Dale Investigates: HVAC System Scheme

Recently, some major heating and cooling dealers in the metro Atlanta area have been advertising some wild offers for HVAC systems and they definitely got my attention. Something didn’t seem right…so I decided to investigate.

The Hook:

Low monthly payments don’t start for 90 days
No up-front costs
Lifetime maintenance – including filter changes and lifetime repairs

Here’s what my investigation revealed:

It’s a lease deal…you’re not buying anything! Just as leasing a car is different from buying one, there are a host of differences in choosing to lease your new heating and cooling system rather than buying it. Those differences can lock you in to only one provider with perpetual lease payments and high residual buyouts. You need to carefully read the contract before you sign anything.

The cost of leasing – over time – is far more expensive than buying a new system. Make sure you know the true cost of ownership. My research showed this leasing option has been offered in Canada and has migrated south to Atlanta. Here’s what the investigation done by the Toronto Sun newspaper revealed:

“The furnace [lease] may only be $100 a month, but consider what the cost will be over the entire rental period. A furnace purchase priced in the $4,000 to $5,000 range may end up costing you upwards of $18,000…” (article published November 23, 2015).

The same heating and cooling system, if purchased, would be paid off in just five years or so and, for those with approved credit, possibly interest free. That’s about one third as much as if you leased!

Buyers, but not those who lease, are covered by 10 yr. parts and labor warranty in most cases. When you pay off your new system, you’re still covered by the manufacturer’s warranty years later.

After a typical 96-month lease agreement, you pay a residual buyout – sometimes several thousand dollars. If you don’t buy out, your payments continue. Want to upgrade your system? The cycle starts all over again. In other words, your lease payments could continue throughout your entire lifetime because you don’t own your equipment!

What you need to know before signing anything:

• Call your insurance company and make sure your homeowners policy covers leased residential heating and cooling equipment.
• You agree to be responsible for damage to the unit. So, if you damage it in any way, you’re responsible for repairing it. Your leasing company decides the cost of repairs.
• If you skip your annual maintenance and your system breaks down, you can be charged needed repairs. The leasing company sets the cost any repairs you are responsible for.
• Selling your home could become more difficult because of leasing your heating and cooling equipment. The leasing company gets to do a background check on your potential buyer. And, since you don’t own the equipment, it won’t count in the overall value of your home.

Don’t like the service person who comes to your home? Slow response to your repair calls? You can’t switch service providers – you must use the company who leased you the system, or the company they choose, to service and maintain your equipment. In many cases, you also agree to allow them to access your property whenever they choose.

I also encourage you to do your own research. If you want to learn more about what real customers have to say about this approach, simply Google the words “Canadian HVAC rental model complaints”.

Remember, the heating and cooling companies I recommend on TrustDALE.com have my exclusive “Make it Right Guarantee”. I’ve researched and reviewed each company and they meet my strict standards to be TrustDALE Certified Partners.

To view a listing of all TrustDALE Certified HVAC companies in your area, click here.