Skip to main content
True Trade Path

Comparison · Free

Repair or Replace Calculator

Compare the economics of repairing a failing system against replacing it outright.

The system

A cracked heat exchanger ends the conversation — that is a carbon monoxide hazard, not a repair decision.

years

Typical service life is 15–20 years, with 18 as the planning figure.

The two prices
$

The repair in front of you, parts and labor.

$

National range is $3,500–$6,500. Replace this with your own quote when you have one.

$/yr

Set this to zero for anything that does not consume energy, or if you are replacing like for like.

The decision

Replace it

The repair is 18.0% of replacement cost on a system with 2.0 years of expected life left.
Repair, per year$900 spread over the 3.0 years it buys
$300/yr
Replace, per year$278/yr over 18 years, less $180 of energy saving
$98/yr
The 50% rule saysThe repair is 18.0% of replacement cost
Repair
Life consumed16 years against a 18-year expected life
88.9%
Total cost of each path, including the energy difference
HorizonRepair nowReplace nowDifference
Next 5 years$6,440$5,000$1,440 more to repair
Next 10 years$6,440$5,000$1,440 more to repair
Next 15 years$6,440$5,000$1,440 more to repair

The 50% rule and the cost-per-year test disagree here

The 50% rule looks only at the two prices. It cannot see that this system is 16 years old and that the repair realistically buys 3.0 more years. Cost per remaining year is the better test, because it is the only one that prices what you are actually getting for the money.

What this assumes

  • Applies a cost-per-remaining-year comparison rather than a single rule of thumb.
  • Typical service lives are drawn from manufacturer and industry association averages.
  • Efficiency savings assume the national average energy price unless you enter your own.

Understanding the result

The 50% rule, and its limits

The common guidance is to replace when a repair costs more than half of replacement. It is a reasonable starting point but ignores remaining life. A $700 repair on a 4-year-old furnace and the same repair on a 19-year-old furnace are completely different decisions.

Cost per remaining year is the better test

Divide the repair cost by the years it realistically buys you, and compare that with replacement cost divided by the new unit's expected life. If the repair costs more per year than the replacement does, replace. This handles the age question that percentage rules ignore.

Count the second repair

A system failing in one place at end of life rarely stops there. When a unit is within a few years of its expected life, price the repair as the first of two or three, because that is usually what happens.

Efficiency upgrades change the replacement math

A new 95% AFUE furnace saves $200 to $400 per year over an 80% unit. A SEER 16 AC saves $150 to $300 per year over SEER 10. Federal tax credits of up to $2,000 for heat pumps and $600 for furnaces reduce replacement cost and shorten the payback period.

How the math works

Enter equipment age, repair quote, replacement quote, expected remaining life if repaired, and optional energy savings. The tool applies the common 5,000 rule (age × repair cost) and simple payback on replacement premium to suggest repair, replace, or borderline — with plain-language interpretation, not a mandate.

Where to find each input

  • Equipment age — from nameplate, invoice, or home inspection report
  • Repair quote — written estimate for the failing part or system
  • Replacement quote — like-for-like or upgrade, installed
  • Remaining life if repaired — technician’s opinion (often 2–5 years on major components)
  • Energy delta — optional; utility bill or SEER/AFUE labels for HVAC

Worked examples

12-year AC, $2,800 compressor repair

Replacement $7,500. Age 12, repair $2,800 → product 33,600 (5,000 rule).

5,000 rule strongly favors replace. Payback on efficiency gains adds weight if upgrading SEER. Borderline only if replacement quote includes full duct rework you do not need.

5-year water heater, $450 element and thermostat

Replacement $1,800. Age 5, repair $450 → product 2,250.

Repair wins on rule of thumb. Replace only if tank shows rust, wrong size, or recurring leaks.

18-year furnace, $1,100 heat exchanger

Replacement $5,200. Age 18, repair $1,100 → product 19,800.

Replace recommended — heat exchanger failure often indicates wider corrosion. Safety and efficiency gains on new AFUE unit reinforce replacement.

What this does not include

  • Carbon or refrigerant phase-out regulatory fines
  • Insurance claim coordination
  • Financing cost of replacement
  • Home value appraisal impact

Regional adjustment

Replacement install costs vary by metro; repair parts are more uniform nationally. If replacement quotes differ by 25%+ between cities, re-enter local numbers from your cost guide before deciding.

Accuracy and references

5,000 rule widely cited by ACCA and consumer energy programs as a heuristic, not code. HVAC and water heater ranges cross-check True Trade Path cost guides and ENERGY STAR replacement savings tables.

Counterpart bridge

Pricing this on the contractor side?

This page interprets quotes and budgets from the buyer’s chair. The matching pro tool uses the same scope logic to build a defensible price.

Open Job Profitability Analyzer

For trade owners

Pricing this job as a contractor?

