Understanding the Costs Behind HVAC Warranty Repairs
Wondering why HVAC repairs come at an expense despite having a warranty? We break down the underlying economic dynamics and explain the process and costs involved in a repair — helping you to understand the value of our service and pricing structure. Read on for a complete breakdown of the warranty repair journey.
Despite having a warranty, it seems that the expense for HVAC repairs remains substantial. So, why isn't it complimentary, you might ask? Let's break down the intricacies of the economic dynamics behind HVAC warranty repairs in this enlightening piece.
Indeed, we do not encounter such queries daily, but they do arise occasionally throughout the year. As such, homeowners must grasp the underlying factors contributing to the price of a warranty repair. To be fair, without comprehensive knowledge about warranty repairs, they may appear costly. Therefore, this article aims to demystify the process and costs involved in a repair, allowing you to recognize the value of our service and our justified pricing structure.
THE Justification FOR THE CHARGE
You may be accustomed to automotive warranties, where issues within the warranty period don’t cost you anything. Auto dealers bill the manufacturer for the work done, thus securing their payment. However, the business model for HVAC dealers is different; they don't receive any payment from the HVAC manufacturers for warranty repairs. Instead, they only receive reimbursement for the parts’ cost. Now, let's go through the warranty repair process and costs.
EXPLORING THE WARRANTY REPAIR JOURNEY
Diagnostics
Most companies have diagnostic fees ranging from $95 to $125. This fee mainly contributes to overhead expenses such as administrative costs, vehicle maintenance, and the initial portion of the service call.
Part Ordering
Once the repair need is identified, the requisite part has to be sourced from a distributor. This process isn't always smooth, often involving extended hold times, especially during peak seasons, hence incurring additional costs.
Part Pickup
The next step involves physically collecting the parts to perform HVAC warranty repairs. The time spent on this task varies depending on the technician's location and waiting time at the distributor's counter.
Drive Time
Post pickup, the part has to be transported back to your residence so we can make the HVAC warranty repairs. This journey may extend to at least half an hour or more, plus additional office coordination for scheduling.
Installation
The installation process can be time-consuming and complex, with factors such as rusted bolts, broken wires, and secondary problems potentially complicating the task.
Secondary Warranty Reserve
We value our reputation and back our work. However, there could be situations where a second unrelated issue arises soon after the repair. In such instances, we bear the cost of the additional repairs, a factor we must account for in our pricing.
Warranty Part Filing
Recovering the costs from the manufacturer is not as straightforward as receiving a check. We are required to store the replaced part in our warehouse for 60-90 days, depending on the manufacturer's policies, file a warranty claim, and then wait for reimbursement. This entire process consumes significant time and resources.
Overhead and Profit
It might seem surprising, but our aim is to make a modest profit. The overhead costs of maintaining a business, including various insurances, facilities, software, and general administrative expenses, are substantial. At the end of the day, our net profit for every $100 of work might be around $5.
THE BOTTOM LINE
Let's consider a scenario where the repair is uneventful and takes approximately 30 minutes to an hour to complete. Considering the diagnostic, approximately 4-5 hours are invested in supporting that one-hour repair. If the total repair costs $500, we might see a profit of around $25. If you feel this isn’t fair and that we should charge less, we beg to differ.
While we strive for your patronage, operating at break-even or a loss would compromise our ability to deliver exceptional service. Feel free to explore other options, but rest assured; our pricing is quite reasonable for the top-tier service we deliver.
Other Resources about HVAC Warranty Repairs
Does a Home Warranty Cover Your HVAC Repair & Replacement?
"Does A Home Warranty Cover Your HVAC Repair & Replacement?". 2021. Cielo Wigle.
HVAC Warranties: What You Must Know
"press, copy. 2022. "HVAC Warranties: What You Must Know". Mcgee Heating & Air Inc.. https://mcgeehvac.com/article/hvac-warranties-what-must-know.
https://mcgeehvac.com/article/hvac-warranties-what-must-know
Everything you need to know about carrier warranty
Fitzgerald, James. “Everything You Need to Know about Carrier Warranty.” Forbes, January 2, 2023. https://www.forbes.com/home-improvement/home-warranty/carrier-warranty/.
