How much does a New Furnace cost?

by Team HomeServe |
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Rattle. Chirp. Bang. Clang. Is your furnace making suspicious noises? Perhaps the appliance is on the older side and you're worried it could give out any second, leaving you in the cold. Or maybe you're interested in upgrading to a more energy-efficient unit to lower your monthly bills. If your luck is anything like mine, unfortunately, your furnace will break down on the coldest night of the year and you'll be left with the chilling experience of buying a new furnace mid-winter - shelling out a lot of your cold, hard cash.

Here’s what you need to know about replacing your furnace.

The average costs

When considering the unit itself, furnace prices can be as little as $400 and as much as $6,000. However, you'll also need to add up the costs to remove the old unit and install the new one when undergoing such a hefty replacement. Installation costs will vary according to the type of furnace, averaging around $2,000 for gas and electric models and creeping up to as high as $6,000 for oil furnaces.

All costs considered, the national average cost to replace a standard furnace ranges from $2,000 to $6,000, according to estimates from Thumbtack.

The cost factors to consider

While you can keep these average furnace costs in mind, your bottom line will depend on several factors. The major ones to consider include:

1. Energy source

You can choose a furnace powered by either natural gas, oil or electricity. While gas models are the most common furnace type, electric ones tend to be the most affordable. However, keep in mind that your local gas and electricity rates may also affect your bottom line. HomeGuide broke down the average costs by furnace type:

  • Electric: $700 to $2,000.
  • Gas: $1,200 to $2,400.
  • Oil: $1,900 to $5,900.

In most cases, the best option will be to buy a furnace with the same fuel source as your old unit because you already have the necessary elements in place to support that type of furnace. There will be additional labor costs to consider when switching up the energy source, although factors like heating needs, energy efficiency, home size and location may justify the bill.

If you're installing a furnace in a new home for the first time, you'll want to weigh the pros and cons of fuel types when deciding which one is the right option for your wallet and comfort. For instance, a gas furnace will heat your home faster than other energy sources, but it also can require careful monitoring to avoid dangerous carbon monoxide fumes. Electric furnaces are easy to install and generally require minimal maintenance, although they may not heat as effectively in areas with harsh winter temperatures. Oil is by far the most expensive furnace type to install and run, which generally deters today's homeowners from choosing oil furnaces.

Upfront costs, durability, heating efficiency, carbon footprint and expected lifetime are all important considerations when deciding which type of furnace to install.

2. Energy efficiency

Furnace efficiency ratings indicate how well the unit converts fuel into heat, labeled as Annual Fuel Utilization Efficiency (AFUE). Most units have an AFUE ranging from 85% to 95%, with higher scores driving up the price of the unit. In money terms, a furnace with an 85% rating provides $0.85 worth of heating for every dollar you spend on running the unit. HVAC.com estimated the following furnace costs based on fuel type, efficiency and average installation prices:

  • Electric: $1,925 for standard efficiency and $4,410 for high efficiency.
  • Gas: $2,100 for standard efficiency and $4,625 for high efficiency.
  • Oil: $2,885 for standard efficiency and $6,480 for high efficiency.

While standard furnaces are more affordable than high-efficiency furnaces, the latter can be a smarter investment to help you save more money in the long term on monthly bills and upkeep. According to the Department of Energy, certified gas furnaces can save homeowners in southern U.S. states about $30 in energy costs each year, and $85 for those living in the northern half of the country. Oil furnaces that have received the DOE's Energy Star seal of guaranteed efficiency are up to 4% more efficient than standard units, saving homeowners up to $75 in annual energy costs.

While reducing your carbon footprint may be a more important consideration for your personal preferences, Thumbtack offered some money-saving advice: If you plan to move within the next five years, you won't have time to recoup the higher costs of a high-efficiency model. In these cases, an AFUE of 80% may suffice. However, if you expect to stay in your home for more than 5 years, furnaces with an AFUE of 95% can save you money in the long run as well as increase your home's resale value.

3. Furnace size

As you might assume, larger furnaces come with higher price tags. However, you won't want to skimp on size to save money, as choosing a furnace that's suitable for your home is crucial for top performance. The appropriate size depends on your home's square footage, construction, landscaping and orientation, local climate and the level of furnace efficiency.

