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By Tom Moor
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Posted 8/1/23

When your heating and cooling system acts up or breaks down completely, it's essential to contact a reputable HVAC company to inspect the unit and provide a recommendation about HVAC replacement. Although replacing an HVAC system over repairing it is a significant financial investment, it's often the best route if your system is aging, inefficient or requires frequent repairs.

But how do you know exactly when it's time for HVAC replacement? Keep reading to learn when to replace your system and the average HVAC replacement cost.

When to Replace Your HVAC System

Ultimately, as a homeowner, you have the final say when it’s time to replace your heating and air conditioning system. The following tips can help guide your decision:

Follow the 5,000 Rule

The 5,000 rule is a common formula within the HVAC industry for determining when to repair or replace HVAC systems. It involves multiplying the cost of the repair by the age of the system. If the total amount is over 5,000, then replacement is the better option. A number under 5,000 means a repair may suffice.

Here’s an example of how to use the 5,000 rule:

Cost of repair: $600

Age of unit: 10 years

$600 X 10 = 6,000 (the result is more than 5,000 so replace the system)

The Warranty

If the unit’s warranty is no longer active, consider HVAC replacement. It’s a better investment to put your hard-earned money toward buying a new, efficient system than to continuously repair an aging unit that’s not covered under warranty. Most of the top manufacturers offer 10- or 12-year extended warranties.

Age of the System

If your heating and cooling system is within or over its expected lifespan, consider HVAC replacement and installation. With regular maintenance, central air conditioners, furnaces, and heat pumps can last 15-20 years.

History of Repairs

It’s not uncommon for your HVAC system to need repair every couple of years. However, three or more HVAC repairs within a three-year period signal it’s time for a new unit, as the system is likely on its way out.

You're Not Planning on Moving

If you have no plans to move, replacing the system now will lower energy costs and reduce the frequency of repairs. Although HVAC replacement costs more than a repair, you’ll recoup some of the costs through lower energy bills.

Optimizing Energy Efficiency

Speaking of efficiency, most older HVAC systems are significantly less efficient than today’s models which come with advanced features. Although the average lifespan of an HVAC system is 15-20 years, consider replacing your unit after 10 years if improved efficiency and lower energy costs are a top priority.

Safety Concerns

Safety concerns such as a cracked heat exchanger can result in a dangerous carbon monoxide leak. Replace your system immediately to protect your family and pets from harm.

Comfort Issues

Aging and inefficient units often struggle to keep homes comfortable. If you notice poor indoor air quality, high humidity levels, or uneven heating or cooling, HVAC system replacement can restore comfort to your home.

HVAC Replacement Cost

The average cost to replace both systems at the same time is $5,000 to $12,500, with an average price of about $7,500.

If you elect to buy just one system instead of replacing your entire HVAC unit, expect to pay the following, according to

Gary Hullfish, president of Lawrenceville Fuel, an HVAC company based near Trenton, N.J., said he recently installed a complete 2.5 ton HVAC system, including an air conditioner and furnace, for $7,300 at a nearby condominium.

He said prices for complete HVAC systems average about $9,000. Furnace and air conditioner installation typically costs about $4,000 and $3,500 to $4,000, respectively.

Labor costs are typically charged at an hourly rate of $50 to $100, according to Lisa Shelby, senior editor with

What Affects the Price of a New HVAC System?

When replacing your HVAC system, several factors ultimately determine how much you pay.

“Crucial factors in determining the overall pricing include the size of your home, existing HVAC infrastructure, and the desired energy efficiency of the new system,” Shelby said.


Hullfish said an HVAC system’s efficiency plays a significant role in the overall costs of HVAC unit replacement. Air conditioners are measured by their Seasonal Energy Efficiency Ratio, or SEER. The higher the SEER, the more efficient the system is which will lower energy costs. A minimum SEER rating of 14 is required in Northern states, while a 15 SEER is required in the Southeast and South. If your current system has a SEER of 10 or lower, consider replacing it.

A furnace’s efficiency, meanwhile, is measured by its Annual Fuel Utilization Rating, or AFUE. Mid-efficiency systems have AFUE ratings between 80-83%, while high-efficient heating systems are rated between 90-98.5% AFUE, according to Buying Energy Star-certified HVAC equipment ensures long-term savings which can help recoup the costs of paying more for a higher-efficiency system.

System Type

The type of HVAC system you buy greatly affects the price. Different options include central air conditioners, furnaces, air-source heat pumps, geothermal heat pumps, ductless mini-split heat pumps, and boilers.

System Size

System size refers to an HVAC system’s heating and cooling capacity and is measured in tons. For example, a 3-ton HVAC system can cool a 1,500 to 2,000 square-foot home. Buying the proper size HVAC system ensures optimal performance and efficiency.


You get what you pay for, as the old saying goes. Buying an HVAC system from a sub-par or unknown manufacturer may cost significantly less, but it may be prone to breaking down or providing inefficient performance. Search for a make and model from a leading manufacturer with strong online reviews and a quality warranty.

Installation Complexity

Homes which require significant modifications to install the HVAC system can increase the overall installation price.

Where You Live

HVAC system prices, including installation costs and materials expenses, vary based on the location and local labor rates. Prices in New York City, for example, are higher than small towns in the Midwest.

Seasonal Demand

HVAC system replacement cost can fluctuate depending on the time of year. For example, a central air conditioner may cost more during the heat of summer when HVAC companies are busy, while furnaces may cost more during the dead of winter. Homeowners typically receive lower costs during the off-season.

Additional Features

HVAC system replacement cost can increase if you choose to pair your new heating and air conditioning system with additional features such as a smart thermostat, whole house air purifier, humidifier, dehumidifier, or variable-speed motors.

FAQs on HVAC Replacement

How much does it cost to replace HVAC?

According to, the average cost to replace HVAC system is $5,000 to $10,000. Factors that determine HVAC replacement costs include the type of system, the brand, and its efficiency.

Do you need a permit for HVAC replacement?

In most cases, you do need a permit for HVAC replacement. Reputable HVAC companies know how to obtain a permit to ensure the work follows local regulations.

Does home insurance cover HVAC replacement?

Home insurance policies will not cover HVAC replacement due to general wear and tear or old age. The cost of HVAC replacement may be covered if the unit was damaged under a covered peril.

How to replace HVAC filter?

HVAC filter replacement can ensure your HVAC system receives the maintenance it needs. To replace an HVAC filter, find and open the HVAC filter door or tray. It’s typically located in the furnace’s blower compartment. Pull out the old filter and inert the new air filter into the compartment.