Negotiating on an HVAC purchase?

panerd · 05-09-2018, 08:10 AM

So we have an approx 10K purchase ahead of us and I was wondering if anyone knew how much wiggle room you really have on an air conditioner quote. Didn't know if we were in used car land where I could actually get the guy down $1000-2000, if we were in $500 off land, or if those quotes are actually the bottom line. Didn't want to go in guns blazing if this was bottom line but of course anything off would be gravy.

Also they offer financing or a $1500 "rebate". Was going to pay cash but thought about putting it on a rewards credit card to get another 20000 miles. Would this really cost the guy hundreds of dollars if he says he doesn't take credit? Never could understand if Visa etc actually charge like 1-2% of the whole price or if that cuts off at some price point. Seems like I could factor in some negotiation there as well.

Warhammer · 05-09-2018, 08:45 AM

You may want to ask if he gets a kicker on the financing, and based upon that if he can work with you.

As far as I know, the 1-2% charge has no limit, so it does cost him.

Most installers I worked with would base their price on doubling the cost of the equipment. Yes, that is 50% margin, but their labor and other costs are buried in there as well.

What tier are you going with? Due to how they price things, there is not a lot more labor between installing a low grade or mid grade unit. A top tier unit may have more programming, but that should be relatively minor. This means they have more room to move on the higher tier units than on the lower tier units.

This will also depend upon how difficult it will be to replace your existing unit, they normally have a production modifier, or factor, which they use to estimate the amount of time to replace it. If it is an easy install, they might be there 4 hours. For mine, it took 6 hours, but mine was average. If you are in the nightmare category, they might need to bill for 12 hours of labor.

panerd · 05-09-2018, 09:54 AM

Well they offered the standard "good, better, best" but I'm guessing that changes for type of house, income, etc... Our choices were about 5K, 7K, 9K so this is the higher SEER rating one of the three. But you are right the labor should be identical on all three units so they are working with a $4000 margin that is probably only somewhat built into the cost.

I actually have no problem paying the sticker if that's what the cost is I just didn't want to walk away from this transaction like a guy that bought the Mustang off the lot for the number in the window if that number is negotiable.

Appreciate the info some things to consider and discuss with him.

JPhillips · 05-09-2018, 09:57 AM

This sounds like something CUTiger could advise upon.

Warhammer · 05-09-2018, 10:09 AM

Quote:

Originally Posted by panerd

Well they offered the standard "good, better, best" but I'm guessing that changes for type of house, income, etc... Our choices were about 5K, 7K, 9K so this is the higher SEER rating one of the three. But you are right the labor should be identical on all three units so they are working with a $4000 margin that is probably only somewhat built into the cost.

I actually have no problem paying the sticker if that's what the cost is I just didn't want to walk away from this transaction like a guy that bought the Mustang off the lot for the number in the window if that number is negotiable.

Appreciate the info some things to consider and discuss with him.

If the guy is honest, the good, better, best corresponds to the grade of unit. This is independent of income, etc. However, size of the house is inherent in the pricing. A unit is based upon its tonnage, which is dependent upon the size of the house. I believe I have a 3.5 ton unit for our house.

Most have a 92/93% efficiency unit, a 95% unit, and a 97-98% unit. These may have changed slightly since I left the business, but you do not want to go with the cheap units because they have stripped as much as they can out of the units, not that they won't work, but the build quality is normally lacking.

The questions you should ask are, is the unit properly sized for my house? Did they size it themselves or base it upon what was already there (some home builders deliberately undersize to save money on the house, that said, it is better if the unit is slightly undersized than oversized, this is due to how they work, etc.)? Are there other things we can do to the house to prevent infiltration, heat loss in winter, heat gain from surroundings in summer? As a sales guy, I always like to ask, if you were me, what would you go with, and why? It isn't which grade he answers, you want to hear the why. If he tells you the top tier because it is cool, do you want to work with him? If he tells you the low tier because they only are designed to last 10 years anymore anyway, he is being honest. If he tells you the top tier because you come across as a tech savvy guy and he thinks you will like the features the unit has, he has been paying attention to you, etc.

