HVAC Service Agreements, Before You Buy...

Before you sign any HVAC service agreements, there are some basics you need to consider. All hvac systems require some routine maintenance. If you are willing and able to do it yourself, you can save a lot of money. If you cannot remember to do the scheduled maintenance or cannot physically do the work, a plan may be right for you.

There are many names for these agreements such as hvac maintenance contracts, service agreements, and comfort plans.

But, they are all basically the same thing. Most of them omit the word "contract" but that is what they are.

 A win-win solution?

These contracts have two main purposes. First, for the hvac dealer, they provide income during the slow times. In the hvac service industry, business slows down in the more mild months such as Fall and Spring. During these times, the dealer still has the same business expenses but usually less income. Therefore, by offering service contracts, they can increase their income during the slow periods.

The other purpose is to ensure that preventive maintenance is performed on the equipment. A clean hvac unit has fewer repair calls than one that is not maintained. Manufacturers require a minimum amount of service to their systems. This is to ensure that the parts last as long as possible which saves them money. Also, a clean hvac unit operates more efficiently and saves you money on your utility bills.

 Types of plans...

HVAC service agreements usually start with a basic plan. This usually includes an ac unit checkup and a furnace checkup. These usually only cover the labor costs associated with performing the routine service. Any worn parts or consumables (such as the air filter) are usually extra.

The next level of coverage usually includes the checkups, no charge for repair parts during the checks, and priority service. During a heatwave or major cold snap, hvac service companies get very busy and most cannot keep up with the volume of repair calls. The "priority service" is sorta like a guarantee that they will get to you on the same day that you call for service.

Normally, the highest level of contract includes the checkups, no charge emergency service, and priority service. This can be useful for those that want to budget and know that they will not have any surprise expenses.

As the plan level goes up the price goes up. The basic plans normally cost about $200 and the highest level can be $300 to $500 PER YEAR.

Is an HVAC service agreement right for you?

So how do you decide? First, you have to decide how much of the routine maintenance you are willing to perform. If you are even a basic do-it-yourselfer, you can do the recommended maintenance (you can get our training videos to assist you).

Next, you need to look at your expected repair costs. Is the unit still covered by factory warranty? If it is, then there is no need to purchase a contract that covers repair parts. Those costs would already be covered.

Is the unit old and no longer under warranty? Have you had a lot of repair bills in the past? If you answer yes to both of those questions, then ask yourself how much you can spend. Consider this, if your unit is that old, it might make more sense to replace it. In this case, you would probably pay $300-$500 per year for the contract. In just a few years, you will have spent enough to buy a new unit.

By examining these things, you will be informed and make better decisions about whether hvac service agreements are right for you and your home. This will keep some of your hard earned money in your pocket. And your equipment will still receive adequate care.

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