Straight Talk About Service Contracts

Is a service contract right for you? Maybe. Maybe Not. Here is some straight talk to help you decide.

There is always an ongoing discussion about the value of service contracts. Whether it’s televisions, automobiles or HVAC systems. Some feel it’s a wise investment and an insurance policy that gives peace of mind. Others will argue it’s a rip-off. So, who is right? As usual, the truth is not a function of the service, it’s a function of the type of person YOU are, and of what YOUR living conditions are like. To come to the right conclusions, ask yourself these questions:

1. Am I diligent in caring for things that are out of sight, and out of mind?

Some people were born with a screwdriver in their hands and insist on doing their own care, cleaning and maintenance on a variety of things – from cars to air conditioners. They follow maintenance guidelines and insist on keeping what they own in tip-top shape. Others can’t be bothered for a variety of reasons that may include a hectic lifestyle, more pressing considerations for how time is spent, or simply personal preferences with respect to what matters to them. So, what kind of person are you? Can you be counted on to replace your air filter once a season, do basic maintenance, clear duct work, check connections, inspect and clean mechanical parts to keep things in perfect running order? If so, then perhaps a service contract is not right for you. If, on the other hand life gets in the way and you tend to forget the more basic things like replacing your air filter, if you find the idea of maintaining an HVAC system too daunting, or you just don’t have time, then a service contract may be the solution.

2. How complex is my HVAC system?

Some HVAC systems are highly complex, featuring several mechanical pumps and heat generation and recovery systems. Examples include HRV’s, geothermal energy and multi-zone radiant systems. Indeed, some of the super-high efficiency systems we are asked to install would rival the price of a luxury car. These systems are complicated and require proper balancing, upkeep, and a critically trained eye. But many systems are much simpler in nature and easier to care for. If you’ve a complex and expensive system, a service contract may be the right approach – unless you were born with a screwdriver in your hand.

3. Can I Afford a Service Contract?

In today’s world there are so many “things” competing for our disposable income – from cell phone plans to extended warranties on virtually everything. And yes, a service contract for your HVAC system will create further impositions on your budget. Whether or not you choose a service contract for your HVAC system will be a function of how you choose to spend your hard earned money. Some insist on protecting their investments as much as possible, whereas others are willing to balance risk differently. This is a very personal consideration, and one that we respect fully.

4. Does my Investment Warrant a Service Contract?

It’s become common practice to use fear tactics to pitch service contracts and extended plans on almost everything we own. You may have even heard that some companies will not honour a warranty unless you do your share by following the maintenance schedules. In some instances, manufacturers are right to adopt a hard line. For example, what if you bought a car, never checked the oil – or changed it, and suffered a massive breakdown? The manufacturer would be within its rights to claim that you did not honour your end of the purchase. On the other hand, a television set has no moving parts and requires no maintenance, so a service contract is purely a hedge against the life expectancy of the unit. HVAC systems are a bit like cars. They have non-serviceable electronics as well as a variety of serviceable moving components. Both can break down. The electronics will generally be warrantied unconditionally, whereas the mechanicals will likely require upkeep and periodic tuneups and maintenance. Again, your decision will be very personal, based on how diligent you are, whether you wish to care for the system, and whether you can afford it.

5. How old is the HVAC system?

Your decision will also be influenced by the age and condition of your system. In many instances it will be a system that you’ve inherited as part of buying a resale home. In such cases, it pays to contact a knowledgeable HVAC specialist to report on the condition of your heating, cooling and ventilation systems, such that you can make informed decisions as to whether or not a service contract makes sense. In the case of a new home purchase, your system would be fully warrantied by the manufacturer, but not under the Tarion new home warranty program. Also be aware that in order to keep new home costs as low as possible, HVAC systems are generally of a lower quality. You should plan for this in order to extract the best life out of your HVAC system.

As with many things in life, the truth lies in the middle, and you can likely discount the extremes. Service contracts are not a ripoff, nor are they an absolute necessity, but rather should be gauged on their underlying value to you, and your lifestyle.

Straight Talk – HVAC Service Contracts