WWYD: Central Air Conditioning

[bicker]

It is contract-renewal time for our service contract for our central air conditioning/central heat system. Our system is now 12 years old, so the protection we've had for 12 years is now going to start costing significantly more money. Would folks who know something about home mechanical systems please comment on what you'd recommend, between the following choices? (Don't worry about whether the actual numbers are good or not... please just help me decide among these specific options, as they're outlined, as if there were no other options. Thanks!)

1 - Preemptively replace the outdoor unit (compressor?) for about $3000, plus about $400 for coverage and maintenance for the first year.

2 - Continue with full repair and compressor replacement coverage, for another year, for $610.

3 - Drop down to coverage that won't cover the compressor if it fails (but will still cover other repairs, and even will cover the cost of installing the new compressor if it does fail), for $485.

Thanks for your assistance!

 

[shortbun]

My a/c is 20 years old and running like a top. What makes you think they need replacing?
On the other hand, you could get energy star tax credit for the new a/c and it would cost you less.

 

[bicker]

The replacement of just the compressor doesn't qualify for the tax credit.

Beyond that, I don't think anything needs replacing... those are the three options offered to me. I just typed them in, without indicating which of the three I thought was good or bad, because I really don't know. The only thing I know is that one of these three is the right answer.

 

[sbell111]

I'd cancel the contract and toss the money in the bank. For the most part, AC service contracts are a scam. Most everything they do during a normal visit could be done easily by the homeowner in about five minutes. I certainly would not replace an AC unit that is running properly.

 

[bicker]

Thanks but that's not one of the options.

 

[Frantasmic]

I just replaced my condensor unit, coils, and heating system to the tune of about $9K.

I probably could have gotten away with not doing it for another year or so, but my AC guy, whom I trust, said it could go at any minute. Living in Texas, I didn't want to take the change of the system going out in August and it taking 3 days to install a new one.

Option 2, to me, looks to be the most cost effective. However, that is based on the premise, again from my AC guy, that AC systems only last about 12-15 years anyway. If you replace the unit pre-emptively, it's out of your pocket. Option 3 is also more or less out of your pocket. So, I'd look at option 2 as a $120 or so insurance policy (the difference between option 2 and 3).

You have already "paid" for half of a new unit, in theory, with that $120 you've insured your unit with each year (12x120 = 1440). You have bet for 12 years that the unit would fail, no need to believe the unit won't fail eventually. You still have 10 more years of the $120 delta before you "break even."

 

[bicker]

Option 2, to me, looks to be the most cost effective. However, that is based on the premise, again from my AC guy, that AC systems only last about 12-15 years anyway. If you replace the unit pre-emptively, it's out of your pocket. Option 3 is also more or less out of your pocket. So, I'd look at option 2 as a $120 or so insurance policy (the difference between option 2 and 3).

You have already "paid" for half of a new unit, in theory, with that $120 you've insured your unit with each year (12x120 = 1440). You have bet for 12 years that the unit would fail, no need to believe the unit won't fail eventually. You still have 10 more years of the $120 delta before you "break even."

Thanks for the input.

One of the things a lot of people omit from their consideration is how, in some areas, the demand for HVAC repair is so high that, with these service contracts, you're paying not only for insurance coverage and semi-annual maintenance, but also for priority. That is a major consideration here. When we were living in our last home, our central air went out and we waited two weeks for repair. Now, we wait two hours. How much is priority worth? Each person needs to make their own decision, based on how much they're willing to wait, and/or how low they're willing to dig to the bottom of the barrel to try to get repair earlier.

 

[Nancyg56]

I would not replace the unit and then pay an additional $400 unless the unit was not running properly. If it is running fine now then option 1 would not be anoption.

I would research the actual cost of the compressor and then determine if the additional $125 is worth continuing full coverage. I think that since continuing coverage at $485 would cover the labor but not the actual unit that is what I would look at. If the unit is the lion's share of the cost i would go with option 2.

