It's more than just the time there

They had to come to the house, find the right part number, order the heat exchanger, schedule a time to do it, change the heat exchanger, probably with 2 people, with some added required parts and materials, return the heat exchanger for warranty with filled out paperwork, and wait for their credit.

Not a easy or fun job I might add, but your still better off than buying a new $5,000 furnace.

I understand (as most business owners do) your anxiety over what seems to be a high hourly rate. These issues come up often in most forums. I don't think you should be chastised for asking since in today's environment, costs change frequently and they always seem to go upward. There are some out there who do overdo it a bit. Costs in your area vary from others so, to help you get an idea of what is part of that hourly fee, I hope the items listed below will help. You probably have some idea of what some of these things cost in your area.

The hourly rate doesn't just include what is paid to the 2 people doing the work. In addition to the up front labor Zl700 outlined, there is also insurance costs which are broken down on an hourly basis per employee (such as unemployment compensation, social security, liability insurance, auto, medical, just to name a few), fuel costs, vehicle cost and maintenance, tool costs,licensing fees, taxes, utilities an on and on. There are also administrative fees...lawyer, office administrative personnel (who don't bring in money per se but are required in a business). I could go on but I think you get the idea. After these costs are spread out per employee/per hour, the company needs to make a profit also. Unfortunately, the loaded hourly rate makes it appear the company is making a killing when they are not. If you were not receiving warranty work, the main area where the company could negotiate is on the cost of materials and some value added incentives.

Thank you so much for the kind response. That makes sense.

Small businesses are unfortunately very inefficient. They can't afford a big ad campaign and don't have name recognition, so have lots of dead time between customers but still have hungry kids to feed. You're paying for that dead time, and you shouldn't. Your Ford dealer has all those expenses mentioned above and still manages to post his labor at $50-$65 burdened because he keeps his crew busy.

So try the biggest shop around, or one run with a more realistic attitude toward value. Around here we have a robust Asian-American community that's often a good place to find value.

I paid $110 this year for about 1/2 hour labor and 15 miles trip charge. Texas

johnax

I respectfully disagree with your statement. Most small businesses are run much more efficiently than larger companies. There're numerous methods a small business guy uses to stay afloat without gouging. He won't be in business long, word travels fast, if he gouges and does poor work. A large business can absorb some losses resulting from poor work, repeat attempts, etc. from dishonest or irresponsible employees to a certain extent. For the most part, a large company will raise their labor or parts rates to compensate for it. I think we have all seen many big companies fail or become much smaller as a result. Sears for example. And remember Montgomery Wards?

A small business guy does not have that luxury. A small business that has been around a while can not afford dead time and those who have survived past the "5 year in business success period" have eliminated or made constructive use of any free time, if indeed there is any. Your best deals and work are usually provided by a smaller business. For example, most of the larger companies prefer commercial clientele over residential. They'll set a fixed rate at a commercial threshold and when a residential client asks for service, they'll pay that same rate.

Here's one area many businesses use to eliminate down time....Manufacturers need businesses to do warranty work for them. There's a lot of it out there and most small businesses use it, grudgingly, to fill in that time. I say grudgingly because there's not much of a profit margin. The manufacturer usually sets the rate which is at a level that makes THEM look favorable. The "survival" is in the volume of work which pretty much eliminates free time and consumes a lot of personal time too.

dusty,
glad to see that you understand all the expenses!
usually these threads turn into hvac co's raping
the homeowner, when actually the costs are justified.
I pay a lot for propane..cause they deliver it to me,
I'm sure if I could find a way to safely transport and
refill my tank the cost would be lower. But it is that
come to my house..their expertiese and their business.

some small businessess are very efficiently run.
just my .02

I am having a cole replaced under warrenty, labor is 817.00? Is this a fair price. They are replacing the evap. coil due to a leak.LT101A,

I'm tired of how people complain about the cost of having their units worked on. Put yourself in the technicians shoes, 1.He has to go to school for 2 yrs to learn the trade. 2.He has all kinds of expenses, (insurance, ware and tear on vehicles, food, gas, help, equipment, tools, etc). 3.He has to work in places few tread to go (under houses, in attics, tight places, mud, rain, snow, etc.)And most of the repairs is because the home owner neglected their units. A new unit will last 30 yrs if the home owner would take the time to do simple maintenance. Air conditioning and heating is one of the most important luxuries in your life so don't complain about the cost just pay the man and ask him what you can do to help your unit last longer.

