heating equipment has to be installed into your existing home or building (with the wiring, and possibly your ductwork) there are many ways a bidding company can either cut corners (to keep the appearance of the total package price low) or to leave themselves “wiggle room” for adding on cost midway through the installation. Or both. Once your sign the contract and the work starts, you are no longer in an optimum negotiating position, unless you covered the possible variables and cost options for them carefully in writing and in advance.

Please share your experiences, good or otherwise, so others can learn from them.

Frequently, we learn lessons from other industries that apply well to home heating and AC.  The other day, I had to visit my independent auto mechanic shop. While in his waiting area, I overhead him tell another customer that he “never recommends his customers to buy third-party extended warranties on their car or truck”.  He went on to say that that third party warranty companies were diligent at selling warranties /repair insurance and collecting premiums, and not-so-good at being around later or paying out for claims.  In case the term is new to you, ‘third party” simply means a company not involved otherwise in the transaction.

While monitoring HVAC industry forums and news, what I have read seems to generally support my mechanic’s overall assessment on extended warranties offered by third parties.

First, let’s be clear on the difference in the types of warranties that you can buy for your home heater or air conditioner system. The following parties typically offer warranties on heating and A/C equipment, either when it is first installed or sometimes later. :

• Manufacturer of the equipment
• Local dealer or independent contractor who installed the equipment
• A third party insurance or warranty company,  who is not the manufacturer or installing contractor.

Extended warranties will usually provide different terms for (or ways to dictate coverage of) the following:

• Main Components  (compressors, condensers, heat exchangers, etc)
• Parts (other than the above)
• Labor to diagnose and fix any warranty claims (this can be a higher amount than parts)
• An amount of time the warranty covers
• Deductible (amount that must be paid by you later before warranty starts paying)
• “Ordinary wear & tear”, abuse or neglect vs. a failure or repair covered by the warranty
• Which repair company is required to do the work for you to be eligible for payment
• Does the warranty pay for the repair directly, or do you have to pay for it and apply for reimbursement

Summary:

• Higher efficiency or more sophisticated heating, cooling, heat pump or indoor air quality equipment increases your likelihood of needing /using  an extended warranty.
• A yearly maintenance plan is something most owners should have but do not
• If you only have budget for one of the two, go for a yearly maintenance plan over an extended warranty
• Always be clear on what the manufacturer’s warranty covers and exactly what any extended warranty actually gains you above what you already have from the manufacturer or installer
• If you have the discipline, you could take the money you were going to pay an extended warranty, deductibles, and excluded items and instead, put it in a savings account. You can use those funds to pay for your own maintenance and repairs later.
• Regular maintenance will help prevent the need for repairs from neglect
• If you decide to go with an extended warranty, those from a large manufacturer are usually a better bet than the other two categories.  Sometimes dealers are owned by the manufacturer. It helps you to know if they are or are not.

If you have experience related to this, whether you agree with the comments above or can offer something to the contrary, please post your comments.