 

[golfgal]

Where are you getting the service plan? Our gas company offers service plans for appliances/AC/furnaces (covers them all) for less money then you are paying just for your AC/Furnace. We pay $15/month and they repair or replace the dishwasher, stove, refrigerator, washer, dryer, water heater, AC, and furnace. I vote for calling around and seeing if you can get a better service plan.

 

[Pumbaa_]

so i can't follow the rules

Wehave had our central air unit for 15+ years and never had a service contract on it. Runs like a top! Can't see the benefit of a service contract on it

we can bicker about if you like though

 

[bicker]

The contract includes service and repairs on the whole system, including the dampers (for which we've had a lot of repairs needed over the years), the whole house humidifier (ditto) and the hot water heater, and included priority service, which is what accounts for the difference between having to wait two hours for a repairman instead of two weeks.

I have no doubt that the prices are very good for the service provided. If I did have any doubt about that, then I would have asked about that. I've done my research on the company, and have worked with them, and gotten incredibly good service from them, for twelve years.

I'm only trying to figure out whether there is a real advantage of one of the three options over the other two. It could just be that all three choices are equally good. That would be good info, too.

 

[sbell111]

...I'm only trying to figure out whether there is a real advantage of one of the three options over the other two. It could just be that all three choices are equally good. That would be good info, too.

It might serve you to seriously consider whether the three options are equally as bad. Of course, this suggestion also apparently violates your rules.

 

[Anjelica]

Where are you getting the service plan? Our gas company offers service plans for appliances/AC/furnaces (covers them all) for less money then you are paying just for your AC/Furnace. We pay $15/month and they repair or replace the dishwasher, stove, refrigerator, washer, dryer, water heater, AC, and furnace. I vote for calling around and seeing if you can get a better service plan.

Is that a whole house insurance coverage, etc. (i.e. outside of the "regular" home owners insurance)? I no nothing about those but have been interested in getting one for our house. Our house and appliances will be 9 years old this September so I expect to see things breaking, etc. over the course of the next 2-10 years.

 

[Nancyg56]

The contract includes service and repairs on the whole system, including the dampers (for which we've had a lot of repairs needed over the years), the whole house humidifier (ditto) and the hot water heater, and included priority service, which is what accounts for the difference between having to wait two hours for a repairman instead of two weeks.


I'm only trying to figure out whether there is a real advantage of one of the three options over the other two. It could just be that all three choices are equally good. That would be good info, too.

I carry service on several of my major appliances and have been told that I am wasting my money. I have not IMO, I have gotten very good service on those appliances and the repairs that I have had on those appliances have paid for the service contract several times over.

My question is why would you replace the unit if it is still running well and can continue to be covered by the contract? You have determined that you need a service contract even on a new unit in order to ensure timely repair so you are really only spending about $200 to get another year out of the unit. If you replace the unit for $3000 and figure that it will last another 12 years it is going to cost you $250 per year.

 

[golfgal]

Is that a whole house insurance coverage, etc. (i.e. outside of the "regular" home owners insurance)? I no nothing about those but have been interested in getting one for our house. Our house and appliances will be 9 years old this September so I expect to see things breaking, etc. over the course of the next 2-10 years.

It is through the gas company and they call it a Platinum Service Plan or something like that. We pay it on our gas bill each month. They also include a yearly check up for the AC and the furnace in the plan.

 

[Pumbaa_]

ok, based on that, i would upgrade the unit now as a planned replacement rahter than wait and see what happens.

I would hate to be without our central air in august, that is for sure!

 

[stevenpensacola]

I'd cancel the contract and toss the money in the bank.

I agree. If it ain't broke, don't fix it. Just run it until it fails.

Change/clean your filter when needed. Clean the outside coils if dirty.

 

[bicker]

It might serve you to seriously consider whether the three options are equally as bad. Of course, this suggestion also apparently violates your rules.

