Tag Archives: costs

How To Finance A New Heating and Air Conditioning System

With utility costs going up every month and credit getting harder to find, we want to offer suggestions on how to finance a new heating and A/C system for your home or small commercial building. Making a smart decision to replace your broken or inefficient HVAC system can deliver more comfort and lower your heating and cooling bills every month. Using a cost savings estimator tool (all of which must make some assumptions to cover unknowns), you can easily figure out the payback period for the new equipment. (We wrote about those in our blog two months, in August). Since a heating and AC new system should last much longer than the payback or break-even period, you can get a return of your investment and on your investment.

Heating and AC System Financing Through Your Installer
The first place to look for financing is through the company that installs your furnace and A/C system. For many reasons, you must pick this company very carefully. It is by far the most important decision you will make towards your comfort, costs, and overall satisfaction with a new HVAC system. The local company that installs your system will usually have financing programs from the equipment manufacturer. They might also have arranged third party financing through a local or national lender. Examples of programs from a manufacturer would 12 months same as cash. As in all financial and contractual matters, be sure to read the fine print, front and back, of all documents. Also, pay special attention to the requirements for paying on time and penalties if you were to be late with payments.

Check Out Your Local Credit Union for HVAC financing also
Another, often overlooked, source of financing is through a local credit union. Credit unions have a long history of lending locally. They typically have lower fees and are usually more customer oriented than commercial banks. For a long time, most credit unions were only available through employers. However, in recent years, there are credit unions that are generally available to anyone in the community. This category is called community chartered credit unions. To find one in your area, use a search engine and enter a credit union and your city or a community chartered credit union or visit the NCUA website.

If there is not a community chartered credit union in your area, you might be able to get access to one by joining a organization. As an example, in our hometown of Austin, there is a really good credit union for the University of Texas. Originally opened for faculty and staff, now anyone in the community can be a member by joining the nearby food coop.

Utility Company or Other HVAC Rebate Programs
Regardless of where you finally get financing, remember to ask about rebate programs. These are often from your utility providers, but can also be local, state, or federal programs targeting your area. You might start there first and see if they list lenders who are approved to apply the rebate program.

We look forward to reading your ideas and experiences on this topic.

Flat Rate Pricing in Home A/C and Heating Repair

We frequently get questions from homeowners about repair costs for their central heating and AC equipment. In this post, we will give some basic definitions so you can understand cost related terms when you hear them. Basically, there are two pricing models, flat rate pricing or labor (time) and materials. First we will outline some features that all HVAC repair work has in common.

Trip and Diagnostic Fees
Known in the industry as “T & D” fees, among other names, this is the cost for the phone representative or dispatcher to make your appointment and get the repairman and truck to your house or building and diagnose the problem. No matter which pricing model covers the repair work, you are unlikely to get around the T&D fee. With gas at around $4 a gallon, the trip portion of this cost is mostly going up. Depending on the time of year and part of the country you are in, this cost ranges from about $50 up to $100 or more. When you call in to schedule the work, this is the number you will usually be quoted. The second part of the work, once the problem has been diagnosed, usually follows one of two pricing methods:

Labor (time) and Materials
This type of pricing, also known as “parts and labor”, has become less common. With this pricing structure, you “get the news” of the actual cost you will pay upon completion of the work. Under this model, you would be quoted the hourly rate of the repairman or repair crew plus the cost of the parts, refrigerants, and supplies. The most common concern about this model is that it focuses a lot of energy (not always positive energy, either) on how long the repair takes, especially if the repair truck has to go for parts, etc. In theory, the homeowner bears more of the risk or receives the benefit of lower labor cost, depending on whether the repair drags on for hours or goes really quickly. This is a good model to use if you know for sure that the repairman is technically competent, fast, focused, and honest.

Flat Rate Pricing
In the flat rate pricing model, the repairman has a manual that tells them how long it should take to fix the problem that has been diagnosed, usually to a fraction of an hour. He or she takes this standard number in dollars, adds the price of the parts and tax (if applicable for your area), and the total is the flat rate price you get quoted for the whole repair. Whether the repair actually takes less time or more time than the repairman’s book listed, your total cost was known and agreed to ahead of time. This method rewards fast workers and tends to reduce squabbles with customers over repair time. The main challenge: some companies provide pay incentives for volume and speed. These incentives can distract workers from being as thorough as they might be in the labor and materials model. Not finding all the problems leads to what are know in the HVAC industry as callbacks, which are unfortunate for the homeowner and repairman.

Having said all that, the flat rate model tends to be used more often now. You may not have the option for the labor and materials anyway. Under all scenarios, you should now be able to understand price quotes better and ask the repairman if he/she checked the whole system for problems or assumed that the problem they found first is the only one present.