HVAC Financing is a SCAM!

HVAC financing is not what you think. Before you finance a new air conditioner, you are going to want to check out this video.
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[@Love2Cruise]

How we paid for our new HVAC: credit cards. Wife and I each applied for new cards that offered 0% introductory rate for 12 months. On top of that, each card gives a sign-up bonus of 90k reward points after spending the required amount in 3 months. We get 0% financing for 12 months, points worth at least $1800 in value (if used for statement credit, more if we redeem the points elsewhere), and the bank gets to collect credit card interchange fee. Win-win-win. Edit: These were no annual fee cards, too!

[@bastienclarke1810]

Which cards did you go with?

[@Love2Cruise]

@@bastienclarke1810 Chase Ink Business Cash. At the time Chase had $900 cash back (90k Ultimate Rewards points if you have other Chase UR point cards) after spending $5000 within 3 months. That offer had expired by now.

[@gjallarhorne9610]

I would also note that if a customer uses a Carrier finance option (Like Wells Fargo) with 0% interest, they 1: Will pay upwards of 28.99% interest after the promotion period ends (Ex: 12months or 36 months), and 2: if an install is lets say $9000, and you're approved for $10,000 credit line... that's mean your credit report will show 90% utilization on that credit line. This will hurt your credit score. :(

[@binfordtoolman5674]

This vid is spot-on. I got two estimates on replacing my central HVAC from local contractors. Both are equivalent systems from high-end mfr's. One of them offers 0% financing over 4 years. Their system was also $4K higher than the other estimate that DOES NOT offer 0%. The $4K difference represents prepaid interest at 33% over the system w/o 0% financing. Guess which one I'm going with?

[@AshleySpeaks4U]

You just use a lender if need be.

[@joshsansone5113]

Love the honesty. I have watched several videos in the last day or so and subbed. One of the larger HVAC contractors in my area often offer $5,000 cash back on new systems or get a free furnace with an AC purchase and the 0% until 2024. Although this is a little off topic of 0% nothing is FREE. If the company is giving you $5,000 back they are drastically over charging you because at that point from a company standpoint they are still making money to keep the business profitable. Also towards the end of the video you mentioned warranty and I have watched that video as well. My last contractor did not register my unit so the initial 5year warranty expired and I am missing out on the additional 5years of coverage.

[@DraithVicious]

Your videos have been a ton of help and really informative as someone currently in the market for a heat pump trying to get away from spending $900 each winter on oil heat.

[@diyhvacguy]

Keep these videos coming bro! Your video popped up on my home page so your doing something right! Cheers

[@atlasacrepair]

Thanks you DIY HVAC Guy! I enjoy your videos too!

[@compuwiz1937]

Every company I got a quote from said the price was the same for cash or financing, and some of them didn't offer 0%. So, I took the 0%. The company I used was $2000 cheaper than everyone else.

[@danlah1303]

I’ve taken some 0% for 12 month deals. But I’ve priced-shopped to know I’m not paying extra for it. From what I saw in the fine print, on the 0% for 12 month deals I suspect the finance companies are making their money from anyone who goes even 1 day past the 12 month mark and charging 15-20% interest.

[@jaredlowe3927]

I had same experience. I chalk it up also to the size of the company you deal with.

[@edwardluth7740]

Just don’t ever be late on a payment. I hate usery. It’s sinful.

[@wolfshanze5980]

This is how car dealerships work with their preferred finance companies... use your own bank!

[@kevinandrewsphoto]

We use GreenSky who requires dealer fees on our 0% interest. But our package systems don’t change at all. Our company eats the cost of the dealer fees. We don’t add on. Other companies in my Reno area take it out of the salesman’s commission if they do it. Thankfully we’re not doing that

[@scottdaniels5976]

In Fla, Wells Fargo offers a 0% home repair C/C for 18mos. then closes when it's paid off. Almost got ripped off on a Greensky loan 0% for 3yrs.....it was going to cost me additional $2800. Cancelled Contract before the 72hrs . Got a Zero percent Citibank Simply C/C for 21 months.

[@butchpemberton6143]

Yes, I too love your honesty and education for us layman

[@josefj1776]

We include the Fee but give a discount if they pay with cash or check.

[@wuldntuliktonoptb6861]

I ALWAYS tell customers when it’s a 18 month no interest I tell them pay off as much as you can before that interest kicks in. I sit the customer down and say how much can you pay a month. A lot of times they can pay it off almost in full by the end of the 18 months.

[@mrmaster8884]

Any Work For Canuck RED SEAL Techs. Ammonia and Freon, 30 yrs exp. Great Content!

[@Helthurian]

Idk how true this video is. Got 3 quotes for a HVAC system and the highest cash discount was $500 aka not much. The company with 0% financing was the cheapest option, the company with 9% interest was more expensive on the front and tail end.

[@Speed.Racer.5]

I think it's accurate for the most part. However, I just got a new HVAC and all the estimates were pretty close. I asked about a cash discount, but it wasn't an option. Ended up using the 12 month 0% promo

[@Nick-bc2lm]

I saw you were in Texas and showed some actual prices online. No one else does this that Ive seen so far. Then sadly, found out no service in Houston area.

[@ebony8114]

It’s like a mortgage. You pay the interest first, then start paying principal. With these loans, the “would be” interest figure/dollar amount is added to the “unit cost” (item is marked up) as the total before it’s presented to you so you think you will not/have not paid any interest.

