Reason for the high furnace replacement cost

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First off, I am not here to say anything bad about HVAC guys, they are hard workers and they are earning their income fairly, and since they are all charging this much it means there are reasons behind this rate, and it is market rate.

Looking at the rate of a typical $2500-3000 for a furnace, and another $2000-3000 for install. I can see that HVAC guys need training, driving to and from customers, the unpaid quote giving work, installing and uninstalling, massive liability insurance, etc leads to the $2000-3000 installation cost. But still, why so much more than a gas dryer installation?

Regarding to the furnace, even the cheapest non Goodman cost like $2k easily. Compare to a water heater or gas laundry dryer of similar rating (say 60000 BTU), why is it so much more expensive?

It also seems like mini-split shouldn't be too expensive to install, but it seems like it still is. What gives?
 
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The units change sizes between generations, this leads to ductwork. Often ductwork is degraded or too small, leading to more work under the house or in the attic sweating to death.
 
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It's a business and they have overhead. Office, Warehouse space, utilities, inventory, wages, payroll taxes, health insurance benefits unemployment taxes, worksmans comp insurance, vehicle cost to purchase, maintenace and fuel for vehicles in fleet, vehicle insurance, and registration costs, liability insurance for the business as well as training and state business licenses, mercantle taxes on sales volume.

My neighbor is a HVAC business owner and he doubles the price of materials used to cover his expenses for running the business on top of his hourly rate. Look at that furnace and realize it has a twenty year life expectancy. $5,000 up front works out to $250 per year or $21 a month.
 
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So a gas dryer. you connect the gas hose to an existing gas connection, connect the vent to the existing vent location, often using either simple bends or metal flex hose.

A furnace means removing the old furnace, gas connection, and electrical connection (that is not a plug) from the custom sheet metal work done for the current installation, including cold air return and supply ducting, the venting, and the gas piping. Then reinstall a unit that requires the fabrication of all of the parts that you just took out since the dimensions and locations are all inevitably slightly different.

So the gas dryer guy can show up with some simple duct parts and a toolbag and get the install done. The other requires the ability to make a bunch of stuff on site and adapt to whatever the setup situation is. The dryer guy is there for 30- 45 minutes. The furnace crew a lot longer... The install cost is a lot lower when you are doing many multiples of installs in a day versus one or two...
 
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HVAC people make BANK on markup. Lennox at costco gave me a quote...about $8,000 for a new energy efficient gas heater and 5 ton air conditioner unit. A friend's brother in the business quoted $4800 for the same seer stuff, but different brand, installed. This was 8 years ago and it all still works great. He told me he was still making money on the job.
 

PandaBear

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Very true, a lot of duct work and heavy equipment. Then it should make sense that mini-split would be more popular and cheaper to install. However it doesn't seem like it is the case though.

It's a business and they have overhead. Office, Warehouse space, utilities, inventory, wages, payroll taxes, health insurance benefits unemployment taxes, worksmans comp insurance, vehicle cost to purchase, maintenace and fuel for vehicles in fleet, vehicle insurance, and registration costs, liability insurance for the business as well as training and state business licenses, mercantle taxes on sales volume.

My neighbor is a HVAC business owner and he doubles the price of materials used to cover his expenses for running the business on top of his hourly rate. Look at that furnace and realize it has a twenty year life expectancy. $5,000 up front works out to $250 per year or $21 a month.

That would be the same between all jobbers right? Plumbers and electricians, for example.

My plumber quote me $500 to replace a water heater if I buy it and haul away myself. I would imagine it is impossible an HVAC guy would do the same for a furnace swap. Which makes me wonder, if installation takes a whole day for a furnace why aren't size sort of standardized to make swapping faster?
 
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I think it basically boils down to labor and time. You need a crew to install the furnace. I've known people to install their own though, basically hooked up the whole thing, swapping the old one in with the new and then just had a plumber hook up the gas and have it fired up. Was much cheaper than having a crew install it, but it took a while. Basically paying for that $100+ hourly charge for all the hours it takes to install it.

Water heaters typically take an hour or two to install. Several more if they have to buy it and remove the old one. Usually I get plumbers to do it for around $200 and handymen to do it for under $200. Still takes time to run to the store and pick up the water heater. The trick is to make sure you get one that's the same height as the old one, otherwise adjusting the pipes to fit a higher or lower one takes longer.
 
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In Colorado over the last 8 years the state has had a 12.7% growth rate every year. It's supply and demand. We looked at wholesale furnace costs and a wholesale carrier, Bryant was $ 1100, we had companies quoting $6,000 for the same furnace. That's a ton of mark up.
 
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where can i directly buy a furnace and install myself w little help from sheetmetal working uncle?
rheem preferred
 
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where can i directly buy a furnace and install myself w little help from sheetmetal working uncle?
rheem preferred
There are lots of places online, even Amazon (but I don't see Rheem brand there). Here's one:


But you have to shop around for the best price including shipping. This last spring I bought a replacement evaporator (A coil) for my furnace from Amazon and installed that myself.
 
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I do HVAC and I can tell you the prices of furnaces has almost doubled in the last few years. That's our price too I'm talking not what the customer is paying.

As far as mini splits go if you want a name brand one its going to cost you. They cost more than a regular ducted split system AC.
 

