Reasonable extended warranty (oceanfront)?

david_caryMarch 3, 2012

I have a new construction house with 2 new Trane XR15 heatpumps in coastal NC. They have 10 year part warranty and dealer wants $1000 for each unit to have a labor warranty that also covers freon recharges. They tell me that it costs about $800 to swap out the external unit. So you have to burn through 2 external units or have an internal problem also in 10 years to make the warranty pay for itself.

Normally, I would think that is highly unlikely but this is oceanfront and most people quote a 5 year life on the external units. They are installed on the other side of the house from the ocean and are pretty well blocked from salt spray. They have the add-on needed for protection from rust required by Trane for their warranty.

This is a weekly rental and I expect some abuse from renters.

Any thoughts?

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bpchiil

David,

I for one am not a fan of any extended warranty - they are merely a money maker for the manufacturer, regardless of the goods or services being provided.

Of course you don't have to take my word - just check any consumer advocacy website and you will see that they state that extended warranties are a waste of money.

In terms of the Freon re-charge coverage - if you are having to replace freon, you simply have a leak. Freon does not get "used", it leaks out of the system- therefore, this in itself is a false sense of warranty coverage.

Again, my HO.

Good luck.

    Bookmark   March 4, 2012 at 10:55AM
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mike_home

Is this a Trane labor warranty, or is it a warranty from the contractor? If it is a Trane warranty, are you paying a premium due to the close proximity of the ocean?

It doesn't sound like a good deal. You are better off banking the money and paying for the labor as needed. Since this is a rental property, any repairs can be used to offset rental income.

Can you cover the units outside of the summer season to improve the protection from the salt air? If you did this you should pull the fuses so your renter can't turn the AC on when the cover is in place.

    Bookmark   March 4, 2012 at 11:15AM
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david_cary

Thanks for the advice. I don't know whether it is a Trane warranty or a contractor warranty. I agree about the leak issue but it seems like when the external units rust out, they often leak a little the year before they technically need replacement. Obviously with a part warranty, I will always push for replacement whenever it needs charged.

I am never a fan of warranty's either. But occasionally, you are getting a good deal because of some circumstance not factored in to the price. A neighbor actually buys one of those $500 a year home warranty's that pays for itself many times over because it covers the cost of new units (he doesn't have any other warranty). It is a good deal because the home warranty company hasn't figured out that they shouldn't cover oceanfront a/c or hp units.

Can't really cover the units often because the rental season is 8 months long and then we need the heat to protect the pipes although freezing temps are only usually a few hours long a few times a season. You can need a/c in March/November and you can need heat.

Our units are better protected than 95% of oceanfront so I think I will pass on the warranty.

    Bookmark   March 5, 2012 at 6:34AM
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heatseeker

to mike home;
Extended wArranties are A money maker for manufactures? You got this info from consumer reports? Consumer reports is a rag that needs dummies to buy it so they will say anything to support the dummies of the world that buy it. First off if you ever bought a new car and didn't buy an extended warranty your a fool because one breakdown of a critical part will pay for it. Secondly tghese days warranties on r410 systems are standard ten yrs and you can opt for labor coverage. Thirdly if there is a freon leak chances are that will not be covered depends on the warranty small print.

    Bookmark   March 5, 2012 at 10:36AM
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mike_home

Heatseeker,

The OP stated he was quoted $800 in labor to swap out one external unit. So it did not make sense to me to pay $2000 in 2012 for the two units in order to cover $1600 in possible labor charges. The insurance premium is higher than the potential back during the 10 year period. This warranty does not sound like it is from Trane which also makes it unattractive.

FYI I have a 10 year parts and labor warranty for my furnaces and condensers from Carrier. The contractor did not break out the prices for me, but I think I paid about $300 per unit ( 2 furnces, 2 condensers). I agree I will get back my investment if I have one repair.

Warranties are money makers for manufacturers, if they were money losers they would not offer them. Do you agree?

I read Consumer Reports, but I don't agree with everything they say.

    Bookmark   March 5, 2012 at 10:53AM
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harlemhvacguy

extended warranties are a crap shoot most of the time. but a few thoughts about this situation.... a/c units take a beating in a rental set up beach or otherwise. its probably not a matter of if you will have problems, its when in that 10 years and how many. 1000 a piece is a little on the high side on price. dealer is not willing to give you a break for buying 2? the extended warranty does allow you to already budget in what it will cost for a/c repairs where as without it repair costs could be unknown.

    Bookmark   March 5, 2012 at 11:17AM
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heatseeker

stick with the manufacturers warranty not the installers. In five years the cost of that labor to install a new condenser will surly be higher. Labor prices go up not down. Because of salty air you will probably have problems. Also I assume this is r410a refrigerant correct?

    Bookmark   March 5, 2012 at 11:55AM
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ionized_gw

Heatseeker, go ahead and buy an extended warranty on your car, heat pump or toaster but you should understand that it is just an expensive insurance policy. You are better off setting aside the money for repairs as self insurance.

Some people don't understand numbers (probability) or capitalism. Why would anyone offer to sell you an extended warranty if they are not making money on the product? Consumer Reports is heavy on logic and statistics, not emotional reactions. Trust the numbers.

    Bookmark   March 5, 2012 at 12:23PM
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tigerdunes

David

A couple of thoughts.

You want the Trane warranty, third party warranties are a piece of junk.

The Trane warranty should be no more than 10% of the total installed price for both systems.

And finally, this cost can be written off on your taxes as an expense.

IMO

    Bookmark   March 5, 2012 at 12:53PM
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harlemhvacguy

the problem with the laws of probability are they work good until you are the one that has the problem. the problem i run into most often is customers talking about setting aside the money and actually doing it is two seperate things. but i agree it is a gambling game. the numbers are in the sellers favor but it still leaves a lot of people on the wrong end of the gamble. Many ways of looking at it.

    Bookmark   March 5, 2012 at 1:03PM
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ionized_gw

In the OP's case, it is a good question. Once in blue moon, an extended warranty can be a good deal. If the warranty is a very general one, covering every customer in the country on the same rate, and you figure that you have a higher stress situation, you can go for it.

As a simple example, road hazard warranty on tires can be like that. My dad is a rural highway/interstate driver and has had maybe one one flat in 30 years. If he pays the same rate as an urban driver for a warranty he's nuts. OTOH, if a hurricane has just passed through your area, and roofing nails in the streets are ubiquitous, you should go for it if you are buying a new set of tires.

    Bookmark   March 5, 2012 at 2:49PM
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