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12 Year Parts & Labor Warranty! Too Good to be True?

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There are heating equipment manufacturers offering ‘full’ 12 year labor warranty on their equipment. In essence they are making a promise that your installing contractor will have to keep (or not), as no homeowner ever buys equipment directly from the manufacturer.

There are heating equipment manufacturers offering ‘full’ 12 year labor warranty on their equipment.  In essence they are making a promise that your installing contractor will have to keep (or not), as no homeowner ever buys equipment directly from the manufacturer.

In order to discuss the viability of a 12 year parts-and-labor warranty we need to go over some facts about our industry.  To provide more clarity it is best to compare and contrast our industry with the automotive industry.

When buying a $25,000 to $60,000 automobile, the dealer will usually offer you some kind of warranty . . . 100,000 miles, drive train, bumper-to-bumper, etc. The manufacturer, when selling that automobile to the dealer, keeps an internal hold-back reserve to cover a reasonable amount of money to pay the dealer for labor costs over a 3-5 year period (never 12) if you as the buyer will need to use that warranty coverage.  In the HVAC industry the typical equipment sale from manufacturer to wholesaler is less than 10% of that of a car and therefore the internal hold-back reserve is much smaller.  Plus installation quality is the main factor on heating equipment life (and also repairs) whereas an automobile functions the same off the lot no matter who drives it.  Consequently the amount of money available to the HVAC contractor is much more limited, as the manufacturer has fewer resources supporting and less quality control over the final installation.

Based on this reality, an HVAC warranty is not nearly as robust as an automobile warranty.  In essence the guarantee of a warranty is based on two major factors:  an HVAC Company owner’s honorability and the company’s longevity.

HVAC Company Owner Honorability – Manufacturer’s sell equipment to middlemen (wholesalers) who in turn sell to the contractor.  Consequently their relationship with the contractor is tenuous at best.  Auto manufacturers will pressure dealers to honor warranty and keep high levels of customer satisfaction; their primary leverage is dealer access to new inventory (allotment of top selling vehicles in particular).  HVAC manufacturers simply want to move product ‘out the door’ to the wholesaler, and hope for the best that their wholesalers will work closely with quality contractors to keep homeowners happy.  An unscrupulous HVAC company owner (and there are many) may choose to find any kind of reason not to honor their warranty if they do not have available capacity to service your unit during weather extremes, financial strength, or simply greed.  If the company has been sold, the new owners almost never honor this warranty (and they will tell you over the phone).

HVAC Contractor Longevity – It is reasonable to assume that, since warranty is a money losing proposition, no other contractor will honor someone else’s warranty (we certainly do not).  If the contractor fails, the homeowner has essentially lost their warranty, and the money they paid for a warranty is now worthless.  No other contractor will willingly lose money to repair another company’s installation.  If you couple this with the fact that contractors go out of business more than almost any other industry (with the exception of restaurants) a 12 year warranty is really a fantasy.

In closing, when you are offered something that seems like an amazing deal of a 12 year warranty, keep your hand on your pocket book, and ask a few more questions as to what is involved.

Posted by Evergreen State HVAC, February 20, 2017
Located in: HVAC System Maintenance, Heating and Cooling Testimonials

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Evergreen State Heat & AC - 2120 Pacific Avenue, Everett, WA 98201
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