Should I Repair or Replace My HVAC Unit? Key Factors to Consider

Unfortunately, heating and air conditioning system breakdowns are a fact of life. It’s the second law of thermodynamics…that everything tends towards breaking down and disorder. 

This then inevitably brings up the question, should I pay to repair my heater or air conditioner, or should I just replace it?

There are a few factors required to answer this question. Things like the age of your system, your average annual repair costs for the system, etc. On one side, it’s just a simple math problem, one I will walk you through in a moment. On the other side it’s about your comfort and peace-of-mind, something that isn’t quite quantifiable. 

Doing the Math

There are three numbers we need to figure out to determine if you should repair or replace your system. 

1. Energy costs
2. Repair costs
3. Replacement cost

Energy Bills

First, how much could you save on energy if you updated your system? We start with how much you spend on heating and cooling costs monthly. According to the national energy department Texan’s heating and cooling costs are about 65% of their energy bill (this varies based on whether you have a gas furnace, heat pump, or electric heater). So take your average monthly energy bill and multiply it by .65

For example, a $300/mo. energy bill would mean you spend $195/mo. for your heating and cooling. 

Next, we need to determine what you would save on your energy costs with a new system. You can find several calculators online that will let you know what your annual savings will be, but for the purposes of this post we will use the example of upgrading from a 10 SEER HVAC to a 14 SEER HVAC. The energy savings annually for this upgrade are 30% (of just your HVAC utility costs) 

That looks like this: $195 x .3 = $58.50

This means that upgrading your system to a newer 14 SEER HVAC system would save you $58.50/mo. on your energy bills. 

Repair Costs

Next, we need to figure out what you can expect to spend on repairs for your system over the next 5 years. To do this we ask you what you spent to repair it last year and the year prior. From there we project out the next five years with a 10% increase each year. We do this because as systems get older they require more frequent, and more costly, repairs. 

If your average annual repairs over the last 2-3 years were about $400 the numbers would look like this:

Annual Estimated Repairs: $400

Year 1 + 10%: $440
Year 2 + 10%: $484
Year 3 + 10%: $532.40
Year 4 + 10%: $585.64
Year 5 + 10%: $644.20

Total Repairs Over Next 5 Years: 2686.24

Then we divide by 60 to get your average monthly repair costs for the next 5 years. 

Divided by 60= (Monthly Repair Costs): $44.75

Adding It Up

Now we add your energy savings to your repairs costs and we can determine what you are paying every month to keep your existing heating and air conditioning system. 

Repairs + Utility Savings: $103.25

This means it is costing you $103.25/mo. to keep your existing system. 

What Would A New System Cost?

Next we determine the cost of a new system. For example, if you wanted to replace your existing HVAC system with a new 14 SEEr system and it costs $7,500. You finance it for 72 months (6 years) at 9.99%, then your monthly payment would be: $131.25

Compare this to the cost of keeping your existing system and we get this:

Cost to keep existing system: $103.25 (energy and repairs)

Cost to upgrade: $131.25 (monthly finance payment)

Monthly Net: -$28

In this example it would cost you an extra $28/mo. to replace your system. Sometimes, depending on energy costs and repair costs, you actually save money by upgrading, but in this example you don’t. 

This doesn’t necessarily mean you should just opt for the repairs though. Now we turn to the unquantifiable factors like comfort, and peace-of-mind.

Comfort

How is your existing system doing when it comes to keeping you comfortable? How well does it run? What are your existing heating and cooling needs? Do you have rooms that won’t heat or cool well? Are you concerned about indoor air quality? 

All of these questions, and more, can point us to issues that may be resolved with an upgrade. Upgrading your system provides an opportunity to resolve many issues that may have slowly crept in with your existing system, Issues you may think are well worth the extra $28/mo. to solve. 

Peace-Of-Mind

Does your system consistently breakdown in the peak of each season, when it’s hottest outside, or coldest outside? Have you come to expect these breakdowns? Are you constantly worried about the next breakdown? Do you have very young children, or elderly parents or grandparents living with you, who are adversely affected when your system breaks down?

Any new system we install comes with a 10-year manufacturers warranty on parts and a 1-year warranty on labor. A new system not only provides an opportunity to fix any issues to your comfort, but can also offer peace-of-mind, knowing that breakdowns are a thing of the past, and that warranties have you covered. 

Putting It All Together

After doing the math regarding your current heating and cooling system, and a potential upgrade, along with asking yourself the questions about comfort and peace-of-mind, you can then decide if it is worth it to upgrade, or just repair your existing HVAC unit. 

If you’d like help with this process, or just have more questions give us a call and we would be happy to serve. 

If you want to better understand your home’s HVAC split system you can watch this video.

If you want to learn what you as a homeowner can do to maintain your system check out our blog post here.

Prestige Air proudly serves Northeast Tarrant County and the Fort Worth, Texas area including Hurst, Euless, Bedford, Colleyville, Grapevine, Southlake, Keller, Watauga, Haltom City, and North Richland Hills.

We look forward to serving you and your household!