Personally, I went with a mid grade 95% unit as I had a better built unit, without all the bells and whistles of the 98% unit, many of which I could not access without a lot of work to the ductwork in the house.

I assume you have gone with the best tier, based upon price (it could be mid tier as well now given price increases over the last 5 years). What brand is it? Are you getting any fancy controls?

EDIT: As a lot of my normal posts, this is a bit of stream of consciousness as I am working.

CraigSca · 05-09-2018, 10:20 AM

Just a heads-up, we've bought two systems in the past 6 years. One for the downstairs, another for the upstairs.

The first we bought was (for lack of a better term) a regular AC unit (it's basically on or off). The second one we bought was a variable speed for the upstairs. Were I to do it over again, I'd get two variable speeds. We set the thermostat to 75 downstairs and 78 upstairs and because it removes more humidity, the 78 feels cooler than the 75. Yeah, they're expensive, but with maintenance program we haven't had a single problem with any of the systems (and we'd die if we did, as we live in Florida).

We had a number of estimates and decided to go with the guy who told us our current systems (original build) were over-sized. He was the only one who didn't just ask us the Sq footage of the home. He went from room to room, took measurements, counted windows, etc.

Warhammer · 05-09-2018, 11:40 AM

Quote:

Originally Posted by CraigSca

We had a number of estimates and decided to go with the guy who told us our current systems (original build) were over-sized. He was the only one who didn't just ask us the Sq footage of the home. He went from room to room, took measurements, counted windows, etc.

I was alluding to this a bit. Your contractor did it right.

So what happens when you oversize the unit, it runs a shorter cycle, this results in moisture being pulled out of the air and sitting on the coil. When the unit runs longer that moisture gets cleared out of the system so your coil lasts longer. It also puts strain on the compressor, as it is doing more starts and stops which is bad for rotating equipment. It also causes higher power bills because your unit uses 4-6 times more power to start up than to run (in-rush current), the more you cycle, the more you have the spikes, etc., etc.

EDIT: with the variable speed units, they make sense if you are going from an ancient unit to a new unit as there is a cost savings, I was never able to make one work out on a cost savings side if you were comparing to a newer unit. The advantage of the VFD unit is the unit is essentially never off, but is only pulling what the demand calls for, as well as keeps air flow constantly moving in the house.

Grammaticus · 05-09-2018, 12:28 PM

I had my heat/air package unit replaced in November for the downstairs. They wouldn't budge on the price, but gave me an extra free year of maintenance / cleaning in negotiations. I got the best unit they offered which raised the SEER from 10 to 15. Package units cannot go as high. My cost was right around 5K though. I think pricing and unit types are more available by region.

Of course I was getting mine replaced the next day Because it was 5 degrees outside.

RainMaker · 05-09-2018, 02:33 PM

I'm replacing mine. Had a few quotes and went with the one that did my furnace a couple years ago. Comes to around $4300 but there is a $200 rebate the union offers.

I just got offered a standard Carrier and a deluxe version. The deluxe seemed to just have a few small features added and maybe a better build.

I never got the feeling that prices were negotiable.

stevew · 05-09-2018, 05:01 PM

9K seems crazy expensive.

Warhammer · 05-09-2018, 09:48 PM

Quote:

Originally Posted by stevew

9K seems crazy expensive.

Depends upon the size of the house and what you have done, our house is 2200 sq ft, and we had a new furnace, coil, and outside unit installed for 7.5k 4 years ago. 9k is reasonable if the house was bigger.

CU Tiger · 05-10-2018, 09:54 AM

Depending on several variables $9k could be anywhere from "I didnt even get kissed" to "Is this thing hot"

Here are the variables you needs to answer that question.

