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HVAC Financing Best Practices: Get the Most For Your Money

A new air conditioner or furnace is a large investment. How do you make sure you’re getting the most out of your purchase? Let us show you what to expect and consider as you choose a new system.

HVAC Financing Best Practices: Get the Most For Your Money

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Roger Bakies


June 26th, 2020

If you’re reading this, you probably need a new air conditioner, heat pump, and/or furnace in the near future. You probably also know that this represents a significant financial investment. HVAC systems can cost thousands of dollars, and ideally will last you for 15-20 years. Even if you plan to sell your home before that period, the comfort of your home for years to come is dependent on this decision.

Knowing all of that, how do you make sure you’re getting the most out of your money?

We’re here to help with that. Not only have we installed and serviced thousands of HVAC systems, but we’re keenly aware of how difficult a new purchase can seem when you don’t know all of your options.

We’re going to cover several topics in this article. Some may not be relevant to you. Some might be exactly what you’re looking for. For every homeowner, though, there will be something that can ease their mind about their upcoming purchase. The topics we’ll cover include:

  • The range of incentive programs available, and how to make sure you’re getting each that you qualify for
  • What we mean when we talk about price matching, and why the cost you receive on an estimate isn’t necessarily the true cost of a system
  • The benefits of full systems vs. half systems, and some considerations to help you decide which investment is going to be the best long-term solution
  • Whether or not there’s a “best” time to buy
  • Community programs that we participate in, and that may benefit you or those you know
  • Some thoughts on financing and payment, with links to further resources

Some or all of these can help, but before we begin, it’s important to note that no amount of savings can replace a thorough, careful installation and ongoing support from a licensed HVAC partner. This is where the true value lies. But as long as you’re choosing a qualified contractor, there’s no reason not to look for extra savings as well.

It’s time to make your dollars start working for you. Let’s dive in.

Financing your HVAC system

HVAC Tax Credits and Rebates

While the full cost of your system is going to be the most important cost consideration, there are incentives for certain equipment types that can reduce the final cost.

Usually, these incentives are tied to the efficiency of a system. In some cases, though, nearly any modern system is going to meet the efficiency requirements.

The federal government has, at times, offered tax credits for qualifying energy-efficient equipment. Over the years, the amount of this credit has dropped. The most recent was for $300. Still, $300 can be a lot to many homeowners. Even if the program doesn’t run year-round, they’ll often renew the program at certain points of the year. The other nice thing about this is that the credit has historically been applied retroactively to those purchased throughout the year, so you don’t have to try to time your purchase to coincide with a specific offer.

There’s no guarantee of this depending on timing and equipment. But it’s always worth asking your HVAC contractor if any are available.

The other area we see such incentives is from utility companies. Here in Columbus, OH, for example, Columbia Gas and AEP Ohio both offer rebates for qualifying air conditioners, furnaces, and/or heat pumps. While the offers vary, many utility companies around the country have similar incentives.

Again, these offers shift frequently, but a prepared HVAC contractor will be able to tell you what’s available, and from which companies.

That also leads to a question we often hear: Why would a utility company incentivize a purchase that results in lower utility bills?

The answer lies in a utility company’s infrastructure. If enough customers reduce their energy footprint, they can use the same infrastructure to provide power to more homes. Investing in this infrastructure is very costly, so it’s often easier for them to increase the efficiency of existing customers when they’re looking to expand their service area.

This results in a benefit to you, the existing customer. There’s never a reason to ignore this avenue for some extra savings.

Applying a Tax Credit or Rebate

Have you ever struggled with a mail-in rebate and ended up not getting the full benefit? We understand this frustration.

While tax credits must be handled by the homeowner when they file taxes, at Fire & Ice, if you qualify for a utility rebate, we’ll remove the cost from your estimate upfront and process the rebate directly. This lightens your responsibility, and ensures that you’ll get the full benefit of the discount.

This is not something many companies do for you. If you have a contractor in your home for an estimate, don’t just ask about rebates. Ask them how they’ll assist in processing the rebate.

Financing is subject to credit approval.

Other HVAC Incentives

Fire & Ice includes an incentive to pay in cash that can be attractive for some customers. The exact percentage varies depending on your equipment, but for a system that will cost thousands of dollars, even small percentages can equal large dollar amounts.

This should be weighed against other financing options, which we’ll discuss briefly later on.

Lastly, we offer a veteran discount, which is again subtracted from the estimate. To qualify, a homeowner will have to produce valid military identification.

Price Matching: Cost vs. Value

You’ve probably heard about price matching in HVAC, but it’s not quite as straightforward as it sounds. The chief issue is that the equipment is far from the only element in consideration during pricing, but it’s sometimes the only item a homeowner is thinking about.