Homeowners see national ranges on this page. If you are building the estimate, use the same scope assumptions — then price to burdened labor, overhead recovery and a real margin.

We never sell leads. Read the promise.

Find a licensed pro

When you are ready to hire for repair or replace calculator, start with licence verification — not with whoever answered first.

No paid placement

Rankings are never sold. Order reflects verification depth and relevance, not payment.
Browse verified listingsHow to hire hvac technicianFind a pro by symptomCheck a quote

Verify any licence yourself before signing: state licensing hub.

Common questions

At what age should I replace my furnace?
Most furnaces run 15 to 20 years. Past 15, a major repair such as a heat exchanger or control board usually favors replacement, particularly if efficiency gains and available rebates are factored in.
Should I repair or replace my water heater?
Replace if the tank is over 10 years old and needs any repair over $200, or if you see rust in the water or rumbling sounds. Repair a unit under 8 years old with a failed thermocouple ($150 to $250) or heating element ($200 to $300). Tankless units: repair under 10 years, replace after.
Should I repair or replace my AC unit?
Replace if the unit is over 12 years old and the repair exceeds $500, or if it uses R-22 refrigerant (phased out). Repair a unit under 10 years with a failed capacitor ($150 to $300) or contactor ($150 to $250). A new SEER 16 unit saves $200 to $400 per year versus a SEER 10 unit.
What is the 50 percent rule for HVAC?
Replace when the repair cost exceeds 50% of a new unit's installed price. A $2,500 repair on a 15-year-old furnace when replacement costs $5,000 triggers the rule. But also consider age: the 50% rule on a 5-year-old unit is very different from a 19-year-old unit.
Should I repair or replace my roof?
Repair if the roof is under 15 years old and damage is localized (a few missing shingles, one flashing failure). Replace if the roof is over 20 years old, has widespread curling or granule loss, or has been repaired multiple times. A patch on a 22-year-old roof is a temporary fix.
When should I replace instead of repair an appliance?
Replace when repair cost exceeds 50% of replacement price and the appliance is past 50% of its expected life. A $400 repair on a 12-year-old dishwasher (expected life 10 years) favors replacement at $600 to $800. A $150 repair on a 4-year-old unit favors repair.
Is it worth repairing a 20 year old furnace?
Generally no for major repairs. A 20-year-old furnace at 80% efficiency costs $200 to $400 more per year to operate than a new 95% unit. A $1,500 heat exchanger repair on a unit with 0 to 3 years of remaining life is poor economics. Replace and capture efficiency savings.
How do you decide repair vs replace?
Divide repair cost by remaining expected years of life. Divide replacement cost by new unit's expected life. If repair cost per remaining year exceeds replacement cost per year, replace. Example: $700 repair on a 12-year-old water heater (2 years left) = $350/year. $1,500 replacement (12 years) = $125/year. Replace.
Should I repair or replace my garbage disposal?
Replace. Disposals cost $80 to $250 for the unit plus $150 to $250 installation. Repair is rarely economical — a jammed unit can sometimes be cleared DIY, but a failed motor or seal means replacement. A 7-year-old disposal that jams repeatedly should be replaced.
When does repairing a car make more sense than replacing?
Repair when the cost is under 50% of the car's value and the repair buys 2+ years of reliable use. A $2,000 transmission on a car worth $8,000 with 100,000 miles favors repair. A $4,000 engine on a car worth $5,000 with 180,000 miles favors replacement.
What is the 5,000 rule?
Multiply equipment age by repair cost. If the product exceeds about $5,000, replacement is often the better economic choice for major components.
Does the rule apply to every appliance?
It is most used for HVAC, water heaters, and major appliances. Small parts (capacitors, valves) use simpler fix-if-cheap logic.
When should I repair despite a high score?
When replacement supply is backordered, you plan to sell soon, or the repair restores years of life with a written warranty on the part.
How do I estimate remaining life?
Ask the technician in writing. If they will not warrant the repair beyond 90 days, treat remaining life as short.
Should I include energy savings?
For HVAC and water heaters, yes when upgrading efficiency tiers. Payback = premium ÷ annual savings.
What about R-22 refrigerant systems?
Repair economics are poor; replacement is usually correct when the compressor or coil fails on R-22 legacy gear.
Is partial repair valid?
Yes for multi-zone systems if one zone fails — compare repair to replacing only that zone.
Do warranties change the math?
A free compressor under manufacturer warranty shifts repair cost toward parts-only labor — enter your out-of-pocket number.
How fast should I decide?
Safety issues (heat exchanger, gas leak, live electrical) decide immediately. Comfort economics can wait a few days for three quotes on replacement.
Can I repair now and replace later?
Sometimes, but paying for a major repair on a 15+ year unit often wastes money you will spend again on replacement within 2–3 years.

You may also need

The next decision usually follows directly from this one.

Related trades

Where to go next