Prices Explained

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the-negotiator

The typical contractor’s trip charge is at an all time low. Repair prices, on the other hand, are at all time highs. That’s why most contractors won’t tell you anything about their repair prices up front. Most won’t even tell you their hourly rate. Not even the Negotiator can get them to talk!

I take the opposite approach. I don’t advertise a low trip charge to get my foot in the door. Nor do I charge a horrendous repair fee once I’m through the door. I’m certainly not cheap, but I am fair and exceptionally transparent. See for yourself below.

The Trip Charge

The Total Price

Checkups

New Equipment


The Trip Charge

The minimum charge is $150. That covers travel within my service area and the first half hour on site. Most, but certainly not all, part failures on readily accessible furnaces or air conditioners can be diagnosed in the first 30 minutes.

Equipment that’s in an attic or on a roof can take longer than 30 minutes to diagnose. Locating Freon and water leaks or diagnosing an intermittent malfunction can also take longer. There are other examples. The additional time costs $150 per full hour.

The teaser rate trip charge offered by some contractors is certainly appealing. However, it’s just not real. It’s actually a marketing strategy that’s frequently used to hide an exorbitant hourly rate. Click the arrow for a very interesting quote from that linked article.

A well-known HVAC consultant has this to say about trip charges:

People calling around comparing service rates will often use your trip charge as the only factor in comparing your service prices with that of your competition. In other words, a cut-rate trip charge could actually convey the message that your service rates are lower than your competitions’, when in reality, they may be considerably higher.

It’s funny. Your trip charge gives customers the least amount of information regarding your company, yet it influences their entire decision. Forget about the quality of your service. You could be sending people out on a prison work release program to do the work. However, they will never know it, because they based their entire decision on your trip charge.

Flat rate pricing has swept the trades for one simple reason: Contractors wanted to raise prices well beyond reason. Flat rate contractors lose money on the trip charge so as to appear cheap. Many of them make it up on the repair by charging $300 per hour or more.

In my experience there’s no such thing as a contractor who’s cheap and good. Cheap trip charges are a trap. The promise of no trip charge with repair is a false promise. And flat rate pricing is designed to hide the costly truth.

The Total Price

After the diagnosis is made, I’ll estimate the total price based on the following formula. Though the estimate is usually accurate, it is just an estimate.

  • As previously stated, the trip charge is $150. That covers travel within my service area and the first 30 minutes on site.
  • After the first 30 minutes, labor costs $150 per hour. Time is rounded up in 5 minute increments. The prevailing labor rate is twice that.
  • The amount I charge for a part is roughly double the part’s wholesale cost. The exception is refrigerant, which is tripled. The industry as a whole charges a lot more.
  • Add together the trip charge, any subsequent labor and any parts used and you have the total price.
  • I can’t account for every possible cost with a simple formula. On rare occasion there may be an additional fee of some kind.

Every contractor has a time and materials formula of some kind. Yet I appear to be the only one who openly explains his labor rate and parts markup. Now why do you suppose that is?

Checkups

They’re sometimes called “tune-ups”. Generally speaking there isn’t much to tune up. “Checkup” is the best word for them. (Learn more here.) Checkups cost the same as other types of work, so their price is determined by the formula outlined above.

A checkup of a furnace or air conditioner may take an hour, so that might cost $225. To check both may take 1.5 hours, so that might cost $300. The most frequently recommended part replacement is that of capacitors. Replacing both might add around $110 to the bill.

New Equipment

These are ballpark numbers for a new split system installed in a moderately sized home in Contra Costa County.† They are just educated guesses. Don’t bother writing me or your congressman if my guesses are off. ;^)

  • An evaporator coil (cooling coil) by itself may cost between $1,500 and $3,000. It depends on the size of the coil, the difficulty in replacing it and who’s doing the work. The evaporator is attached to the furnace of a split system and is what actually cools the air.
  • An entry level furnace or R-410A (Puron) condenser (air conditioner) installed by a lowballer may cost around two grand. That’s just one or the other without the evaporator coil. The same installed by a pro who’s doing it right may cost around $3,500.*
  • An entry level furnace, air conditioner and cooling coil installed at the same time by a lowballer may cost six grand, depending on the size and difficulty of the installation. The same installed by a pro who’s doing it right may cost nine grand.*
  • A higher end furnace, air conditioner and cooling coil installed by a pro may cost eleven grand,* depending on the size and options. A Costmo or Home Chepot contractor typically charges two or three grand more than that.
  • To have a pro add air conditioning to an existing central heating system that doesn’t have it may cost six or seven grand.* If the main electrical panel needs to be upgraded to accommodate the air conditioner, that may cost an additional $1,500 to $2,000.
  • A new wire flex duct system from a lowballer may cost three or four grand, depending on the home’s size. The same installed by a pro may cost six grand or more.* As for a new sheet metal duct system, if you have to ask…

* That includes the legally required building permit. Most contractors skip the permit because that can save them $1,000 or more. Some cities have costly permits. Additionally, the state mandates that most duct systems be checked for leakage. If they leak too much, they have to be sealed.

† I am currently a repair-only contractor. Repairs require more brain and less brawn than installations, hence the preference. There is another contractor I trust to perform installations that I’ll refer upon request.