PandaBear

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I do HVAC and I can tell you the prices of furnaces has almost doubled in the last few years. That's our price too I'm talking not what the customer is paying.

As far as mini splits go if you want a name brand one its going to cost you. They cost more than a regular ducted split system AC.

I once asked the guy who added a Carrier AC to my duct on top of my furnace on a quote to replace the furnace (too loud, over sized -> too hot), he said my original quote for AC was way too low for today as it was during a good time (before the hyper inflation, during recession, before regulation for higher SEER kicks in). He said he couldn't guarantee a quieter operation and it would cost too much to be fair to me, so he refused the job. Honest guy. He installed my Carrier 3 ton 12 SEER for $2300 all included about 9 years ago, includes running a 240V line.
 
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There are lots of places online, even Amazon (but I don't see Rheem brand there). Here's one:


But you have to shop around for the best price including shipping. This last spring I bought a replacement evaporator (A coil) for my furnace from Amazon and installed that myself.
so did you solder the connections also and then paid someone to come fill the system?
i am pretty experienced with sweating copper water pipe how comparable is the soft flex copper install for ac lines?
 
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When I had mine replaced, there was a two man crew here for a 12 hour day, so 24 man hours.

What do you think a fair labor rate is? $90/hr? That's $2,160.

Don't forget all the little incidentals like the disconnect, pad for the compressor, float switch, overflow drain pan for under the furnace, new thermostat...I paid $5,700 for a 4 ton 3 piece setup in 2015 and I thought that was fair.
 
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If your car part dies and you have to get a new one locally, it's going to cost you twice as much as mail order. When you buy a new furnace, you are buying one locally.

Then add all the custom install for the ductwork. You could have it fabricated and cut out the HVAC company as well.

You are going to take a lot longer to install it.
Most people can't wait that long to have something installed.
 
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so did you solder the connections also and then paid someone to come fill the system?
i am pretty experienced with sweating copper water pipe how comparable is the soft flex copper install for ac lines?
I did everything, I do have 609 certification which isn't the right one for HVAC but it is enough to do this job. The furnace didn't have an access door of any kind for the coil so it had to be cut out, that was the hardest part for me since I had never done anything like that before.

I bought some Stay Brite 8 solder for the connections and some HVAC tubing at Granger. It soldered together great, I've got most of the 10' pieces of tubing left over but the total cost was a lot less than having someone else do it, even with the freon cost.

I did insulate the rest of the piping, just a little later than the photo.

IMG_8563.JPG
IMG_8567.JPG
 

PandaBear

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When I had mine replaced, there was a two man crew here for a 12 hour day, so 24 man hours.

What do you think a fair labor rate is? $90/hr? That's $2,160.

Don't forget all the little incidentals like the disconnect, pad for the compressor, float switch, overflow drain pan for under the furnace, new thermostat...I paid $5,700 for a 4 ton 3 piece setup in 2015 and I thought that was fair.

True. These days they won't send people out for at least $400 for half a day. When I hire builder who took days off from main job to do side jobs (no license but they work for builders who do high end homes), they typically charge between $300-$500 a day for jobs like plumbing, cabinets, stucco, back splash, etc. The lead / foreman said if I go to a "company" it would at least double that, and not even guarantee a good quality (those probably 3x or 4x).

When I got that AC install I already had the copper line inside the wall on both places, the duct work and control line are already there too. Just had to solder the pipe together, install the condenser, add the evaporator, run a 240V. That took them about 3-4 man days together (the boss went in and out to give quote between helping his employee, I think). I did an AC install at the end of fall beginning of winter, so that probably is why he got a great deal for the Carrier 3 ton (and he didn't apply for permit). The other guys gave quote between 1800 (a guy who try to do it behind his boss' back), 2700 (4 ton Bryant), and 3500 (3.5 ton Trane, that guy does mostly commercial AC), so I'd say it is not too far off from each other.

That was about 9 years ago, so I'm sure it is no longer valid of a quote and would at least double now.
 
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It's a business and they have overhead. Office, Warehouse space, utilities, inventory, wages, payroll taxes, health insurance benefits unemployment taxes, worksmans comp insurance, vehicle cost to purchase, maintenace and fuel for vehicles in fleet, vehicle insurance, and registration costs, liability insurance for the business as well as training and state business licenses, mercantle taxes on sales volume.

My neighbor is a HVAC business owner and he doubles the price of materials used to cover his expenses for running the business on top of his hourly rate. Look at that furnace and realize it has a twenty year life expectancy. $5,000 up front works out to $250 per year or $21 a month.

And in addition to all the above ^ cost of being in the HVAC business in the vast majority of locations they are a feast of famine type of business. I have a cousin who has a small HVAC shop. When the first hot days of summer arrive, and when the first cold days of fall arrive he is soooo busy that he does not have time to count the money and to do the paper work to pay the bills from all the suppliers he has to order parts from. But when the weather warms up enough that people do not require there furnace but it is not hot enough to require AC he and his employee often have no work at all. They do repair commercial refrigeration systems for restaurants, bars, stadiums, and grocery stores, but that is not a steady enough business, and now days much of that has also fallen apart.

And spending days on the roofs of restaurants working on there systems when it is the hottest days of the year, or when it is raining or very cold out is also part of the job.
 
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