How Much Does a New HVAC System Cost?

Replacing your HVAC system can cost several thousand dollars, but you may be able to save money through rebates and tax credits.

A.M. Steinbach
Written byA.M. Steinbach
A.M. Steinbach
A.M. SteinbachInsurance Writer
  • Full-time writer for 5+ years

  • Two-time Emmy Award nominee

A Harvard graduate, Mark has worked as a freelance personal finance and tech writer. He’s also written for Saturday Night Live.

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Courtney Mikulski
Courtney MikulskiSenior Editor, Auto
  • 3+ years producing insurance and personal finance content

  • Main architect of the Insurify Quality Score

Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.

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Updated May 3, 2024

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A new HVAC system can cost up to $7,500 on average, depending on your home’s size, structure, and local climate. Prices also vary based on system type, system brand, and the HVAC contractors you work with.[1]

A new HVAC system offers several benefits, including improved air quality in your home, more comfortable temperature levels, efficient energy consumption, and lower energy bills. Here are some factors that influence HVAC prices and when you need to replace your system.

New HVAC system: Costs and benefits

Investing in a new HVAC system can save you money and make your home more comfortable — but it does come with up-front costs. The average cost of a new HVAC system is $5,000 to $12,500, though prices vary based on your home and the system you buy.[1] A new system for your home can improve your family’s quality of life in various ways, including:[2]

  • Better air quality: An effective HVAC system draws dust, mold, and other pollutants out of the air, which is particularly beneficial to people with respiratory conditions like asthma.

  • Comfortable temperature levels: Old HVAC systems can struggle to adequately heat or cool homes and may lead to inconsistent temperatures across different rooms.

  • Improved safety: A functional HVAC system lowers the risk of certain household dangers, such as fire and carbon monoxide leaks.

  • Reduced carbon footprint: HVAC systems require a lot of energy to heat and cool your home. Newer systems use energy more efficiently when installed correctly.

  • Lower energy bills: A new HVAC system runs more efficiently, which can reduce your energy bill.

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Factors that affect HVAC replacement costs

How much you pay for your new HVAC system can vary broadly depending on the needs of your home. Below are some factors that influence the overall cost of purchasing and installing a new HVAC system. 

Home features

Large homes require more energy for heating and cooling than small homes. So, naturally, large homes require more powerful HVAC systems, which cost more to install. Your home’s structure can also affect HVAC system costs. Your roof shape, window type, and insulation level can affect HVAC costs. Homes with denser insulation are typically more energy-efficient and can reduce energy usage and costs.

HVAC system specifics

HVAC costs can vary by brand and type. For example, you can choose between a ductless or ducted system, which vary in price. Your home might already have ductwork, which will make it cheaper to install a new ducted system. You can also pay extra for additional features, like programmable thermostats and heat pumps.

Budget brands can help you save on equipment and installation, while more expensive brands typically have more powerful features and high-end service. Shop around and compare estimates for different HVAC systems to find the best price.

SEER value

Every air conditioner model has a seasonal energy-efficiency ratio, or SEER, which measures how efficiently the unit cools a given space. A higher SEER means the system cools very efficiently. These systems tend to be more expensive but will lower your energy bills over the long term and are often the more financially friendly investment.[3]

Your location

Homes in warm climates have greater cooling needs, while homes in cold climates require stronger heating equipment. Make sure you buy the right system for your climate, as the wrong system will heat less efficiently, resulting in higher energy costs.

Project difficulty

If your home needs new ductwork or you’re making upgrades from your previous system, your HVAC replacement costs may be higher. Additions like a new thermostat, air filtration systems, and new insulation can increase the project costs. But if you’re simply switching out the unit, your costs can be more manageable.[1]

Learn More: How Much Home Insurance Do You Need?

Learn More: How Much Home Insurance Do You Need?

How to know if you need to replace your HVAC system

Replacing your heating and cooling system can significantly improve your home’s air quality, comfort level, and energy efficiency. Here are a few signs that it might be time to replace your HVAC system:

  • Higher energy bills: Your system may have duct problems or malfunctioning equipment if you notice higher energy bills.

  • Uncomfortable air quality: Sudden changes in air quality or temperature might mean something is wrong with your HVAC system. Excess dust around the home may indicate a leaky duct, which might mean it’s time for an equipment tune-up.[4]

  • Loud noises: You should schedule an HVAC system inspection if it’s making unfamiliar noises, as this could indicate functional issues with your equipment.

