Economy & Policy

Replacing your HVAC system can be expensive … here’s how to get the best value


With summer in full swing, it might be time to starting thinking about upgrading your home’s heating, ventilation and cooling (HVAC) system.

“Many homeowners don’t think about their HVAC system until it breaks,” says Dave Moody, vice president of marketing for Service Experts Heating and Air Conditioning, one of North America’s largest HVAC contractors.

“You don’t want to be forced to make decisions on purchasing a new system on the coldest or hottest day of the year. Ideally, consumers would approach this like any major purchase, such as a car,” adds Moody.

How can you get the most value from an HVAC system?

Equipment: What to Look For

Most people buy traditional split-system air conditioners and gas furnaces. Including installation, expect to spend $5,000 to $10,000 on an air conditioner and $5,000 to $7,500 on a furnace.

Cost depends on brand, size and energy efficiency. Consumer Reports rates American Standard, Trane and Bryant air conditioners as the most reliable, and Amana, Goodman and York as most problematic. American Standard, Trane and Carrier lead for furnaces, with York a distant last.

Suzie Newsome, co-owner of Service Pros Plumbing, Heating and Colling in Tempe, Arizona, says that for efficiency, it’s best if your furnace and AC are the same brand. Some brands can be combined, but others are incompatible. Look for a minimum 10-year warranty on the unit and 3 years on labor.

An honest contractor will offer several unit options, Newsome says. “Even if they are only a rep for one manufacturer, they should give you multiple choices. If they only offer one model, then they’re pushing for bigger profit margins at your expense.”

It is okay, however, if the contractor only carries one brand, as long as it’s a good one. “Contractors often have to pay yearly fees and install a certain dollar value of equipment to be a dealer, so that limits the number of brands they’ll install,” Newsome says.

Furnaces are rated by annual fuel utilization efficiency (AFUE) and range from 80% to 98%. That means you’re losing 2% to 18% of your heat—before duct leakage.

Central air conditioners are categorized by seasonal energy efficiency rating (SEER), which can range from 13 (least efficient) to 25 (most efficient).

Units can have single-stage, two-stage or variable speed operation. Single-stage costs less but uses more energy and lets the temperature in your home fluctuate more.

Any unit must be properly sized to heat and cool your home effectively and efficiently. Furnace sizes are expressed in British thermal units (BTUs) (e.g., 60,000 BTUs). Air conditioner sizes are expressed in tons (e.g., 3 tons).

You aren’t getting a good value if you buy a smaller or larger unit than you need. Your contractor should perform what’s called a “Manual J load calculation” that considers your climate and your home’s construction to determine what size units to install. The wrong size unit may cycle on and off frequently, causing it to wear out faster and preventing your home from maintaining a comfortable temperature and humidity level.

Are higher-efficiency systems worth it? It depends on the payback period in utility bills (shorter in more extreme climates) and how important environmental concerns are to you. Rebates, tax credits and special financing may be available on more energy efficient models, but the payback period on pricier equipment may still be too long even with these incentives. Testing and inspections required for energy incentives may cost extra.

Contractors: How to Choose

Hiring the right contractor is essential to getting a well-functioning, long-lasting HVAC system.

Get detailed bids from three contractors. Not only will you get a range of prices and options, you’ll get a range of opinions that will help you assess what you really need.

Check each contractor’s license status and number of years in business with your state licensing board. A company that’s been around longer is more likely to be around to service your system later.

Make sure they’re bonded and have general liability and workers’ compensation insurance. If your state licensing board can’t tell you, ask to see copies of these documents from the contractor, then call the issuing agencies to verify them.

Ask if subcontractors will perform any work. Newsome says a good contractor will not use subs to install units — only for related work like insulation and duct cleaning. Get the names of any subs and check their licensing, bonding and insurance, too.

Technicians should have and should follow Quality Installation specifications.

Each bid should itemize the price of the unit and any add-ons, not just show a grand total for a laundry list. Make sure permits and disposal of your old equipment are included.

Newsome says cost-increasing change orders are rare if the contractor does a proper inspection before preparing your quote.

Common Upsells: Worth It or Not?

A Wi-Fi thermostat is a relatively cheap upgrade and, “even without the savings, they would be worth it for the convenience alone,” Newsome says.

Moody notes that an extended service agreement is worthwhile, because buying a plan ensures you’ll get the annual maintenance your system needs to extend its life and can get you priority booking when you make a service call.