Time for a new AC Unit – Buying an Air Conditioner

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When we bought our townhouse as a short sale eight months ago we knew we would have to buy a new AC unit. We live three blocks from the Gulf of Mexico which means salt water air and corrosion for AC units. It didn’t help that the unit was the original built with the house close to 30 years ago! It is in pretty rough shape, but the only reason it still works is because it does not have a heat pump so the outside unit only runs in the summer. Our state has passed a lot of new regulations lately that would make it so if our unit dies it could take a week or two to get all the permits needed to get a new unit and I do not like a house that has no air conditioning in the south!

Six months ago we got a quote from Home Depot and they said it would cost about $5,000 to replace the outside unit and air handler inside but also told us they would be the most expensive due to their warranties and quick service. I asked a lot of questions so I made sure I understood all of the decision we had to make.

For our size house we need a two ton unit. The tonnage of a unit is determined by the how much the unit cools. Basically each ton of refrigeration of an AC unit is how much one short ton (2,000 lbs) of ice would cool the surrounding area by melting in a 24 hour period.  The other rating for air conditioners is the SEER rating which stands for Seasonal Energy Efficiency Rating. The higher the SEERs the more efficient the unit is. Law in my state requires a minimum of a 13 SEER unit but you can go as high as a 20 SEER. The other upgrade we would need would be a dip in a solution that makes the unit corrosion resistant due to the salt water sea breeze we get. I thanked the Home Depot representative for coming out and explaining everything and told him we would be in touch when we had made a decision.

At that point we knew we had to start saving. We wanted to make sure we had enough for our unit in case it didn’t start back up again in the spring. We put all of our available money into a targeted savings account and after a few months we had enough for a new AC unit. Now that we had the money we decided we needed to get some more quotes to get the best deal possible.

On Saturday we received our second quote and learned of another decision we have to make. He said that due to the restrictions of our space we could only fit a 13 SEER unit in but that for a townhouse our size a more energy efficient unit would take years to pay off and overall the cost savings probably wouldn’t save us enough to justify the extra up front cost. They gave us two quotes, one for a 10 year parts and labor warranty and another for a 10 year parts and 1 year labor warranty. The first was quoted at $4,400 while the second was quoted at was for $3,682.

I don’t know which way we should go on this so any and all opinions or experiences would be welcomed. We plan on staying in this house for at least five to ten years and after that we plan on renting it out so I would still be responsible for the AC unit. I also am planning on getting at least one or two more quotes to make sure I am getting the best deal.

Finally I’d like to give some tips I have learned that could help you get the best deal possible when shopping for an AC unit.

Get multiple quotes – The company who did the second quote said if I found a better deal elsewhere he would probably be able to match it. This told me that there has to be another company with lower prices and as long as I find them I will get a better deal.

Consider paying cash if possible – The representative told me he could probably get me $100-200 off if I could pay in cash.

Get the representative extra business – My parents are also in the market for a new AC unit. He said if I can get him in the door for an estimate I would get a one year maintenance service contract worth $168. If they buy from him I will get another year for a total of a two year maintenance service contract worth $336.

After I have gotten more quotes and make a decision I’ll post an update!

Do you have any tips for shopping for a new AC unit? If so let me know in the comments below and I can try them out when I get my next quote!

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About Lance Cothern

Lance Cothern, a Certified Public Accountant (CPA) licensed in the Commonwealth of Virginia, is the founder of Money Manifesto. You can read more about him here or connect with him on Facebook, Twitter, Google+ or Pinterest.

Comments

  1. Get at least 4 estimates. Never go with the person that gives the highest or lowest estimate. The highest estimate is gouging, the lowest estimate is probably cutting corners. Go with one of the two middle estimates and try to talk them down. This is what a contractor told me and is a rule of thumb I use when purchasing anything involving labor.

    • Sorry your comment got caught in spam! I was considering whether or not to get a 4th estimate and I just may do that next week! Thanks for the advice.

  2. 10 years worth of labor warranty for $800 seems pretty good to me. I’m not sure what I’d do here but it would depend on my budget and how things are looking. If you’re going to stay in the house awhile, I’d certainly consider buying a more reliable unit and spending a higher cost up-front.

  3. The units themselves are pretty reliable. The hard part for me was figuring out if they’d break enough to cover $800 of labor. I did get another quote this week and am getting just one more before I make my final decision.

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