Yes, it does. To be clear, we've come to a decision as a married couple about the fact that doing without the service contract is the worst decision. This is a reflection of our values and our specific circumstance. So that leaves the question we have: Which of the three choices is the best choice of the three?

 

[bicker]

I carry service on several of my major appliances and have been told that I am wasting my money. I have not IMO, I have gotten very good service on those appliances and the repairs that I have had on those appliances have paid for the service contract several times over.

It does boggle my mind how much vicious intolerance there is for a perspective such as yours, from some quarters. To be clear, I'm not talking about the DIS boards. I posted this question a few places this morning, and there is at least one forum where there are some really rude people who are so self-centered that they cannot accept that other people could possibly have different values from them -- so much so that they essentially flood the thread with rude messages to preclude the possibility of having a constructive discussion about the alternative choices outlined -- simply because they want their values, i.e., "insurance is bad", to be the only one perspective reflected, I suppose.

To be clear: I do believe that insurance is "wasting money" -- if you're a machine. I say it that way because the value that insurance provides is peace of mind, something that only applies to humans.

My question is why would you replace the unit if it is still running well and can continue to be covered by the contract?

Yeah I really don't like that option for that reason. I think it comes down to two considerations: (1) How likely is it for the condenser to die this year (given that the manufacturer said it would last 12-15 years? and (2) How much extra will it cost to replace the condenser if it goes unexpectedly, versus preemptively? I believe the answer to #2 is 10% ($330). I need input on #1. I have no idea about how these devices are designed and how closely their actual lifespan tends to be vis a vis their projected lifespan.

You have determined that you need a service contract even on a new unit in order to ensure timely repair so you are really only spending about $200 to get another year out of the unit.

Don't get thrown by that: The service contract for that first year should be really cheap, essentially the cost of routine maintenance on the system (cleaning out the humidifier, replacing damper motors if they break again, etc.) The unit is under warranty from the time it is installed until the warranty period is over, so that cost doesn't hit the service contract until after the warranty period is over.

If you replace the unit for $3000 and figure that it will last another 12 years it is going to cost you $250 per year.

That really gets to one of the important pieces of info I need: When is this puppy going to fail?

 

[pjm-guy]

We moved into our house in 2001 and when we had the home inspection done, we were told the A/C unit could go at any time (It was I think 17 years old at that time). We kept the system installed and insured it with the local electric utility for $14/month ($168/year). Some years we have had multiple service calls for routine fixes, other years we had no calls at all. Last summer, we had some issues with the condensing unit and the inside evaporator. The evaporator coil was blocked so all it took was cleaning it off to get going again. After that, the condenser would trip the breaker due to high-pressure conditions. Apparently when the evaporator was blocked, they added refrigerant which over-charged the system and that’s a big no-no for equipment as old as ours was.

Anyway, fast forward to this year, we had 90F in early April so when I went to run the system, it wouldn’t run. This is when we found out about the over-charging of the refrigerant. It was a case of, if we let it go it might be ok and it may make it all summer. But like you I don’t want to be in a spot where it could die at any moment and leave us with no A/C so we replaced the outdoor condensing unit and indoor air-handler. We have separate heating & cooling equipment so our furnace was not affected.

I was able to get a friend do the install (which I assisted). Total cost for parts was matrials only. If you’re getting quotes, understand that the markup on materials is insane. Of course I paid my friend for doing this so the total cost to me for everything was just under $3,000.

The total time to remove old and install new was about 6.5 hours – he did the mechanical and I did all of the electrical work. I will also be filing for utility and tax rebates which will bring my net cost under $1,000. I did get lucky in this case because the best price I was able to find before mentioning it to my friend was $6,500 before rebates.

So long story made short, if you have someone who can buy the equipment and help you install it and you can get rebates too, go for the replacement now. If not and the equipment is running fine, let it go and pay the service contract. Our local utility that offers the service program guarantees a response within 24 hours. It was not the case this spring, but last year they were out within 6 hours of a call. And that was in the dead of summer when we hit 90F late in August. Good luck!