Advocates warn of furnace or AC leasing

Added: 2026-05-05

[00:00:00]I've been doing this for 30 years and I'm telling you these are the worst deals I've ever seen for consumers.

[00:00:06]>> Those words don't come lightly from Consumers' Checkbook executive editor Kevin Brasler. In a recent article for his nonprofit which researches local services, he called it the expensive HVAC lease that never dies.

[00:00:19]>> There's more than one company doing this.

[00:00:20]>> Looking into a relatively new way some contractors offer consumers to pay for a new furnace or AC.

[00:00:26]>> A lot of people who sign on to these leases apparently have no idea that that's what they're getting, that it's a lease, that the homeowner won't own this equipment.

[00:00:36]>> Here's how it works. Brasler says contractors sell it as a membership program. No money down, only monthly payments, free maintenance, but at the end of the day it's a lease or a rental, not a financing plan for the homeowner.

[00:00:48]>> They'll never own it unless they agree to pay the company a big termination fee essentially.

[00:00:54]>> And even at the end of the term, the homeowner has to decide, do they want to keep paying that monthly payment or pay a ton to actually buy the equipment?

[00:01:03]>> If you want to keep that equipment, you still don't own it after 10 years of making payments. And not just payments for the original purchase price, but interest payments on top of that, you still don't own your air conditioner or furnace or water heater. The company that installed it continues to own it.

[00:01:17]Take this agreement from the homeowner he profiled in Ohio. After the 10-year contract is done, that homeowner would have to pay 61% of the original cost to buy himself out of the contract and own the system. And if he doesn't abide by the terms of that agreement, the contract says the company can remotely disable it. I can't imagine any situation where a homeowner would benefit from one of these HVAC equipment leases.

[00:01:44]So Brasler says if you think you can pay it off relatively quickly, consider a credit card with a low interest rate or a home equity line of credit. And if you've signed one of these agreements, I'd love to hear from you to hear what you think the terms are and if they are what you think they are. Steve on your side at 9news.com. I'm Steve Stenger, Steve on your side, 9 News.

[00:02:05]Feels predatory. It is. And and Steve, you know, you've always said, um do your homework, get more estimates than one.

[00:02:12]>> Always three. I always three. Hear from at least three three different companies to do the work, which is a tough piece of advice when, you know, it's 100° outside and your air conditioner's not working.

[00:02:21]>> need to you need to get it done. I think that's that's why a lot of people don't read the the you know, the small print.

[00:02:26]Yeah, the this was quite a bit of fine print. It was all on one page, but it was in size, you know, like five font. Uh and so taking the time to read through it line by line and make sure it was all there.

[00:02:37]Uh plus it also follows the people who own the home. So think about trying it's a lien on your home. It's it's it's in the property records. So if you try to sell your house, it actually says in the contract you have to get the buyer to agree to pay that payment or you have to pay the early termination fee, which is a percentage of what it originally cost to get out of it. So it's just >> impact.

[00:02:57]>> Yeah, it's >> That's a huge impact.

[00:02:59]>> It's a lot to think of. And Kevin says he finds this a lot when like a senior will pass away and their kids are handling the estate, they'll find this lease and then they've got to deal with that as they're kind of settling the finances with the estate. Oh, so sad.

[00:03:11]Yeah.

[00:03:11]>> All right, thank you. Mhm.