This depends on your gas rates and how often you use the furnace. Think of it this way: for every $100 you spend on gas, with an 80% AFUE furnace, you're throwing away $20, and with a 95% AFUE furnace, you're throwing away $5. That's one way to think of it, though not the best way since the payback isn't always there in some climates. In your climate, however, I would think it's worth it.

There is a federal tax credit worth $1500 for 95% AFUE furnaces now, so it doesn't make much sense to leave that on the table. It's almost like a free upgrade.

Installation costs very by location and jobsite, depending on what's needed, but gas furnace installations typically go anywhere from $3500-$5500.

I live in Central NJ and I have a 95% 100k btu input furnace for a two story 2800 square foot home. and basically the furnace is too big. I have it locked in first stage which is 65000 btu input and it is heating the house with no problem this winter (in 1st stage alone) even when the outside temperature dropped to 2 degrees.

The installer would not give me a breakout but my total cost for the trane xv95 and a trane xL15i AC was $9600 - $1000 rebate = $8600 net and it included a TC803 thermostat and a chimney liner. I was told the AC is more expensive than the furnace so my furnace cost is something less than $4300 depending how much more expensive the AC was. I also had quotes from a local homedpot which was 5700k for the same furnace (before rebate) which is at least $1100 more expensive. I was also quoted from Sears and they were even more expensive (for the carrier version).
Key1

thanks for the respones

key1- if its permissible on this website/forum and you don't mind telling- who did you use for the installation?

not sure if it is appropriate to post the info . My email adress is listed on the linked HVAC website. Send me an email and I'll email you back all the info...
http://hvac-talk.com/vbb/member.php?u=77762

We recently replaces a 50-60% old lennox furnace with a 96% bryant. We ran all new lines and put a coil in for future A/C. The house is 2500+ sq ft. Our old balanced bill payments were $245. Our new balanced bill payments are $165. Saving us $80. month. We are now in the process of hiring a spray foam installer to better insulate. We are located along Lake Erie so we get cold windy winters.

By the way the cost was $8400, including all labor and Evolution series furnace, air handler/filter humidifier, coil, thermostat, and all new lines