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Air Conditioning Replacement or Repair: What’s Right for You?

Find out when it’s right to replace your old HVAC system and when a repair is in order.

September 24, 2021

If a failing AC system no longer keeps your home comfortable, it may be time to consider an air conditioning replacement. An air conditioner nearing 10 or 20 years old likely needs an upgrade. Newer models run more efficiently than older systems, which can also reduce your monthly energy bills.

AC replacement costs can range from $5,800 to $14,000, according to Trane’s air conditioner price estimate, depending on what system you choose for your comfort needs. There are many different central AC system options to cool your entire home, or ductless AC to cool a specific portion of a room.

Beyond AC equipment itself, several factors affect air circulation in your home, such as ducts and insulation. Before shelling out money on an air conditioning replacement, consider having a professional take a closer look at your current system to determine whether a repair or replacement would be your best option.

Table of contents:

When to replace your AC unit

The older your air conditioner is, especially if it's more than 10 years old, the sooner you should consider replacing the equipment. An older system may frequently break down, and over time, the manufacturer might discontinue certain mechanical parts. Not being able to replace broken parts would be a key sign it’s time to replace your air conditioner. Here are a few other indicators to look for:

Increased energy bills: AC systems can lose efficiency over time and older units may use more electricity than they did when they were new. You may notice an increase in your energy bills as your AC unit becomes less efficient. Damage to the unit, such as a leak, could also cause the unit to work overtime to cool your home, which could raise your bill. Either way, expensive bills may be a good reason to purchase a new unit.

Low SEER rating: While a low SEER rating doesn’t always indicate inefficiency, you may want to consider an upgrade if your unit scores lower than the minimum standard rating of 13. A SEER rating measures the energy efficiency of air conditioning units. The minimum rating will increase in 2023, putting older units even further below standard.

Freon use: The U.S. Environmental Protection Agency phased out the use of R22, or freon, in air conditioners in 2020. If your AC unit runs on freon, start shopping for a replacement. You may not be able to access freon when your unit needs a repair.

Consult with a licensed HVAC professional to inspect your AC unit and diagnose the issues.

High repair costs: As your air conditioner ages, the unit may need repairs more often. If you feel that you’re putting too much time and money into frequent repairs, you may want to consider investing in a new unit. We’ll discuss the “$5,000 rule” in a later section.

AC replacement cost

The cost to replace an AC unit would include the price of the unit plus installation fees. As mentioned earlier, the total cost could range from $5,800 to $14,000. However, many variables would impact your final price, including but not limited to:

  • Your location
  • The difficulty of the installation
  • The size of your home
  • Potential ductwork modifications
  • Necessary electrical upgrades

HVAC manufacturers or dealers may offer special discounts or rebates to customers. For example, you can check out Trane’s current deals to see how much you could save. Meet with an HVAC professional to learn more information.

Keep in mind that upgrading your AC unit, or any piece of your HVAC system, is an investment that would pay off over time. Here’s how much you could save in one year when you buy a new air conditioner or furnace:

Average yearly energy cost savings
Air conditioner

*AC results based on PickHVAC’s SEER Savings Calculator for a 3-ton 22 SEER air conditioner versus the industry standard 14 SEER air conditioner in St. Louis, MO. Furnace results based on PickHVAC’s AFUE Savings Calculator for 95% AFUE rated furnace compared to a 60% AFUE rated furnace in a 2,700 square foot home in St. Louis, MO.

Other considerations include:

The $5,000 rule: Multiply the age of your equipment by the estimated repair cost. If the number is more than $5,000, then you should consider replacing your unit. If it’s less, a repair may be the answer. For example:

  • A system that is 10 years old and has a repair cost of $300 = $3,000. It’s probably best to repair it.
  • A system that is 10 years old and has a repair cost of $600 = $6,000. You should likely consider a replacement.

Existing warranties: Air conditioner warranties from most manufacturers last five to 10 years. Your repair may be covered. If you are the original owner of the unit, check the paperwork you receive upon installation for warranty information. You may also be able to look up your warranty on the manufacturer’s website using the unit’s serial number. New homeowners should check with the HVAC manufacturer to see if a warranty transferred with the sale of the home.

Financial savings: Regular repairs and maintenance can extend the life of your AC unit. Servicing your AC unit once or twice a year and covering periodic repairs may be more affordable than buying a brand new system. But keep in mind that a new AC unit would likely offer more savings in the long run if you can front the cost.

Repair or replace? 3 questions to ask before deciding

When determining whether you need a full air conditioner replacement or a single repair, ask yourself these key questions:

  1. How often does your air conditioning unit break down? Annual maintenance is common — and recommended — for AC units. If your equipment needs fixing more frequently, it may be more reasonable to purchase a new unit rather than paying for ongoing, expensive repairs.
  2. Do you have a matched system? Air conditioning systems are generally made up of two matching components — an indoor furnace or air handler and an outdoor air conditioner or condensing unit. Replacing either the indoor or the outdoor unit without replacing the other could reduce the system’s overall efficiency and cause additional failure. If you need to replace your entire air conditioner, you’ll likely need to replace the furnace as well to ensure you have a matching set. Keep this in mind if you’re considering an AC replacement.
  3. Are you ready to make an investment? A new cooling system comes with considerable upfront costs compared to a repair. However, there are financing options available to make the investment more manageable.

Remember to bring in an HVAC professional to inspect your AC unit and diagnose the issues you’re facing to help you make the right decision for your home.

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