The Red-Tagged Furnace and a Second Opinion

Furnace, Air Conditioner, Water Heater - Buy, Rent, Finance, $0 Down

A case involving a major company and their consumer recently came to my attention.

The large company provided annual maintenance services to the consumer. This has been the case for over a decade. Recently, the company pressed for an appointment and indicated to the consumer “you are already paying for this service”. Consequently, the consumer agreed.

Within 30 minutes of their arrival, the large company’s representative had “red-tagged” the furnace and called it in to the local supplier of gas in order to terminate the continued gas delivery. The consumer went the best part of the week without a furnace, which was now inoperable.

A sales representative of the company came out to meet with the consumer. The meeting lasted 60 minutes. You would naturally think that the conversation would have focused on the need for a replacement furnace. It didn’t. Seventy percent of the time was directed to the consumer’s air conditioner. The company wanted to offer a deal, replace both at the same time at a reduced, preferable guaranteed price. After applying and qualifying for several $400.00 discounts, the bottom line was $13,000.00 plus HST for both units, delivered and installed. For just the furnace alone, it would be $8,600.00 plus HST.

As well, there was another opportunity just in case the consumer for was short of cash. No payments whatsoever for 6 months. The company would rent the unit to the consumer, and maintain it under the maintenance contract. How good was that! Nothing really could be much better than that!

Well, with respect to the rental contract, there was just one kicker and that was the “payout price” if the consumer decided to move. What was the price? Basically $26,000.00, if the rental contract ended up being terminated early. Yes, there are lots of similar situations reported on the news regularly.

Being cautious, the sales representative left. Leaving only his business card behind. What unit, exact prices, brochures of the furnace choices…. Nothing… just a business card.

What did the consumer choose to do?

The consumer in this case decided to obtain a second opinion.

A competitor who offered the exact same furnaces and air conditioning units, left copies of all pricing, noted up with calculations of the HST, brochures, model numbers, and their business card.

They focused on the replacement of the furnace. The top end Carrier model was $4,600.00 (HST included) delivered and installed. They said “wait” with respect to the air conditioner. There is still plenty of life in that one!

The larger company offered a second tier Carrier model.

So, the bottom line:

  • $4,600.00 for the Top Line Carrier furnace (competitor)
  • $8,600.00 plus HST for Second Level Carrier furnace (the large company).
  • That’s almost half price!

Obviously, it’s worth a phone call to a competitor, if someone “red-tags” your furnace.

Brian Madigan LL.B., Broker

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