Type of system: Package Unit, Split system, Split system with gas pack, etc.
What is being replaced. If its a split system are they replacing the air handler as well or just the outdoor unit.

SEER Rating: Energy efficient is just math. SEER is just the energy it's "supposed" to use, divided by the energy it actually uses. That's best-case in a test environment. If you put the unit in an unconditioned attic, it's not going to be very efficient, and that has nothing to do with the numbers on the side of the box. Likewise, you could replace a 10 SEER unit with a 15, and if it's in an old house with shitty windows, it's probably not going to make much of a difference.

That said unless you have a super new Energy Star LEED certified (joking) home the highest SEER rating will never ROI.

SIZE: Yes size matters. Of course the physical size they are quoting will drive the price. If you tell me they are installing a 2.5 Ton for $9k...I'm moving to where you live.

Labor/Install: Are you replacing all the ducts (depending on home age I maybe would) can they back a pick up right next to you outdoor unit or will they have to bring equipment in to move it. This seems trivial but a telescope loader (lull) costs about $800/day to rent. If the company doesnt own one that could be having a real impact on your price.

If they will give you the make and full model number of the unit they are putting in you can go online to Amazon or Ebay even and see precisely what the unit costs. Now dont get cheap here, a good contractor is going to charge you basically double the cost. Labor costs are real and significant, if he is legit he has insurance etc.

Dont get starry eyed over brands.
Trane owns/makes American Standard. They are the same exact components. AS is usually last years Trane model.
United Technologies Corp - Makes Carrier, Bryant, Payne, Heil and Tempstar
Lennox makes Ducan, Armstrong, Concord and Allied
Rheem makes Rudd
Goodman makes Amana and Janitrol
York makes Colemaan and Luxaire
Nortek makes Maytag, Westinghouse, Frigidaire

etc.

05-09-2018, 09:57 AM	#4
JPhillips Hall Of Famer Join Date: Nov 2002 Location: Newburgh, NY	This sounds like something CUTiger could advise upon. __________________ To love someone is to strive to accept that person exactly the way he or she is, right here and now.. - Mr. Rogers

05-09-2018, 10:20 AM	#6
CraigSca Pro Starter Join Date: Jul 2001 Location: Not Delaware - hurray!	Just a heads-up, we've bought two systems in the past 6 years. One for the downstairs, another for the upstairs. The first we bought was (for lack of a better term) a regular AC unit (it's basically on or off). The second one we bought was a variable speed for the upstairs. Were I to do it over again, I'd get two variable speeds. We set the thermostat to 75 downstairs and 78 upstairs and because it removes more humidity, the 78 feels cooler than the 75. Yeah, they're expensive, but with maintenance program we haven't had a single problem with any of the systems (and we'd die if we did, as we live in Florida). We had a number of estimates and decided to go with the guy who told us our current systems (original build) were over-sized. He was the only one who didn't just ask us the Sq footage of the home. He went from room to room, took measurements, counted windows, etc. __________________ She loves you, yeah, yeah, yeah, yeah! She loves you, yeah! how do you know? how do you know? Last edited by CraigSca : 05-09-2018 at 10:24 AM.

05-09-2018, 08:45 AM	#2
Warhammer Pro Starter Join Date: Feb 2004 Location: Dayton, OH	You may want to ask if he gets a kicker on the financing, and based upon that if he can work with you. As far as I know, the 1-2% charge has no limit, so it does cost him. Most installers I worked with would base their price on doubling the cost of the equipment. Yes, that is 50% margin, but their labor and other costs are buried in there as well. What tier are you going with? Due to how they price things, there is not a lot more labor between installing a low grade or mid grade unit. A top tier unit may have more programming, but that should be relatively minor. This means they have more room to move on the higher tier units than on the lower tier units. This will also depend upon how difficult it will be to replace your existing unit, they normally have a production modifier, or factor, which they use to estimate the amount of time to replace it. If it is an easy install, they might be there 4 hours. For mine, it took 6 hours, but mine was average. If you are in the nightmare category, they might need to bill for 12 hours of labor.