A standard estimate is about 25 to 30 BTUs of heat per square foot for homes in moderate to warm climates, according to SF Gate Home Guides. By that calculation, a 2,000 square foot home would need a 50,000- to 60,000-BTU furnace.

The best way to determine an accurate estimate is to have an HVAC contractor perform a load test. The results will allow them to recommend an appropriately sized furnace to heat your home efficiently.

An HVAC contractor can also perform a full home energy audit to highlight additional gaps in efficiency, which will help you eliminate unnecessary and costly heating losses. If you're up to the task, you can even take a stab at the audit yourself by reviewing your energy bills, checking for drafts around doors and windows and inspecting your installation.

4. Installation

When determining the final price of your new furnace, be sure to factor in the labor costs associated with removing your old unit and installing the new one. This is especially important considering, in many cases, that these installation costs can be more than the price of the unit. Also, labor costs vary by furnace type, home location and the HVAC professional's level of experience.

According to estimates from Thumbtack, HVAC contractors generally charge about $75 per hour for furnace replacement. However, they may charge more than average if the project requires extensive ductwork installation, changes in fuel type and other supplementary work to get the furnace in place. HomeGuide estimated the following figures as average additional furnace replacement costs, including:

  • Old furnace removal: $50 to $155.
  • Existing ductwork replacement: $110 for removal, $12 to $38 per foot for installation.
  • Additional electrical power installation: $40 to $85 per hour.
  • HVAC inspections: $150 to $175, or upward of $700 for full insurance reports.
  • Programmable thermostat installation: $15 to $320.

Barring any significant complications or system alterations, the installation should only take one day to complete.

When hiring an HVAC contractor, get estimates from a few different service providers. Remember that a low price may not always equal quality work, so be sure the contractor checks all the other boxes as well. They should be HVAC-certified, licensed, bonded and insured, and positive reviews from previous customers can help seal the deal. If you have a home repair plan or warranty that covers your HVAC system, simply call your provider and they can connect you with certified, trustworthy professionals.

5. Warranty plans

Many modern furnaces - especially those sold by big-name brands - include a 10- to 15-year warranty with the purchase. However, keep in mind that manufacturers may require you to register the furnace at the time of purchase to actually honor the warranty. What's more, the warranty may only cover certain furnace repairs and replacements, such as problems with the heat exchanger, blower motors, electronic controls or other vital components.

Depending on the furnace manufacturer, you may have the option to purchase additional warranties to cover other repairs and services for a designated period of time.

Separate from the manufacturer's warranty, reputable HVAC contractors also offer warranties to cover the labor costs associated with necessary repairs if the furnace fails to perform properly after installation. Just be sure to get the details of the coverage in writing before saying goodbye to your contractor.

Another way to protect your furnace is with a home repair plan or warranty. Some providers will offer coverage for HVAC systems and appliances, including furnaces. If you have a plan in place, your provider may be able to cover some of the costs that align with the plan's coverage requirements, such as replacements that are necessary due to normal wear and tear on the original furnace.

6. Brands

Savvy shoppers will compare different brands to find the most affordable furnace that meets their needs. Some of the most popular and well-trusted brands include American Standard, Bryant, Carrier, Lennox, Rheem and Trane.

If efficiency is important to you, narrow your options by sticking to Energy Star-certified furnaces. Consumer Reports is another trustworthy resource for furnace recommendations, with the unbiased product-testing organization highlighting Ruud, Trane and American Standard as the most reliable natural gas furnace brands.

For reference, HomeGuide listed average prices by brand and furnace type (parts and installation costs included), such as:

  • Rheem: $2,990 for gas, $1,825 for electric and $5,250 for oil.
  • Trane: $3,500 for gas, $2,195 for electric and $6,550 for oil.
  • Lennox: $4,100 for gas, $2,260 for electric and $6,100 for oil.
  • American Standard: $3,600 for gas and $2,300 for electric.
  • Ruud: $3,200 for gas.

Note that because natural gas is the most common heating fuel, you're likely to find the widest selection of models among gas furnaces.