The $250.00-$300.00 labor rate is exhorbitant!!! In Southern
California the labor rates normally average $120.00 per hour. In my area
it averages $90.00. That rate applies to any portion of an hour. If you
hire an Air Conditioning Repair service contractor under a flat rate charge, ask for an up front
complete parts. labor, and tax breakdown. This would not be an itemized
list but you would know their rates. Have them include the truck
charges and any other fees too.Remember, the customer is in
charge. If the contractor or service tech does not treat you
accordingly, then get someone else to do business with.

In my area (Salt Lake city), the going rate for HVAC is $400-$550 per hour, but getting an HVAC contractor to admit that is the rate is like pulling teeth from a cat, but if you manage too like I did with one contractor I had bid a job. The'll say "Well that is what we're getting away with charging".

"the going rate for HVAC is $400-$550 per hour"

That is more than what a surgeon earns per hour!

Can you give some examples of work that you had done and what you were charged?

There are from estimates. I'm now on my 7th furnace replacement bid looking for a fair deal (which is few and far between).
I had a gas line moved at my old place. Most of the HVAC contractors in town wanted 700-1200. I after a lot of work found one willing to do it for $200 took the tech 45 minutes to complete the job.

For my furnace replacements the bids have all been in the $6500-$8000 range. Which one contractor admitting to me they bill at $500 an hour.

Jastef_onemain_com It's interesting to read your rationale. However, I'm not getting the high worth because of 2 years of school. Have you ever known any pilots? How about $18,000 a year to first start? No one has a problem paying a pilot less than the Walmart greeter in his first year, after all what could he do besides kill you and all the other passengers on board, destroy an entire city block and who knows what else. Compared to the HVAC tech who has the risk of being called back out if he makes a mistake. I certainly understand the logic here. NOT! Tradesmen charge what they can get, period! lets call it what it is and let competition do the rest. If you have to hide your rates, then you're obviously trying to squeeze more than you should.

Well said!

Service dictates rates. If you have crappy service it's most likely due to a perceived low rate. (some people love to complain about something it's either what they are paying or how crappy the service is in how long they have to wait for service or repeated calls to get the system fixed.)

Typical call to me around 80% of the time (Katy, Texas area) I can have most air conditioning and heating problems resolved in less than 3 hours from when the call was placed. (I have this thing that I call statistics, these statistics are my own.)

Time is worth more than money. If you don't think so, you will always be on the short end of the proverbial stick.

You can get from me everything you can get from a big AC company, except with me you're not treated like a number. What is that worth? The world may never really understand that until that magic moment comes.

Just had the furnace and A coil replaced today. Took two fellas from 9AM to 1PM. Included removing old furnace and A coil, replacing with new units, fabricating the sheet metal to hook up ducting, reclaiming old R-421A freon, vacuuming the system, and adding 5 pounds of R-22. They hauled off the old material. Total bill was $2,200.

Lennox equipment, local company with decades in business. Total bill was less that two other estimates(less added freon).

They replaced R-421 with R-22? While I think R-22 is a better refrigerant, it's a whole heck of a lot more expensive (which is undoubtedly why the R421 was put in previously).

The company I had do the replacement charged me $50#---about the same rate as R421A would be, They do not use R421A and told me that during the estimate. I knew before agreeing about the differences and probable change/upcharge.

Funny when people complain about how repair companies are making a killing but they never start their own outfit. They must be masochists to not want to be on the other end of the deal.

Most HVAC guys I know are making a killing. They charge whatever they can get away with. They are easily clearing 150k/year even after figuring in all their costs. Good racket for going to a 2 year trade school. Some don't even need to do that and learn the biz by working for an HVAC company for a few year's then get a friend who is a contractor to use their license to get their materials. The entire industry is pretty scammy/scummy. Even the suppliers will often not sell direct to residential consumers. This is done to obfuscate true costs. Most condenser replacements are a 2 man job at best and take 6 hours so if you throw in diagnosis, transportation it's a 1 day job.