05-09-2018, 09:54 AM	#3
panerd Grizzled Veteran Join Date: Jul 2001 Location: St. Louis	Well they offered the standard "good, better, best" but I'm guessing that changes for type of house, income, etc... Our choices were about 5K, 7K, 9K so this is the higher SEER rating one of the three. But you are right the labor should be identical on all three units so they are working with a $4000 margin that is probably only somewhat built into the cost. I actually have no problem paying the sticker if that's what the cost is I just didn't want to walk away from this transaction like a guy that bought the Mustang off the lot for the number in the window if that number is negotiable. Appreciate the info some things to consider and discuss with him.

05-09-2018, 12:28 PM	#8
Grammaticus Pro Rookie Join Date: Nov 2005 Location: Tennessee	I had my heat/air package unit replaced in November for the downstairs. They wouldn't budge on the price, but gave me an extra free year of maintenance / cleaning in negotiations. I got the best unit they offered which raised the SEER from 10 to 15. Package units cannot go as high. My cost was right around 5K though. I think pricing and unit types are more available by region. Of course I was getting mine replaced the next day Because it was 5 degrees outside.

05-09-2018, 02:33 PM	#9
RainMaker General Manager Join Date: Jun 2006 Location: Chicago, IL	I'm replacing mine. Had a few quotes and went with the one that did my furnace a couple years ago. Comes to around $4300 but there is a $200 rebate the union offers. I just got offered a standard Carrier and a deluxe version. The deluxe seemed to just have a few small features added and maybe a better build. I never got the feeling that prices were negotiable.

05-09-2018, 05:01 PM	#10
stevew Hall Of Famer Join Date: Dec 2003 Location: the yo'	9K seems crazy expensive.

05-10-2018, 09:54 AM	#12
CU Tiger Grizzled Veteran Join Date: Nov 2006 Location: Backwoods, SC	Depending on several variables $9k could be anywhere from "I didnt even get kissed" to "Is this thing hot" Here are the variables you needs to answer that question. Type of system: Package Unit, Split system, Split system with gas pack, etc. What is being replaced. If its a split system are they replacing the air handler as well or just the outdoor unit. SEER Rating: Energy efficient is just math. SEER is just the energy it's "supposed" to use, divided by the energy it actually uses. That's best-case in a test environment. If you put the unit in an unconditioned attic, it's not going to be very efficient, and that has nothing to do with the numbers on the side of the box. Likewise, you could replace a 10 SEER unit with a 15, and if it's in an old house with shitty windows, it's probably not going to make much of a difference. That said unless you have a super new Energy Star LEED certified (joking) home the highest SEER rating will never ROI. SIZE: Yes size matters. Of course the physical size they are quoting will drive the price. If you tell me they are installing a 2.5 Ton for $9k...I'm moving to where you live. Labor/Install: Are you replacing all the ducts (depending on home age I maybe would) can they back a pick up right next to you outdoor unit or will they have to bring equipment in to move it. This seems trivial but a telescope loader (lull) costs about $800/day to rent. If the company doesnt own one that could be having a real impact on your price. If they will give you the make and full model number of the unit they are putting in you can go online to Amazon or Ebay even and see precisely what the unit costs. Now dont get cheap here, a good contractor is going to charge you basically double the cost. Labor costs are real and significant, if he is legit he has insurance etc. Dont get starry eyed over brands. Trane owns/makes American Standard. They are the same exact components. AS is usually last years Trane model. United Technologies Corp - Makes Carrier, Bryant, Payne, Heil and Tempstar Lennox makes Ducan, Armstrong, Concord and Allied Rheem makes Rudd Goodman makes Amana and Janitrol York makes Colemaan and Luxaire Nortek makes Maytag, Westinghouse, Frigidaire etc.

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