7. Ongoing costs

Along with the initial new furnace's purchase cost, you'll need to budget for running the unit and keeping it in good shape. Proper furnace maintenance is one of the most effective ways to save money on your energy bill in the long run, which includes changing the filter regularly and scheduling annual performance checkups with an HVAC professional. Other easy ways to lower your heating costs include:

  • Keeping vents clear from contact with furniture and other household items.
  • Cleaning your chimney regularly, if you have one.
  • Closing exterior windows and doors when the heat is on.
  • Adjusting ceiling fans to spin clockwise so they push warm air down.
  • Using curtains and other window coverings to seal the heat inside.
  • Setting your thermostat to optimal temperatures.

If you're ready to make major home upgrades for more heating and cooling efficiency, consider investing in energy-efficient windows, appliances, lighting and other money-saving home improvements.

The signs of furnace trouble

With such hefty costs to consider, it's important to recognize when furnace replacement is a smarter decision than simply repairing the damage. Here are some of the warning signs to know:

Age

Most furnaces have about 15 to 20 years of life in them. Furnace repair costs can be nearly as steep as the cost of buying an entirely new unit, so if you're experiencing problems with an older furnace, the smarter move is usually to replace the unit. In fact, many HVAC experts advise against spending more than a third of the furnace's original cost to repair a furnace issue, according to Thumbtack. If you don't know how old your furnace is, locate the serial number on your unit and call the manufacturer to determine its age.

Spikes in monthly bills

Significant increases in heating costs can be an indicator that something is amiss with your furnace.

Inefficient heating

If the temperature varies drastically from room to room, your furnace and ductwork system may be on the struggle bus.

Short cycling

Furnaces may turn on and off frequently without any interference on your end if there's a problem with the unit.

Troublesome noises

If you hear rattling, popping, humming, screeching, squealing or other concerning sounds coming from your furnace, it's probably trying to tell you that something is wrong. It may be a simple part replacement, but there's also a chance you'll be better off buying a new furnace.

Abnormal smells

A whiff of gas or burning fuels can also be a sign of furnace trouble.

If you notice any of these worrisome indicators, don't hesitate to have an HVAC professional check out your furnace. A licensed technician can identify the problem, and advise whether repair or replacement is the better move.

The steps to prolonging the life of your furnace

As mentioned above, regular maintenance is the fuel that keeps your furnace running efficiently for as long as possible. While you can manage a lot of the upkeep on your own, it's important to get an expert on the scene by scheduling at least one professional inspection each year. During these tune-ups, an HVAC technician will perform tasks, such as:

  • Checking all systems controls and safety mechanisms for proper performance.
  • Testing the thermostat and recalibrating if necessary.
  • Measuring part performance and making adjustments as needed.
  • Inspecting the heat exchanger for cracks or deterioration.
  • Assessing ductwork and pipes.
  • Cleaning or replacing the air filter.
  • Lubricating moving parts.

What's more, a licensed technician has the knowledge and experience to identify potential warning signs and make cautionary repairs that prevent more serious issues - like an all-too-unfortunate mid-winter furnace breakdown.

Your to-do list will look something like this:

  • Replace the filter regularly: Check in on your filter every three months to see if it needs cleaning or replacing. Clogged, dirty filters will restrict airflow, making your furnace work harder to warm your home.
  • Seal the drafts: Use caulk or weatherstripping to seal doors and windows. That way, the chilly air won't sneak in and the warmth your furnace generates can't escape. SF Gate Home Guides also recommended using special adhesive-backed foil tape or duct sealing mastic to seal holes and seams in your ductwork.
  • Get your insulation up to par: The proper insulation ensures you don't lose heat through attics and crawl spaces. In addition to sealing your ductwork, you can also insulate it for even more efficiency.
  • Install a programmable thermostat: If you want to up the efficiency, consider upgrading your thermostat. Programmable models ensure your furnace isn't running unnecessarily, such as when you're sleeping or away from the house.

Remember that preventative HVAC maintenance tasks can help to make sure the entire system is in good shape to support your furnace. Your upkeep efforts may help to extend the life of your furnace and can help to maximize efficiency so that you may see a reduction in your monthly bill.

Being prepared for furnace issues before they arise is always a good strategy. See how home warranty plans from TotalHome Warranty by HomeServe can help with the costs of covered appliance and home system repairs.