Service contract..worth it?

Old 06-02-03, 09:43 AM
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Service contract..worth it?

Hi, I'm new here, so if this is an old boring subject, let me know.
It's time to renew my "presidential plan" again, and I'm beginning to think it may not be the smartest way to go. I've been with this company for 10 years, and have paid probably close to $2000. for the plan over this time. Good side is, they replaced my original old furnace that was in the house when we bought it about 5 years ago under the plans warranty, it cost me either $100. or zero to replace, my memory fails me. So now I'm thinking that if that furnace makes it 20 years (realistic?) and I continue with the plan I'll have paid out at least $4000. by then.
Is it worth it? Can I buy a new one and have it installed for less than that? These plans are pretty much like a life insurance may never collect, but it gives you peace of mind.
Any input??
I should add that this is an oil fired forced hot air system.

Old 06-02-03, 10:17 AM
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service contracts

it all depends on several factors. it sounds as if you are referring to a home warranty. personally i am against them, as they are not concerned with efficiency of the unit, just keeping it running until the policy rolls over for renewal. what you need is a true service contract, with regular visits from a trained service tech. this regular maintenance should include all cleanings (burner and/or coils), filters, freon up to a certain amount, etc. many offer an "inspection service" stay away from them, EVERYTHING is extra. regular maintenance will prolong the life of your unit and save you money in the long run.
Old 06-02-03, 10:48 AM
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What I've got is a deal where for $199/year they do a cleaning/inspect/test and will replace any component in the furnace that fails. It did not cover the oil tank I had replaced two years ago. Like I said, the old unit failed and they did replace it under the terms of the contract, using one of their own units, and I'm happy with that!
I can get a yearly service from several small local firms for approx. $80/year, no contract, and they check and test all the same stuff.
So my conumdrum is to continue to spend the $200/year for as long as I own the house (minumum 10 years to go, maybe forever) or just spend the $80/year with the other guys and take that $120 difference that I save and use it elsewhere and know that if the furnace fails I will pay for it out of pocket. It seems that at some point I will have paid out more than what a new unit would cost to buy and install, yes?
Old 06-02-03, 11:20 AM
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Replacing a furnace will probably be at least $1000, but a new unit should not need replacing anytime soon.
Old 06-02-03, 05:55 PM
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Red face maintainence contracts

these are mainly for the customers piece of mind that should anything fail, its on them to get it going...Thats a good feeling sometimes especially if your a busy person that has the tendency to FORGET to schedule the furnace tune-up in September...on the coldest night on record, your furnace quits, and pipes can freeze quickly, even with heat sometimes as I found one time in Alaska...Contract customers are serviced first, then call ins afterward for many companies...They usually make the installer install extra protective devices to help prevent damage to a unit.
It's a crap shoot...a week after you let it expire the fan motor will die....don't you know!!!! Oh ya...

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