Are extended service agreements worth it to keep AC units in shape?

Many HVAC companies offer agreements for homeowners to pay set annual fee

By Amy Davis - Reporter/Consumer Expert

HOUSTON - The thought of living without air conditioning this time of year is pretty hard for any of us to imagine, but keeping your air conditioning unit in shape can cost a lot of money. So Local 2 is taking a closer look at extended service agreements to see if they're worth the cash and if they actually pay off for homeowners.

"To catch something minor that could turn into something major like low on Freon could ruin your compressor. It's much better to catch a minor problem than wait until later and have a major problem," said contractor Curt Hicks.

If you're forgetful when it comes to maintenance, Angie Hicks, of Angie's List, said many heating, ventilation and air conditioning (or HVAC) companies are offering agreements where you pay a set annual fee for them to come and check things out.

"A maintenance agreement for your HVAC system can offer you some predictability in your costs," said Hicks. "It may lower the cost of a service call, for example. It also can help you prevent having to pay after-hours charges or emergency costs and can get you priority in line."

Most basic plans start around $150 and include a check-up and a tune-up at the start of the summer and winter. Some also include priority emergency service and a discount on parts. The more services the agreement includes, the more you pay.

"The drawbacks are you're paying for the expense up front and you may not need it. For example, you may not have a repair on your unit this year. So it's important to understand the condition of your unit before you make the decision to buy a maintenance agreement," said Hicks.

If your unit is in need of expensive repairs, it may make more fiscal sense to replace it entirely.

"Follow the rule of $5,000. If the repair cost times the number of years old the unit is more than $5,000 you should go ahead and replace. It it's under, go ahead and repair," Hicks said. "So, for example, if the repair costs $350 and it's a 10-year-old unit that only multiplies to $3,500, so you should go ahead and repair in that scenario."

When picking a plan, do your homework on the company you've chosen. Make sure they are licensed in the state of Texas and have the necessary insurance.

"Keep in mind that this is a long-term relationship with a company so it's only as good as the company that's offering it," Hicks said.

So what happens if you move? Check the fine print to see if the policy will move with you. Check here to verify a contractor's license.

Copyright 2014 by All rights reserved. This material may not be published, broadcast, rewritten or redistributed.