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If you’re installing a new HVAC system or repairing an older one, many companies offer an extended HVAC service contract or maintenance agreement. These contracts can be a blessing, but they can also be a waste of money. By understanding more about what these contracts are and what they offer, you can make an informed and wise choice.

What are heating and air conditioning service contracts?

Service contracts are agreements between you and an HVAC service provider wherein you pay a set fee to guarantee the company’s ongoing services for your HVAC system.

With the most basic contracts, the service includes a checkup and tune-up emphasizing your heating system at the start of the winter and air conditioning system before summer. You can also find contracts that include parts and service for problems found during those checkups, and some will even include emergency service.

They sometimes also include priority treatment, which can save you time and discomfort when your heater fails in the freezing cold or your air conditioner blows out in the heat of summer The more services the contract includes, the more you will pay.

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In many parts of the United States, air conditioners aren’t just a luxury, but a necessity during the summer months. Newer central A/C units are quieter, more powerful and more energy efficient than earlier models, and they can offer greater value by helping to lower energy bills each month.

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Which A/C options can you cost more?

Several factors can increase the cost of your air conditioner installation. If you need a new thermostat, for example, or if the design of your house is such that substantial amounts of duct work are required to link with your existing furnace, you’ll pay more than average.

The seasonal energy efficiency ratio (SEER) is also a critical factor. This ratio is a measure of an A/C unit’s total cooling output (measured in BTU) during a season, divided by its total electric energy input. The higher the resulting number, the better. Currently, all units sold are over 13 SEER, and some can perform at up to 27 SEER.

The advantages of improved SEER ratings are lowered energy costs and cooling times, but they come with a corresponding cost increase. If your hot season isn’t particularly long, the increased price may not be worth it.

It’s also possible to quiet a noisy air conditioner. Louder units can run over 80 decibels on a hot day, which is painful up close. Many municipalities have passed laws that require new installations to be under a certain decibel level. At 75 decibels, for example, you’ll probably hear the unit from the garage or through a window on the same side of the house, while at 70 it will begin to fade into background noise. Most popular brands offer high-efficiency, low-noise models for an increased price.

Air conditioning costs depend in large measure on whom you hire, what size system you need and your A/C unit’s overall efficiency.

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Other factors affecting the repair/replace decision

Aside from the unit’s age, a few other signs can signal it’s time to replace your air conditioner, according to Energy Star. Consider how frequently you make repairs, whether your energy bills are rising or if your home is too hot in the summer.

“How long are you going to live in the house, and what are your utilities like?” Hamlin says. “If the unit is older and the repair is a couple hundred dollars, it may not be worth fixing.”

If you do buy a new, energy-efficient A/C unit — which costs $3,600 to $7,200 — Energy Star estimates a 20 percent savings on heating and cooling costs.

On the other hand, some HVAC technicians say if it’s not broken, don’t fix it. If your system shows no leaks and your energy bills are low, Hamlin sees no reason to replace it.

To gauge the condition of your existing A/C, schedule an inspection with an HVAC technician.

Editor’s note: This is an updated version of an article originally posted on May 16, 2014.

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Energy efficiency matters

Recent advances in A/C technology have greatly improved energy efficiency. Energy Star recommends upgrading to an energy-efficient unit if your current central air conditioner is 10 or more years old. Many HVAC technicians say they typically recommend replacing units if they are 15 years or older. Jeren Hamlin, owner of Airtech Heating & Cooling in South St. Paul, Minnesota, says the average lifespan of an A/C unit is about 14 years.

In Thomas’ case, HVAC experts say she should replace the unit because of its age and cost of the repair. (She decided to buy a ceiling fan, by the way).

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