What will I have to pay? Estimating Air Conditioning and Furnace Repair Costs on your home’s HVAC system.
Air conditioning and Furnace repairs are typically NOT ‘joy buys’. We get that. I’ve rarely walked into a house where a customer is skipping around giddy with joy that a repair technician is coming over. “Yippie, I get to buy furnace parts!!” No you’d probably get carted off somewhere with padded walls. OK, Occasionally, yes because the customer is so desperate for relief.
AC and Heater repairs just don’t have the same luster that buying a new iPad or Car has but often times HVAC work is in the same price range as those items. Nobody likes to see their wallet get hit by ordinary life.
There is also a mystery here when it comes to paying for things like plumbing or air conditioning repairs. It can be unpredictable. You never know what the total cost for repairs will be until after the technician has come to your home and found the source of the problem. Still, we get a fair number of customers who ask, “how much will the repair cost?” before the appointment is even booked. I’m pretty sure they know that we can’t figure this out over the phone. Before we attribute this to Temporary Discomfort Insanity(TDI) we should take a deeper look. The customer that asks “how much” before the repair technician can even look into a complicated system is probably communicating something else. In actuality they may not really be asking, “How much will the repair be?”. Instead they are really asking one of these two related questions.
“It’s not going to be expensive is it?” OR “Can i afford the repair?”
I have tried several different tactics to this question. I’ve even tried brutal honesty to help fully inform customers before the visit. This has at times ended in a lost opportunity. Here are two ways I’ve answered the question in the past.
1) “Ma’m, there is a service fee of $60 to come out. Once we diagnose the system we will give you an exact price before we begin the work.”
2) “Sir, there is a $60 service fee. Typical repairs prices will vary based on the individual item that is broken. Industry average for a repair is around $250 but we won’t know the exact price until we diagnose the system. At which point we will give you the price so that you can review it before we perform the work.”
These are just examples. We stick with option ‘a’ right now for several reasons. Get the customer, don’t snub them with too much detail up front and get them as a customer. If they can’t pay for the repair at least they can probably pay for the diagnostic fee. Additionally we have the opportunity to build a relationship. This is a bit like having bedside manner as a doctor. People desire to be reassured by their doctor but sometimes too much information or giving worst case scenarios can make for poor manners and lost trust.
HVAC INDUSTRY AVERAGE REPAIR PRICES
Still wondering how much your HVAC repair will cost on your house? Still not satisfied with the ambiguity? Here you go.
Repair Charges can typically range from $150 – $900. The more expensive repairs tend to be items like OEM motor replacements. The less expensive items are likely minor electrical parts like capacitors and contactors.
Major HVAC companies shoot for Gross Margins around ~60-75% on service/repairs and 50-60% on equipment. This is typically for residential retail work. New Construction has lower margins due to the lowered demand pressure, scale, and process. These margins may sound like a lot at an initial glance but consider all the expense variables. Vehicle, Insurance, Payroll, accounting system and Marketing expense. To do well in the HVAC industry takes some serious overhead expense. Many HVAC service companies despite having healthy gross margins still only operate at 5-15% net pre-tax margins. So lets not assume that your contractor is pulling a fast one on you. The repair business is not a cheap one for those who have remained in the business for the long run.
My advice home owners on this issue of price is to not let price be your primary motivator when looking for a repair. Often times the lowest priced air conditioning contractor in your town cannot provide the same kind of quality and warranty that another company can. It all depends on what you want in your home. It would be far more important to me to have a quality, trained, honest, HVAC company come to my home even for a slightly higher price point. Food for thought.