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Renting vs buying

Reduce the overall costs of operating your hot water tank by choosing a smart solution of either buying or renting Hot water heaters from Toronto Heating and Air Conditioning Contractor.

There are many advantages and disadvantages to buying or renting your hot water tank but with all the information out there trying to understand what is best for you may not be easy. So I have broken down the pros and cons for you so that you can make an informed decision to which is best for you – renting or buying your hot water tank.

If you are looking only at the price – then buying is the logical way to go if you plan on living in your house for the next 6 years or more. For example – most standard hot water tanks last approximately 10 to 12 years on average. So based on the low end (10 years) here is the differential.

$24 per month x 12 months = $288.00 per year times 10 years = $2,880.00

New buying price average* (installed) electric $700 to $900
New buying price average* (installed) gas natural draft $900 to $1400
New buying price average* (installed) gas power vent $1600 to $2000

Even if you buy a top of the line $2,000 power vent gas hot water tank you still have $880.00 in your pocket IF you buy instead of rent.

The only exception to this is based on how long you plan on living in your current home. If you only plan on living there for only a few more years then you can certainly save money by renting.

2 years paying $288 per year = $576.00
3 years paying $288 per year = $864.00 (more than an electric HWT purchase)
4 years paying $288 per year = $1152.00 (more than a gas HWT purchase)
5 years paying $288 per year = $1440.00 (more than a power vent gas HWT purchase)
As you can see, it really doesn't take very many years to more than pay for a new hot water tank in full – after those first few years it just doesn't make sense to rent.

Is renting your New water Tank is less preferable than rather buying it outright?

Consumers love feeling secure in their purchases, but too many times they get taken for a financial ride that will keep them paying for years to come. Storage type water heaters are the most common in Canadian houses. The company renting the tank to you gets rich while we end up retiring broke – all those years of paying could have been avoided and that $24 a month payments could be going to your retirement or vacation account! Wouldn't you rather have the extra money sitting in YOUR bank account earning you interest rather than making the utility companies richer?

Through mass purchases many suppliers are often able to provide reasonably priced and energy-efficient hot water heaters. Even to know whether renting or leasing is a better option in your location, you can check with your utility or energy supplier.

Please note that not all companies are the same when it comes to renting hot water tanks program and that there are a few companies out there who do actually offer you value for your money, but they are not easy to find. It requires that each of us do our homework to discover the real value of what is being offered.

Also note that the cheapest price may not always be the best price. If you have to keep replacing your hot water tank every 4 to 5 years then where is the money savings? Here are the things to look for when buying or renting a hot water tank:

  • What brand and model of hot water tank is being offered?
  • Does the price include installation?
  • Does the price include the now mandatory in Ontario "mixing valve"?
  • Does the installer offer any guarantees on their installation?
  • Is the installer licensed to install these tanks or is he just a handyman (please note that using a handy man can potentially negate your home owners insurance policy IF damage occurs due to the improperly installed water heater).
  • What guarantees are offered (if any)?
  • Is the guaranty "pro-rated"? A pro-rated guaranty works just like your car value, buy a new car and drive it off the lot and it already depreciates in value – a pro-rated warranty no matter how long it is will not cover the costs of replacing the tank only a small portion of the tank only value (usually excludes installation as well). If the warranty is only going to cover $100 of the costs after only 2 years then what value is that warranty if you have to dish out the balance?
Nothing in life is simple – but you can certainly take simple steps to insuring that you are getting value for your hard earned money. Please note that you may have to pay a bit more up front to get the security and warranties you want, but in the long run it will save you serious money.

Be sure to check out my other articles for more ways to save money and avoid damaging your most precious asset, your home!

*Note: average buying prices are based on Toronto Ontario Canada pricing and may not accurately reflect the prices in your country or region.

**Warranties differ from suppliers and companies, read the fine print to understand what those differences are. Some extended warranties are worth the additional costs, most are not.

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