As a result, something that seems like an “apples to apples” comparison actually isn’t.

So let’s clarify what we mean when comparing: The value of a system is the cost of the equipment, labor for the installation, and the steps taken in the installation process to ensure optimal performance.

Any comparison that doesn’t include that final step is removing the most important of the three items listed there. The difference between, say, a 14 SEER air conditioner and a 16 SEER air conditioner is nothing compared to the difference between a good installation and a rushed one.

Now take that information and apply it to an estimate. If an independent contractor is paid piece-rate, they get paid based on the volume of jobs they do. It’s in their financial interest to move quickly through an installation.

By contrast, a W2’d, full-time employee will be able to spend the right amount of time to ensure every step is handled properly. They’re also more likely to pull the required regulatory permits, install your equipment to manufacturer code, and properly test and commission the equipment to ensure it’s running optimally.

Price matching can be great. It can also be a trap. Make sure you’re comparing apples to apples with a contractor’s full process if you are considering a price matched estimate.

RELATED: Top 7 Things to Look for When Choosing an HVAC Company

Savings of a Full System vs. Half System

Let’s say you’re looking to replace your air conditioner, and a sales representative brings up the option of replacing your furnace as well. Are they trying to upsell you? Not necessarily.

There are several benefits to pairing a system together so that you’re replacing both heating and cooling units at the same time. These include the following:

  1. Increased efficiency as a result of having complimentary, high-efficiency systems. This means more comfort and reduced energy bills.
  2. Synchronize the warranty on your equipment. This is often most apparent when you have part of a system under warranty, but the other half keeps causing problems to the entire system.
  3. Since many systems need to be “matched” (the technology needs to be compatible), you may be limiting your options if you are only replacing one half since it will need to be compatible with existing equipment.
  4. You’ll save on installation time and cost by doing both at once. This can often be significantly cheaper than replacing them separately.

This isn’t always the case, though. If your A/C unit is 20 years old but your furnace is only two years old, it makes no sense to replace both.

This is where your particular circumstances, budget, and comfort goals will come into play, and where a good HVAC partner can provide any and all options available to you.

Is There a “Best” Time to Buy?

There can be a benefit to timing your purchase, but not always in the way you might think.

It’s a myth that, for example, air conditioners will be cheaper in the wintertime, or furnaces in the summer. Prices can vary some throughout the year based on incentives, but a good HVAC contractor will try to get you the best deal at any time of the year.

Where timing can be advantageous is in the speed with which you can get a new system repaired or installed. The first hot and cold weeks of the year are the busiest for HVAC companies, by a lot. By planning for an off-season installation, you can often have a system installed in a day or two as opposed to waiting a week or two for technician availability.

Community Programs

While more traditional methods of payment and financing are generally easiest for homeowners, some programs can often help the less fortunate with HVAC repairs or payments.

In the past, the Mid-Ohio Regional Planning Commission has had programs that help homeowners to fund their HVAC necessities. This is particularly true of heating, which can be an essential need for homes in the winter.

Fire & Ice also participates in “Heat the Town,” an initiative from the Air Conditioning Contractors of Central Ohio (ACCCO). The program sees contractors donating their time to perform safety checks that check carbon monoxide levels, as well as other inspections related to the safety of the system, at no charge. The beneficiaries are usually economically challenged households that need a safe, operational furnace.

According to ACCCO’s website, since 2004, close to 2,250 recipients in Columbus have received the services offered through this program.

Financing plans, subject to credit approval, also exist for customers with all credit scores, which can often be the difference between a dangerously cold winter and a comfortable one.

Financing and Payment

Financing your investment is a broad topic that usually results in a conversation with a homeowner and walking through numerous options.

RELATED: HVAC Financing: A Complete Buyer’s Guide

In brief, though, any good contractor will have financing options available for consideration. At Fire & Ice, we have several types of financing options which include 12 and 72 months! The specific terms will depend on the equipment you install.

We’ve also worked with homeowners’ financial institutions, and have had success with banks and credit unions. As mentioned earlier, second-look plans are also available for customers who may need them.

Looking for next steps? We’ve got a couple for you depending on where you’re at in your decision.

  1. To learn more and apply for financing through Fire & Ice (Central Ohio only)
  2. Schedule Your Estimate to get an exact quote and see all your pricing options. If you're interested in comparing estimates, we encourage you to match us up against anyone in the area. Here's a list of some of the most well-regarded HVAC contractors in Columbus, OH.

We hope that Step 3 is enjoying your new air conditioner, heat pump, or furnace for years to come. Get started now and a new, sleek HVAC system can be in your home before you know it!

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