Furnace - Replace or Repair: How to decide

Furnace - Replace or Repair: How to decide

Often times people ask whether they should repair their old furnace or just replace it. To help determine what is best for your home, ask yourself the following questions. First, how long are you going to be living in the home? Second, what will the cost be to repair? Third, how long will the potential life of the equipment be after repairs are made? Finally, how long will it take to pay for itself if I do replace it?

First, you want to have an idea of how long you plan to live in your home. If you are going to be there for less than five years a repair may be a better option. It typically takes more time to see savings on a new furnace.

Second, figure out the cost to repair the furnace. If the repair is more than 50% of the cost of a new low-cost furnace you should consider replacement. Furnaces will lose efficiency as they age and replacing an older damaged furnace will save you money in the long run.

Third, determine how long the expected life of the furnace will be after repairs have been completed. If you are simply putting a "band-aid" on the furnace and it will only last a few years replacement is probably a better option. This is especially true if you plan to be in the home long term.

Finally, figure out how long it will take to pay off the new furnace from savings due to the higher efficiency.

Here is an example: Say you have a furnace from 1985 and it will cost $800 to fix the issue and make it 70% efficient. In this example, your average monthly heating bill is $200. If you update to a 98% variable speed furnace you will save (based on efficiency alone and not considering the reduced run time of the furnace) 28% per month. That is $56 per month equaling $672 per year. If the cost of the furnace is $4500 and you consider the cost you would have had to pay to repair the old one your investment is only $3700. That means your new furnace would pay for itself within the first six years of ownership. With a standard life of approximately 20 to 25 years, you would save a tremendous amount of money.

If you are debating what to do in your home, give us a call at (503) 994-9924. We can help walk you through each of these questions and give you the cost of different replacements.

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