[@Balticblue93]

My company uses WellsFargo 0% interest and we do not get any money back from them in payment. We get paid the invoice total billed. And nobody pays off the loans of 20k+ for a super high efficiency system. This isn’t a car dealership for a car. We do not play games. I do finance anyone who wants a new system but doesn’t have cash or credit card interest fees.

[@user-ch9he1my4k]

Basically what I found was if an installer doesn't have different prices depending on if you pay cash or not, you're going to end up overpaying and should walk away. That is, unless you want to pay for the financing fees

[@wuldntuliktonoptb6861]

My company charges you the same whether you pay it off in full day 1 or finance so looks like they take the loss.

[@0913749]

Great to know. I recently installed a fully new HVAC system in my home. I was offered a 60 month 0% interest with no penalties for early payment. My first question to the dealer/installer was, how does the finance company get paid? I was told, the finance company will charge 3% to the dealer from the amount of the loan approved not the amount of the project. The dealer did offer a 5% discount if the project was paid by personal funds upon completion and 100 percent satisfaction.

[@MrRjnr]

was the system Trane or American Standard by chance?

[@juanlopezhenriquez8990]

I live in Souther California Riverside County, I struggle with financing people because I know is way more expensive. I always tell them cash is king because I have high morals. My problem is this other companies are winning bids even when they are extremely higher due to the financing people don’t understand how much more they will spend. The other companies are out there billboards and growing because of that I am going to have to offer financing.

[@michaelrodgers435]

I don’t raise rates to compensate for my fee. I just pick my 0% options wisely to minimize my fees. Then let that 6-9% get cut from my margin. My customers get a decent term limit, I get money next day and it’s the bank’s problem.

[@thomasm9139]

Well I got a quote for a new system, 1 for a 14 SEER and another for a 16 SEER. They had no idea I was going to finance this unit. I went to my credit union and the interest rate was 10% and was considering the 14 SEER because of the price. Then the contractor offered 0% for a 16 SEER but not for the lower SEER models, this was a Carrier through Wells Fargo. I went with the 16 SEER because it was the same price either way cash or finance. Please tell me where I went wrong?

[@potranco999]

From what I’ve researched, the equipment cost difference between 14 and 16 SEER is not that much ($500 to $600) on a lower to midrange brand on a 3.5 ton unit. I suspect the installer quoted substantially more for the 16 SEER to cover the bank’s upfront fee. It seems most installers upsell higher SEER for a big mark-up. I just installed a new complete change out on my house with a 14 SEER and financed it myself with a credit card loan for two years at a fixed 6.99%. That ends up with about $500 in interest. My installer wanted $1,600 more for a 16 SEER. With a 15% energy saving, my “pay back” on the higher cost unit would have taken 6+ years (at zero interest/paying cash); not attractive enough for me.

[@thomasm9139]

@@potranco999 I hear you, but in my case the 16 SEER was the premium model where the 14 was the basic one.

[@davidlanier7006]

What about buying a new heatpump from your power company? Will they try to scam you too?

[@betl5982]

There's no such thing as free lunch.

[@picklerix6162]

There is no free lunch.

[@crand20033]

If you don't make the payment they won't come out and take your AC's back right?

[@BiologistRyan]

Im totally f'd living in MO. Need a new AC and Furnace lol. Mo... where in a day you can go from freezing to 90+.

[@FlushtheSystem]

Is this guy Nate Bargatze's brother?

[@MarandaX.]

If you meet certain income requirements your energy company is suppose to pay for you to get a new AC unit if your AC is not working or need to be replaced. Study the laws, that’s how I got my AC unit replaced for free from my energy provider

[@Net446]

Thanks for this info. How do I get started on this journey. Single lady here one income. Compressor on AC just clunked out. Trying to get ready for this Texas heat. Been quoted from 7800 to 20000. I really just want to replace the part and not the whole unit. My energy company is TXU. I'll give this a shot. Hope you're on to something here. Any tips for me, please reply. Thanks!

[@claytonslade2366]

This is how solar and windows works

[@tangoseal1]

HVAC is pure trash industry with scam artists galore. Just get your EPA 608 Type 2 license and do it yourself.

[@AshleySpeaks4U]

ALL companies that do installs offering financing IS A SCAM! They slap your home with leins right and left like duchebags over whatever. Get your OWN loan with your OWN lender should you need financing!

[@markharootunian775]

How about putting the system on a 0% credit card??

[@scottclark2413]

This is such a load of bs. I've been in the HVAC industry for 16 years, and I always offer 0% financing. I do not 'build it in' to my pricing. I simply offer the option because it is a great solution for certain customers. I only pay a small fee to the lender for this service, which means I'm willing to take a small hit on my bottom line to help a customer and to also keep my install crews busy. Everyone wins.

[@relaxingnature6766]

I e listened to a lot of Hvac advice, mostly for fun. But this topic is BS to me. If you are a customer, you need to look at 2 things 1. What equipment are you needing or should be getting? 2. What is a reasonable/fair price for the equipment you will be purchasing? Simple…as…that. Get MULTIPLE quotes from multiple companies, and maybe some references. If a company says “WE HAVE 0% interest on a new ac unit for $5000!!!” And they also price a no-loan unit for the same price…great! Perfect! People, get multiple quotes. I could care less about an “interest scam” What are you buying and for how much (and of course making sure it is done right)