Parts insurance or protection plans are offered by some companies.
How this works is that you pay a monthly non refundable fee on an annual basis and in return the service provider will replace any part of your furnace or a/c that may fail within that period for free. Usually major parts such as the furnace’s heat exchangers or the a/c’s compressor are not covered.
We don’t offer such plans and we don’t believe that they are beneficial to the consumer. The reason is that if you pay the price for the average annual protection plan for let’s say 10 years the money you would have paid is enough to buy a new furnace installed !! And what are the chances that all your furnace parts will fail within that 10 year period?
Even if they do it’s unlikely that you’ll be saving any money. But let’s give an example here:
Average replacement cost of the five major components of a high efficiency furnace
SINGLE STAGE 92.1% ———————————————- TWO STAGE VARIABLE DC OR ECM 95% PLUS
blower motor psc-$350-400 ————————————— dc variable speed blower motor-$850-1100
computer or ignition module-$350-550 ————————–$350–550
gas valve -$350-400 ———————————————– $350-550
ventor motor-$ 300-550 ——————————————-$350-900
ignitor-$150 ———————————————————-$150
total=$1,500-2,050 ————————————————- $2,050-3,250
(Note here from these parts prices that an extra 3-4% in efficiency between furnaces can cost a lot more in parts later. Interesting.)
These prices are our own based on our previous experience and they are prices installed.
The average protection plan costs $20 a month for a furnace or $240 a year plus tax=271.20 x 10 years=$2,712.00!! Or the price for a new furnace installed with 10 years parts warranty and two years labour warranty.(our price)
Some people have the impression that if they have a protection plan they will get priority service if needed. If you were in the business which customer you’d get first to? the one that doesn’t have to pay you, but has to wait for you until you get there and won’t call anybody else because he’ll have to pay them ,or a new customer that will pay you good money to get there plus money for you to fix it?
Another point I need I have to stress here-and an important one- is the fact that those service providers that offer parts insurance also pay a healthy commission to their technicians for every furnace they can sell. Starting to see what’s going on here? Every time that technician will come to your house to fix something his first efforts will always go towards either trying to sell you a new furnace especially if your existing one is up there in age or if they can’t convince you they usually will condemn it. The latter happens way too often. And sadly with seniors as victims most of the time
That way the company doesn’t have to spend money on your old furnace or the technician to repair it, they sell you a new one at their always inflated prices (which can be shocking at times and at the discretion of the visiting salesman who is always lurking nearby) and they tie you up with another ‘’protection plan” and the cycle goes on and on….or even worse quite often they will offer you a payment plan that extends up to 15 years with 20% + in interest and by the time you pay it off not only it will have cost you three times the furnace price but it will almost be time to replace that furnace again.
From our experience a furnace in its lifetime will need approximately $600 to $1,200 in repairs and we’re talking for high efficiency furnaces here. An ultra high would be somewhat more than that but not more than $1,000 to $1,800.these are worst case scenarios. If you have a furnace you know by now how often it needs a repair or a part. Not too often. Well that depends on who comes there to see it☺.
If you spread that out to 20 or so years which is the average lifetime of a furnace it’s about $30 to $90 a year, and by no means is it financially justifiable to pay 3-6 times that for a ‘’protection plan”.
Let’s not forget also that the last 3-4 years the majority of furnace and A/C manufacturers offer free of charge to the consumer ten years parts warranty. That includes all parts and usually heat exchangers have 25 years to lifetime warranty.
We – as a company- offer two years unconditional labour warranty free with every installation.
I am sure that you all have either heard horror stories of customer abuse by ‘’big” companies or you may have fallen victim to their insatiable corporate greed. It’s simple economics really. Some companies spend millions of dollars annually for advertising, executive salaries, buildings, trucks, office staff and other overhead expenses. That has to be reflected in their prices.
Like a friend of mine once said: ”big companies have big invoices.” And believe me when I tell you this: we all pay pretty much the same money for furnaces and A/C s. The difference in our selling price though can be huge just because of the overhead these companies have, or more importantly on the profit they want to make from every sale.
So.. take care of your furnace (see our maintenance tips section)
Avoid parts protection plans, maintenance contracts, energy price protection plans(another scam!) and equal payments plans for gas and electricity (you’ll always pay more at the end) Don’t ever be intimidated by people coming to your door-or calling you- trying to sell you any of the above scams. Close your door to them and save your money!!
You don’t have to do anything you don’t want to do and you have the right to refuse anything and anybody. By signing a contract or agreeing verbally to any of these scams you lose all your rights (and your money of course.) Also I see and hear a lot lately about really pushy salespeople going around knocking on people’s doors trying to tell them that they have to replace their hot water tanks.
I hear that these people won’t take no for an answer and they can be really intimidating at times. That is regrettable and shameful. Is a company that has to resort to such tactics a company you want to deal with? I think not! Close your door and save your sanity.(and your money of course.)
Don’t forget to check out our sections on furnace and a/c maintenance, filters, humidifiers , duct cleaning and other very useful tips.