Should I Repair or Replace My HVAC System?

To repair, or to replace my HVAC system, that is the question. Or at least it is for millions of homeowners who make the difficult decision about whether to repair or replace HVAC systems each year.

On the one hand, a repair is less expensive and can often keep your heating and cooling system operating for a few more months or years. A system replacement, though, can instantly reduce your monthly energy bills and provide valuable peace of mind knowing your new system won’t break down for the foreseeable future.

If you have a decision to make regarding the fate of your heating and cooling system, keep reading to learn when it’s better to repair or replace HVAC system.

When to Repair or Replace HVAC System

Many homeowners automatically think the worst when their HVAC system breaks down. But, often, a simple repair can do the trick and get the system back up and running again. The following HVAC repair or replace tips will help you choose the correct course of action.

Age

Like all mechanical equipment, heating and cooling systems have a shelf life. The age of your heating and cooling system can serve as a good starting point in terms of whether to replace or repair HVAC. Although factors such as the system’s usage, maintenance history, and the climate you live in impact a unit’s lifespan, the following numbers can serve as a guide for how long units last and when to repair or when to replace an HVAC system.

• Air conditioners: 15-20 years
• Furnaces: 15-20 years
• Heat Pumps: 15 years

Energy.gov recommends calling an HVAC technician for advice about possible HVAC replacement when heat pumps and air conditioners are over 10 years old and furnaces are over 15 years old. Some heating and cooling professionals recommend a 12-year HVAC system lifespan for repair and replacement.

Commercial HVAC systems, meanwhile, typically last 10-15 years. If your commercial heating and cooling system is over 10-12 years old, consider a replacement.

Warranty

If the system’s warranty is still intact, it should cover the repair cost. If the warranty is expired, though, you're on the hook for an expensive repair. Replacement might be the best option if your HVAC system is aging, inefficient, or frequently breaks down.

Cost of the Repair

The cost to repair an HVAC system plays a crucial role in the HVAC system repair vs. replace debate. Many HVAC technicians use the "5,000 rule" when making this decision. Simply multiply the age of the system by the repair cost. If it’s under $5,000, consider a repair; if it’s over $5,000, it's probably better off buying a new unit.

If your air conditioning system needs any of the following repairs and the system is no longer under warranty, consider buying a new AC system::

• Evaporator coil replacement
• Compressor replacement
• Condenser fan motor replacement
• Refrigerant leak repair

History of Repairs

Repairs add up over time. If your HVAC company is on speed dial due to frequent repairs, it may make sense to put your hard-earned money toward the purchase of an energy-efficient HVAC system. According to leading HVAC manufacturer, Trane, one or two repairs within a three-year span may indicate your system still has value and repair should be considered. However, three or more repairs during this timeframe likely means your system is losing efficiency and may be on its way out soon, meaning replacement is the more viable option.

The HVAC System’s Efficiency

The efficiency of your heating and air conditioning system should also play a major role in your decision to repair or replace it. Older units are incredibly inefficient for a couple of reasons. Firstly, aging units become less efficient as they age due to wear and tear. Secondly, units manufactured just 10 years ago are far less efficient to begin with than today’s energy-efficient models. If you’re looking to reduce energy costs, consider HVAC system replacement.

• Air conditioners: An air conditioner’s energy efficiency is measured by its Seasonal Energy Efficiency Ratio, or SEER. Starting in 2023, new air conditioners are required to have a SEER of at least 14 in Northern states and a SEER of 15 in the Southeast and South. If your older air conditioner has a SEER under 10, consider replacing it instead of repairing it. According to Energy.gov, switching from a SEER 9 AC to a SEER 14 AC can reduce energy consumption by more than 35%. Some of the leading HVAC companies manufacture ACs with SEER ratings as high as 26. The higher the SEER rating, the more efficient the unit it is; but you’ll also spend more money.
• Furnaces. The Annual Fuel Utilization Efficiency (AFUE) determines how efficient a furnace is. Gas furnaces with 95% or higher AFUE in the North and 90% or higher in the South are considered Energy Star certified. When determining whether to repair or replace your furnace, 80% is a good threshold. Consider repairing or replacing it if it’s higher or lower than this percentage, respectively.
• Heat pumps: For heat pumps, consider repair if the SEER and HSPF are above 10 and 8, respectively. Consider replacing your heat pump if the ratings are at or below 10 and 8, respectively.

HVAC system efficiency is just one factor to consider when contemplating repair or replacement. The age and the cost of the repair also play pivotal roles.

Financial Incentives

Financial incentives such as federal government tax credits or rebates can make buying a new system more enticing than repairing an older one. If you’re considering buying a heat pump, now is the right time to act.

Through the Inflation Reduction Act of 2022, high-income homeowners are eligible for a tax credit of 30% of the cost and installation of a new heat pump system, up to $2,000. A component of the Inflation Reduction Act, the High-Efficiency Electric Home Rebate Act (HEEHRA), provides significant rebates for heat pumps. If your household income is 80% below your area’s median income, you receive the maximum rebate, covering your new heat pump at 100% up to $8,000. If your household income is 81-150% of your area’s median income, you’ll receive up to 50% off the heat pump’s cost.

Do You Plan on Moving?

Since buying a new HVAC system is a significant financial investment, it may not make sense to replace it if you plan on moving in the next few years, unless the system completely breaks down or poses a safety threat. If you have no plans to move, you will gain more value from buying a new energy-efficient heating and cooling system that lowers energy bills and won’t break down for the foreseeable future.

Environmentally Friendly

If you see both pros and cons of repairing vs. replacing your existing heating and cooling system, a final point to consider is the environment. If you’re an environmentally friendly homeowner and your system needs a repair and is around 10-15 years old, lean toward replacement.

New furnaces and air conditioners are highly efficient which will lower your electric and natural gas costs and reduce your home’s carbon footprint. Switching to a geothermal or an air-source heat pump completely eliminates your dependence on fossil fuels to heat your home during the colder months. During heating mode, a heat pump simply moves heat from the outside to the inside of your home using electricity and refrigerant.

FAQs on HVAC Repair or Replace

How much does a new HVAC system cost?

A new HVAC system, including installation, costs between $5,000 and $12,500, according to Angi. Some of the factors that affect the cost include the size of the system, the brand, and how energy efficient it is.

When to replace furnace?

If you’re trying to determine when to replace your furnace, consider its age, whether it’s still under warranty, and its history of repairs. Many HVAC professionals use the "5,000 rule" when determining whether to repair or replace a furnace. Multiply the age of the unit by the cost of the repair; if the cost is over $5,000, consider furnace replacement.

When to replace AC?

Knowing when to replace your AC unit often boils down to the unit’s age and efficiency. Well-maintained air conditioning systems can often last 15-20 years. If your AC unit is near, within, or past that age range, it may be best to replace it. Older AC units tend to become less efficient and can break down more frequently.

How much is a new AC?

A new AC costs $5,886 on average, with a range of $3,884 to $7,919, according to Angi. The efficiency, size, and brand of air conditioner affects its cost.