  • Leaks: System leakage is a telltale sign that something is wrong with your HVAC unit. Failing to address this issue means your AC unit may be running low on refrigerant, which can lead to greater problems in the future.[5]

  • Age-related wear and tear: Even high-quality HVAC systems installed by expert teams eventually wear down, and different systems have varying life spans. For instance, an AC system typically lasts 15 years, while gas and electric heaters usually last 13 years.[6]

Check Out: Home Warranty vs. Home Insurance

Check Out: Home Warranty vs. Home Insurance

How to save money on HVAC installation

You can save on HVAC installation when you understand your home’s needs, research different systems, and take the time to shop around. Here are some strategies for reducing installation costs. 

Accurately measure your home’s size

Ask your contractor to do a load calculation to determine your home’s cooling capacity. If you don’t measure accurately and install an oversized system, you’ll end up overpaying and won’t properly cool your home. The right size system for your home ensures cost and energy efficiency.[3]

Compare quotes from different companies

Ask friends or search online for HVAC companies in your area. A team will usually come in and measure your home and assess any existing ductwork to determine a quote.[3] Compare quotes side by side, and don’t immediately buy the cheapest option without first reading customer reviews and asking for references.

Get your project proposal in writing

HVAC installation can often run behind schedule and over budget. Set clear terms with your contractor regarding costs, the project timeline, and warranty information to avoid costly extensions. You can also ask the contractors for calculations from your home inspection to ensure the terms of the project are reasonable.

Look for special offers

Installing an HVAC system is an expensive process, so it’s important to seek out any possible discounts. For instance, customers can use Energy Star’s rebate finder to help them get money back for their purchases.

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Will home insurance cover a new HVAC system?

Your home insurance policy won’t cover a new HVAC system unless it has damage from a covered loss. So if your HVAC system isn’t working due to wear and tear, poor maintenance, or malfunction not related to a claim, you have to pay for repairs or replacement out of pocket.

If you want a policy that covers HVAC system costs, consider a home warranty. The best home warranty companies offer affordable plans that can cover HVAC and other major systems in your home.

HVAC system cost FAQs

Find answers to some of the most frequently asked questions about HVAC systems.

  • How long do HVAC systems last?

    Different HVAC components have varying lifespans. Air conditioners, heat pumps, and electric steam boilers typically last 10 to 15 years, while furnaces last about 18 years. ASHRAE sets many guidelines in the HVAC industry and offers an equipment life expectancy chart to help customers understand how long their equipment will last.

  • How often should you replace your HVAC system?

    Though some systems may last longer, you should consider replacing your existing HVAC system after 10 years unless signs of dysfunction arise earlier. Strange noises from your system, leaks, inconsistent temperature regulation, and humidity in your home might indicate that something is wrong with your HVAC system and it’s time to replace it.[5]

  • How do you change an HVAC filter?

    Homeowners should change their HVAC filter every three months, and potentially monthly during seasons of peak use. Turn off your system before changing the filter, then follow the instructions in your system manual, ensuring your replacement filter is the right size.[7]

  • Why are HVAC installs so expensive?

    HVAC installation is a complex process that requires the labor of highly trained experts. HVAC installation often calls for an initial home inspection, which adds to the labor costs. And prices can be even higher if your home needs new ductwork.[3] Find the best deal on HVAC installation by comparing quotes from several different brands and contractors.

  • Are there any tax credits available to offset HVAC installation costs?

    New federal income tax credits of up to $3,200 annually are available through the Inflation Reduction Act of 2022. These credits are available to homeowners who choose energy-efficient technology. These credits are available for homeowners to claim through 2032 when they make energy-efficiency home improvements.[8]

Sources

  1. Angi. "How Much Does HVAC Replacement Cost?."
  2. American Industrial Hygiene Association. "Indoor Air Quality."
  3. Consumer Reports. "Central Air Conditioning."
  4. U.S. Department of Energy. "Maintaining Your Air Conditioner."
  5. U.S. Department of Energy. "Common Air Conditioner Problems."
  6. Natural Handyman. "ASHRAE Equipment Life Expectancy chart."
  7. Consumer Reports. "How Often Do You Need to Change the Air Filter on Your Heating and Cooling Systems?."
  8. Energy Star. "Federal Tax Credits for Energy Efficiency."
A.M. Steinbach
A.M. SteinbachInsurance Writer

A.M. is a Brooklyn-based writer, editor, and content marketing strategist who's worked with major brands in insurance, tech, finance, and healthcare. He also contributes to The Average Joe, a personal finance newsletter that reaches over 250,000 daily readers. Since 2019, he's written for Insurify, breaking down a diverse range of insurance topics into crisp, readable prose.

Courtney Mikulski
Edited byCourtney MikulskiSenior Editor, Auto
Courtney Mikulski
Courtney MikulskiSenior Editor, Auto
  • 3+ years producing insurance and personal finance content

  • Main architect of the Insurify Quality Score

Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.

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