This article highlights some of the most prevalent and misleading advertising for replacing your HVAC system.
Financing for HVAC systems is nothing like financing your house or your car. Financing for your house or your car is considered asset-based or secured financing. This means that if you default, the finance company can repossess the asset to redeem at least some value against the financed amount. For the finance company this means the risk is lower so in turn the finance rate is lower. The second reason it’s different is there aren’t any financing arms for the manufacturers the same way there are for autos. GMAC (now Ally) was the finance arm for General Motors. Working together with the factory, they were able to provide very advantageous rates for financing GM automobiles. HVAC finance is done almost exclusively with 3rd parties with no relationship to the manufacturer.
The best way to find out what you are really paying for financing is to tell your local service company that you plan to pay cash for your new HVAC system. They will quote you a cash price that is much lower than what the financed price would be. After that, if you choose to ask about finance options you can compare the financed price with the cash price to see what you are really paying. Of course it’s always recommended to get multiple quotes to make sure the cash price is fair and reasonable as well.
For more in-depth insight into HVAC financing and how it works, check out our Guide to HVAC Replacement Financing.
The concept of the $1,500+ trade-in is nothing but a gimmick. If your HVAC system is actually in need of replacement, there is no value to your old HVAC system except the value of the scrap metal. This isn’t a scam — manufacturers and dealers offer different kinds of incentives in the spring and fall to help bolster sales. You should just be aware that you aren’t really getting any value for your trade-in.
Free Furnace with A/C
The free furnace with A/C is just a variation of an offer that looks enticing but is too good to be true. If someone is charging you a fair price for the A/C they don’t have enough margin to also throw in a furnace. Do your homework and get multiple quotes and you’ll see that you are just overpaying for your A/C not getting a furnace for free.
I don’t think we need to go into too much detail here. Whether it’s timeshares or vehicle leases, these offers can seem appealing but when you have spent enough money that you should own whatever it is outright, you’ve still got years to go with nothing much to show for it.
The cost of HVAC equipment and installation is what it is. You are either going to pay up front or over time. Once you get into the details, your cost is going to exceed $99/month for a real system and quality installation. The allure of a worry-free HVAC system can be compelling but you’re much better off to buy a quality piece of equipment, finance it through a reasonable means, and pay it off as quickly as you can.
When you see companies advertising over $4,000 off the price of a new HVAC system you should be concerned. How much were they planning to rip you off if they weren’t running a special? Having seasonal incentives is one thing, but $4,000 is ridiculous. The most common HVAC systems are between $6,000 and $12,000 in actual fair market value. The companies offering the $4,000 savings are still going to make a profit on the HVAC system you are buying, it’s just misleading to say that the $6,000 system is really a $10,000 system and the $12,000 system is really a $16,000 system. When you are purchasing an HVAC system, look for fair and transparent pricing and a dealer you can trust, not ridiculous specials.