New Furnace Prices:
How to Compare Apples with Apples

Furnace prices greatly vary. How do you find the best price on a new furnace?

Before you start to worry about the price tag on your new furnace itself, it pays to ask yourself three basic questions about your home heating system as it is and the changes you wish to make:

1. What kind of fuel will my new furnace burn? If you have an old, octopus-type forced air furnace or an outdated oil-burning furnace you may want to investigate converting your home heating system to natural gas, which is likely to save you money in the long run even if you have higher initial conversion costs to switch to the new fuel. Or if you have ready access to wood that you can burn inexpensively or free, you may want to investigate a wood-burning furnace or an add-on wood burner to keep your fuel costs down. Geothermal heat pumps tap the earth’s own renewable energy but are generally expensive to install on existing construction. Even so, check all your fuel options and get several estimates before just replacing the old furnace with a new version that uses the same fuel. If fuel is your highest cost, now is the time to rethink that first.
2. Is the furnace the right size for my home? Installing a furnace that is too large for your home doesn’t keep you warmer, it just wastes energy. Get estimates from several HVAC contractors and make sure they factor in the square footage of your home when recommending a replacement furnace.
3. How efficient is the furnace and how long will it take to recover the installation and replacement costs? You might think that higher efficiency gets you the best price on a new furance over the long run, but that might not be true in every case. If it takes you decades to recoup the added cost of a high efficiency model, you’re probably better off to buy a slightly less efficient furnace. As long as the efficiency is 80% or better, you’ll still save money, and you’ll see those savings quicker, especially if you have to use financing to buy.

Once you decide what type and what size of furnace to install in your home, you can start to think about getting the best new furnace price. New natural gas furnaces with an efficiency rating of at least 90% start at around $3,000 for just the furnace, although your total costs can run into five figures easily when you include installation, especially if you have to run a new gas line to your home.

If you can afford it and if you plan to stay in your home at least 5-10 years, a multi-stage high-efficiency gas furnace will keep you more comfortable than a traditional gas furnace and save on energy use. Multi-stage gas furnaces usually come with an efficiency rating of 95-97% and start at $3500 for the furnace alone. Unlike an ordinary gas furnace which constantly cycles on and off, three-stage furnaces use variable speed blowers that maintain a constant indoor temperature.

If you plan to stay in your home less than 5 years or if you are cash-strapped and absolutely have to replace your furnace right now, the best price on a new furnace will probably depend on you choosing a less efficient model. Gas furnaces with an 80% efficiency rating start at around $2000 for the furnace alone and will do a decent job of heating your home affordably without breaking the bank.

Most people don’t choose between gas and oil furnaces; if gas isn’t available, oil is the next best choice in many cases. Oil furnaces don’t come with the high-efficiency ratings of natural gas furnaces because oil creates moisture problems in the chimney at efficiency ratings over 87%. When replacing an oil furnace, look for a model between 85-87% efficiency for the best new furnace price. Oil furnaces in the 85-87% efficiency range start at around $2000 for the furnace only.

Finally, if you can’t install a natural gas furnace or a wood burning furnace, you may want to look into LP gas, also known as propane. Propane is stored in an outdoor tank and is basically the same fuel you use to fire up your gas grill. LP gas is less expensive than oil and the price is not so volatile. LP also burns much cleaner with none of the smell that often accompanies oil heat. Propane furnaces start at around $1300 not including installation.

Whichever type of home heating system you decide to install, getting the best price on your new furnace will almost certainly involve getting multiple estimates from multiple HVAC contractors. Remember that there is no such thing as a ‘free estimate’. When a contractor comes to your home to estimate your costs, he is actually coming to close a sale.

Be prepared for this and be firm. Do not make any decision until you’ve gotten all the estimates you need and have looked over all your options thoroughly, then proceed with confidence, knowing you have done all you can to get the best new furnace price possible.