How Much Should You Spend on a New Central Air Conditioner?

white air conditioner installed above the window of the living room
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The cost of replacement for a central air-conditioning unit will significantly depend on the size of your home and the cost of labor.

For instance, it can cost at least $2,000 to replace an existing cooling system for a 700-square-foot home with a 1.5-ton unit that has a capacity of 18,000 BTUs per hour. BTUs or British thermal units refer to the required energy to provide cooling or heating a pound of water per Fahrenheit. The actual BTUs that you need for your home will also depend on the total square footage of your house.

Repair or Replace?

Homeowners should consider the lifespan of their current units before thinking about a replacement. A well-maintained unit should last for up to 20 years, so it makes sense to repair a relatively new system when it’s broken. However, repairs are more cost-efficient if the cost doesn’t exceed 50% of the total price for a new installation.

In other words, you shouldn’t spend more than $500 to fix a central air-conditioning unit for a 700-square-foot home. The same applies to a house with an area between 1,000 and 1,200 square feet, although the new unit should have at least 21,000 BTUs. The place where you live will also affect the total bill. If you live in Utah, the cost of air-conditioning repair in Salt Lake City can be more expensive than in suburban areas because of the higher cost of living. But you can try to negotiate a fair rate especially when the warranty already lapsed for the appliance.

In case a replacement seems better to reduce your electric bill, you should consider spending 20% more for some hidden charges. These unexpected costs often arise when you need to fix some problems before the installation.

The Cost of Hidden Charges

man checking a centralized air conditioner

Some of the standard hidden charges include resealing doors and windows, fixing damaged drywall, and replacing ducts or vents. These problems might only become noticeable as soon as a professional arrives to inspect your HVAC unit. An older house might also need a new electrical system, particularly if the owner wants to install a modern central system.

The power grid of an older home might not be enough to support a new unit’s higher demand for electricity. Despite these surprise charges, there are some ways to offset the additional expenses. You can purchase an Energy Star-rated air conditioner to qualify for a federal tax credit worth up to $500. This might cause you to spend more upfront, but consider the long-term benefits of paying for a lower utility bill.

In the end, once you decide on replacing your central air conditioner, you should ask for quotes from at least three different HVAC installers for better price comparison. It’s better to hire a professional who lives within your area, as some contractors could charge a higher rate if you live far away from their serviced areas. As much as possible, you should schedule the installation during spring or fall when some contractors charge a lower price.