Repair vs. Replace: How to Know When Your HVAC System Needs Replacement

Your HVAC technician just delivered bad news: your system needs a major repair. The quote is $1,500-$3,000 and you're wondering whether to repair the existing system or put that money toward a new one. This decision depends on your system's age, the nature of the repair, efficiency comparison, and total cost of ownership going forward.

The Age Factor

Average HVAC system lifespan: air conditioners last 15-20 years, heat pumps last 12-15 years, gas furnaces last 15-25 years, and boilers last 20-30 years. As a general rule, if a major repair costs more than 50% of a new system AND your current system is past 75% of its expected lifespan, replacement is the better investment. A $2,000 repair on a 16-year-old AC (80% of its 20-year lifespan) is poor value. The same repair on an 8-year-old system makes sense.

The $5,000 Rule

Multiply the repair cost by the system's age. If the result exceeds $5,000, replace. Examples: a $400 repair on a 10-year-old system = $4,000, so repair. A $500 repair on a 12-year-old system = $6,000, so replace. A $1,500 repair on a 5-year-old system = $7,500 - this one's borderline, but since the system is young, repair is likely still worthwhile if the repair addresses a non-recurring issue.

Red Flags That Say "Replace"

Refrigerant-related issues on older systems. If your AC or heat pump uses R-22 refrigerant (systems manufactured before 2010), any refrigerant-related repair is a strong signal to replace. R-22 has been phased out and costs $50-$150+ per pound - a full recharge can cost $600-$1,500. And if it leaked once, it will likely leak again.

Cracked heat exchanger. A cracked heat exchanger in a gas furnace is a safety hazard (risk of carbon monoxide leak) and almost always warrants immediate replacement of the furnace. Repair is technically possible but rarely cost-effective or advisable given the safety implications.

Compressor failure on systems over 10 years old. Replacing a compressor costs $2,000-$3,500. On a system over 10 years old, other components are also aging. Investing $3,000 in a new compressor for a 14-year-old system that may need a new blower motor ($500) and evaporator coil ($1,500) within the next few years doesn't make financial sense.

Increasing repair frequency. If your system has needed repairs in two or more consecutive years, it's entering its end-of-life period. Each individual repair may seem affordable, but the cumulative cost of annual $300-$800 repairs quickly approaches replacement cost.

When Repair Makes Sense

Repair your existing system if the system is under 10 years old and the repair is under $1,000, the repair addresses a one-time issue (bad capacitor, failed relay, clogged drain) rather than a worn-out major component, the system is still running efficiently (energy bills haven't increased significantly), or the system uses modern refrigerant (R-410A) and parts are readily available.

The Efficiency Argument for Replacement

A 15-year-old AC likely runs at 10-12 SEER (original rating, degraded further by age). A new system at 16-20 SEER2 uses 25-40% less electricity for the same cooling output. If your annual cooling cost is $1,200 on the old system, a new system saves $300-$480/year in energy alone. Over 15 years, that's $4,500-$7,200 in energy savings - often covering most of the new system's cost. Add in tax credits and rebates, and the replacement pays for itself faster than most people expect.