How Much Does A New Furnace Cost?

Let’s start by making sure we are on the same page. When we discuss new furnace cost we are talking about what a furnace replacement costs when done by a professional HVAC contractor.

A furnace installation should never be installed by a do-it-yourselfer. Install plumbing wrong in your home and you could have water damage. Install a furnace wrong and someone could die. Don't mess with it unless you know what you are doing.

When people ask, "How much does a new furnace cost?" it's not a simple answer. It depends on your choices in three important areas.

  • Furnace Efficiency
  • Furnace Features
  • Installing Contractor

You’ll notice that the furnace brand is not listed as a factor. Despite the marketing hype, the price of a new furnace has little to do with the furnace brand.

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During my 30 years in the heating and air conditioning trade I have sold and installed every major furnace brand. All were priced similarly.

That idea of one brand being more expensive than another comes from manufacturers. They hope being seen as more expensive gives the perception of being better.

Contractors feed this when explaining why their proposals are higher then competing proposals. It’s simply not true.

So let’s take a closer look at the areas that do affect new furnace cost.

Furnace Efficiency

Furnaces fall into two categories of efficiency. For simplicity sake we will discuss them as 80% efficient furnaces and 95% efficient furnaces.

The exact numbers will vary among manufacturers and furnace models but the pros and cons of each will remain the same.

80% efficient furnaces are the least expensive to install and will hookup similarly to a furnace from 30 years ago. The downside is that they cost more in utilities and tend to be the noisier. Not loud just noisier when compared to their 95% big brother.

Another concern is that they draw all their combustion air from within the home. Combustion air is the air needed for your furnace to burn fuel. Everything that burns needs oxygen and your furnace is no different. This can become a safety issue if your furnace is located in a small room or closet.

95% efficient furnaces cost more to install because of extra materials and labor. If installed properly though, they are less expensive to operate and quieter. They also draw combustion air from outside of the home so there is no concern if placed in a closet or small room.

When it comes to determining how efficiency will affect a new gas furnace cost, it’s best to choose based on your climate. The colder your climate, the better off you’ll be with a 95% furnace. The initial extra expense will be returned in utility savings within three to seven years.

Furnace Features

There are a few added features on certain models that effect cost of new furnace. The two features most often pushed are two stage furnaces and variable speed furnaces.

The discussion of these features can be complicated so rather than go into the pros and cons here see these two articles to learn more. Is A Two Stage Furnace Worth It? and Are There Benefits to a Variable Speed Furnace?

I’ll give you the short answer though. They will add significantly to the furnace cost up front and even more down the road. They are designed to require major and expensive repairs after the warranty runs out in ten years.

A homeowner with these features will experience costly repairs and a much shorter equipment life. Any wonder why manufacturers and contractors are offering incentives and discounts on them?

The Contractor

Heating and air conditioning systems are unlike any other appliance. Bring in any other appliance in your home, plug it in and off you go. Not so with a new furnace.

This equipment needs to be installed properly. Then it needs to be set up and tested to make sure it operates as designed. All of this needs to be done by a contractor that knows his stuff. And that’s the real trick.

Nothing makes more of a difference in the cost of a furnace replacement than the contractor you hire to install it. It's also the area that I see people make the biggest mistakes.

Here’s an example: Contractor A prices a furnace installation at $2000. Contractor B prices the same job at $3500. Most people would be quick to conclude Contractor B is trying to rip them off. Often though, the lower priced contractor is cutting out proper design, labor and materials.

These cuts would have helped your furnace operate properly, reduce future repairs and extend its life. In reality, Contractor A is ripping you off.

The wide range of prices you see usually has much more to do with the quality of the installation. Lets be clear though, just because a contractor is priced higher does not mean he is doing a better job.

It’s hard to find the right contractor. Many people choose the company with the best marketing or the one with the lowest price. Both choices tend to leave people disappointed.

After over 30 years in the industry I’ve met both honest and dishonest contractors. The good companies are harder to find but they are out there. And they’re worth finding.

If you want more information on finding good contractors click here.

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