HVAC Service Contracts: A Waste of Money?

Consider the benefits and drawbacks of an extended HVAC maintenance agreement before buying.If you're installing a new HVAC system or repairing an older one, many companies offer an extended HVAC service contract or maintenance agreement. These contracts can be a blessing, but they can also be a waste of money. By understanding more about what these contracts are and what they offer, you can make an informed and wise choice.

What are heating and air conditioning service contracts?

Service contracts are agreements between you and an HVAC service provider wherein you pay a set fee to guarantee the company's ongoing services for your HVAC system.

With the most basic contracts, the service includes a checkup and tune-up emphasizing your heating system at the start of the winter and air conditioning system before summer. You can also find contracts that include parts and service for problems found during those checkups, and some will even include emergency service.

They sometimes also include priority treatment, which can save you time and discomfort when your heater fails in the freezing cold or your air conditioner blows out in the heat of summer The more services the contract includes, the more you will pay.

Benefits of regular HVAC maintenance

If you purchase a service contract, you will be more likely to get an annual tune-up for your HVAC system. This will improve your energy efficiency, as the technician will be able to change dirty filters and spot other problems that are impacting your efficiency, helping your system to work more affordably overall.

Hiring a qualified technician to inspect your system a few times per year means you can identify issues while they are still small and easy to fix, rather than waiting until they damage your system or become expensive.

Cost for HVAC service agreements may cost more than repair

The main reason homeowners do not purchase an HVAC service contract is the cost. They can cost between $150 and $500 per year, depending on the amount of services offered. If the system is new and still under a manufacturer's warranty, the cost may not be worthwhile. Any major repairs should be covered under the manufacturer's warranty. However, some manufacturers require routine maintenance as a term of the warranty.

The contract may cost more than the service or repair it offers. Keep in mind that you will be paying the fee every year regardless of whether you have a repair done. If you go five years without needing a major repair, but are paying $250 a year for the contract, you may be paying far more than it's worth.

Research HVAC service contracts before you buy

Before signing up for a service contract, determine the cost of routine maintenance for your unit and make sure the cost of the service contract is comparable. You may find that it is cheaper to simply pay for the routine service out of pocket.

Find out whether emergency repairs are included. If they are and the price is reasonable, you may want to purchase. If not, you may want to look elsewhere for the service. Always read the fine print before signing, making sure you know what actions on your part could nullify the contract.

Finally, make sure that you choose a company that is honest, trustworthy and reliable. Remember, the service contract is only as good as the service provider backing it. Browse Angie's List to find highly reputable HVAC service providers in your area. With one of these, you can consider an HVAC service contract with confidence.

Have you had any experiences with an HVAC service contract? Let us know in the comments section below.

Editor's note: This is an updated version of an article originally posted on April 12, 2012.

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Source: http://docphy.com/business-industry/business/hvac-service-contracts-waste-money.html