Ddr Hazy hit it on the head. Everything is so secretive (and everyone you talk to so thorny and ornery) only so you can't find out how hard you're getting screwed. Some contractors are making $4-6k-plus PER DAY labor for installs before paying one helper (maybe $20/hr). You might get charged $8k for new condenser and coil (1-day job) that's not much over $1k in parts. Or $5k for a 3-hour new furnace that's barely $1k for the actual furnace. Then there's the blatant 10x-plus markup on refrigerant. With installs they could work 10 days per year and make the median US salary or better.

Even when you find online companies that sell parts direct, the contractors are paying way less than that. If you try to buy any parts or equipment yourself, the contractor will get on a high horse and refuse to install it (because you are partially exposing his labor rate, and cutting into his additional profit on equipment mark-up). The suppliers will not quote you any prices, and won't sell you so much as a length of drain line. The manufacturers themselves refuse to even talk to you unless you are HVAC certified, and no I'm not exaggerating; many literally will not speak to you and will hang up . Even the state governments are involved (probably pressured by lobby groups); in NJ it takes 5 years experience to even get a license and that's after years of trade school - that huge bar to entry keeps competition relatively low. I'd say HVAC puts plumbers' rates to shame.

If you want to avoid getting hosed, I recommend finding an employee for a larger company or a retired technician and offering him a very healthy hourly rate (like $60-80/hr) to do jobs on the side and order parts through his license #. It's still a lot but you'll save 50 to 75%-plus parts and labor versus a company. That or buy parts online, find a handy guy (e.g. plumber/electrician) to do most of the install, and then have an agreeable HVAC guy (if can find one) spend one hour and wrap the job up for a couple hundred bucks. For some people though, the few thousand $ extra paid every few years isn't worth that hassle.

It costs a lot of money to get trained, tools, labor, benefits, overhead, parts are expensive, good techs are super hard to find it's right around what I would have charged

According to the BLS, the average hourly wage of a doctor is roughly $89. The hourly wage is higher for some specialties and lower for other specialties. Anesthesiologists average about $113 an hour, surgeons average about $111 an hour, internists average about $91 an hour, and pediatricians average about $81 an hour saying this my AC tech that charge 160 an hour is making more money than me that can save his live 🤣🤣🤣🤣im not dying for not having AC

I had two furnaces replaced in 2015. I spend a hear collecting estimates to replace the. Most where over $10000. The highest was $12000. When I finally had it done I paid 5800. It took 16 hours to complete the work. The whole sale peice of my furnaces was about $1500 and $1200.

I paid about $87 an hour and that was the lowest bid after a lot of effort to even get that price.

Your way off base

HVAC is a "market rate" (whatever people will pay) industry. You can get a pretty good idea what the equipment costs from online sellers. Subtract that from the total bill and you get the labor cost. Divide that by the number of man hours they take and you get the labor rate. Before anyone goes on about overhead, insurance, "parts on the truck", etc, - that's all built into the labor rate.

These guys aren't hurting, that's for sure.

It would be difficult to infer a contractor's profit from the total job cost even knowing the cost of equipment. You could subtract the cost of the equipment from the contract price, but the remainder would be a combination of the hard costs for other materials, and labor plus overhead and profit.

Ray,

Having someone execute my design doesn't make my role subordinate to theirs. Both are important. I'll admit I don't do the work in a hot attic. I earned an engineering degree and a P.E. license; my work environment is different from an installer's. So is my pay grade.

So it's only about money to you. Ironic talking about in a thread about what others make what's fair / not fair.

I'll admit I work with people and often give them more than one choice to solve the comfort problem they have without talking down to them / looking down my nose at them. Even if it comes to them choosing a lesser choice.

Cost is a thing, yet in other threads you like to pretend it's not when it comes to the cost of refrigerant among other things.

Clearly you didn't think about this before pounding on the key board. Thinking is apart of this job too, demonstating that I would put as more important than an engineering degree.