Replacing a furnace is a big task with a big price tag. However, having a home warranty can go a long way toward minimizing furnace replacement costs.

Depending on the climate where you live, your furnace might be the most important appliance in your home. However, it’s a large and complicated piece of machinery, meaning that it is usually pricey to fix and even more expensive to replace entirely.

Furnaces are designed to last a long time, but they’ll still wear out over a decade or two. Replacing your home’s furnace can cost anywhere from $2,000 for smaller electric units to over $30,000 for high-tech solar models.

In this article, we’ll outline common furnace replacement costs and discuss other factors to consider when tackling this investment.

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How Do I Know When It’s Time to Replace My Furnace?

Ideally, you don’t want to wait until your furnace dies completely to replace it. This could easily happen in the middle of winter, leaving you without any way to heat your home.

Instead, keep a close eye on your furnace’s operation, both in terms of efficiency and cost.

Here are some signs that it might be time to think about replacement.

• The furnace needs to be repaired frequently, and repairs are become more expensive
• The furnace is making unusual noises, such as buzzing or rattling
• The furnace is putting out dust, soot, or rust, especially around the register
• The furnace starts turning on and off more frequently
• The heat exchanger is cracked
• You’re not using it any more frequently, but your heating bills are skyrocketing
• Your house is heated unevenly, with some rooms warmer than others
• You see rust, cracks, or corrosion around the furnace
• You notice the humidity in your home rising

Some of these warning signs may only indicate that furnace maintenance or repair is needed. However, as they begin to add up near the end of the appliance’s lifespan, they can be signs that it’s time to replace the furnace entirely. An HVAC professional will be able to tell you if a replacement is necessary, and you can always get a second opinion from another contractor to ease your mind.

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How Long Does a Furnace Last?

Most furnaces have a lifespan of 20 to 30 years. However, this doesn’t mean you can wait that long to replace yours. After about 15 years or so, you may need to consider a furnace replacement if your unit has been experiencing significant problems and requiring frequent repairs.

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How Much Does It Cost to Replace a Furnace?

When you consider furnace replacement costs, make sure you factor in the entire process: the new furnace itself, the installation costs, the removal and disposal of the old furnace, any building permits or fees, and any necessary changes to your existing HVAC system. Clearly, a new furnace is a substantial investment.

On average, the entire cost for replacing a furnace including materials, equipment, and labor is $4,771. According to HomeAdvisor, the price range is typically between $2,825 and $6,846, depending on the type and size of the furnace. Here’s a breakdown of furnace replacement costs by type:

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Types of Furnaces

Not all furnaces are the same, as detailed by HVAC.com. They’re differentiated by the fuel they use to produce heat, and some are better suited for use in cold climates than others.

• Natural gas: Furnaces that burn natural gas are the most common type today, and they heat a house quickly and evenly in the harshest of winters. They are fast, efficient, and run on inexpensive fuel. Unfortunately, they also have a high environmental impact and require ductwork throughout the home.
• Oil furnace: Because of the high price of oil, these furnaces are becoming obsolete. However, they can still be found in some homes in the Northeastern U.S. They’re usually less efficient than natural gas furnaces, though both fuel types release carbon monoxide into the atmosphere.
• Electric furnace: Electric furnaces tend to be the least expensive to purchase and install, but they are the most costly to run. Additionally, while they’re easier to maintain, they take a long time to heat up a space. You’ll typically find these furnaces in warmer climates where heating needs aren’t so intense. Some electric furnaces are mini-split systems that combine heating with air conditioning without the need for ductwork.
• Coal furnace: Furnaces that burn wood or coal aren’t common, particularly in cities and suburbs, but they can still be found in some rural areas. They’re expensive to install but cheap to run, and they can be used completely off the grid. However, they require a good deal of maintenance, including regular ash cleaning and boiler feeding.
• Propane furnace: Propane is the gaseous byproduct of oil production, and it can be used to power a furnace, particularly in places where other fuels are scarce or overly expensive. Propane furnaces can also be small in size, making them ideal for some compact, rural homes. Natural gas furnaces can be converted to run on propane with a low-cost conversion kit if necessary.
• Heat pump: Instead of burning fuel to create heat, a heat pump moves heat indoors, even when it’s cold outside. These high-efficiency devices use only about a third as much electricity as an electric furnace and don’t produce emissions like oil and gas furnaces. Newer models are now powerful enough to use even in colder climates, though installation costs are still on the high end.
• Geothermal and solar furnaces: Unfortunately, the greenest options remain the most expensive up front. While they are inexpensive to run, you may not recoup your costs even over the life of a geothermal or solar furnace system. However, if your priority is making your home comfortable without harming the environment, renewable energy is your best bet.

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Will a Home Warranty Cover Furnace Replacement?

A home warranty is a contract that covers the cost of repairing or replacing covered home systems and appliances that break down due to wear and tear. Nearly all home warranty companies offer coverage for heating systems, which include furnaces. Although most of these warranties don’t cover pre-existing conditions, whether you knew about them before signing the contract or not, they do cover systems and appliances either without an age restriction or up to a certain age (for example, 15 years).

If your furnace is getting toward the end of its lifespan but still functioning normally, you may want to consider investing in a home warranty with furnace coverage. With one of these in place, you can call your provider any time your furnace has an issue, and the company will send one of its contractors to make repairs. If the contractor determines the breakdown is due to wear-and-tear damage, the home warranty company will cover the bulk of the repair costs. If the furnace can’t be repaired, the provider will often cover the cost or most of the cost of a replacement.

Always check the terms and conditions of the contract carefully before signing, of course, but know that a home warranty can potentially save you hundreds on furnace repairs. Many companies even offer pre-season tuneups for your HVAC system.

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Our Conclusion

A home warranty can help substantially when it comes to furnace repair and replacement. With coverage for your heating system, you won’t have to bear the full burden if your furnace breaks down due to wear and tear. For the cost of a monthly policy and a low service call fee, you can have the peace of mind of knowing you won’t need to pay full price to have a worn-out furnace replaced.

Recommended Home Warranty Companies

If you’re considering purchasing a home warranty to get coverage for your furnace, we recommend getting quotes from the companies below.

American Home Shield

When it comes to home warranty companies, American Home Shield gets our top recommendation. We find that this provider offers the best combination of comprehensive coverage and overall customer experience. It’s unique in offering coverage for furnace conditions excluded by most other home warranties, including rust, corrosion, insufficient maintenance, and even unknown pre-existing conditions. You can read our article on American Home Shield Reviews to learn more.

Liberty Home Guard

Liberty Home Guard is a worthwhile consideration for homeowners with unique coverage needs. While its base plans cover many of the standard items, such as kitchen appliances, laundry appliances, and essential built-in systems, Liberty Home Guard stands out for its long list of add-on options. Furnaces are covered under Liberty’s Systems Guard and Total Home Guard plans. Check out our Liberty Home Guard Reviews article to learn more.

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FAQs about Furnace Replacement Costs

How much should I expect to spend on a new furnace?

The cost of a new furnace depends heavily on the type of fuel it uses. An electric furnace may cost $2,000–$7,000 for the unit and installation, but a natural gas furnace is likely to cost $3,800–$10,000.

How long do furnaces usually last?

Most furnaces can last 20–30 years. However, if you’ve had your furnace for at least 15 years or so and it’s beginning to need frequent repairs, you should consider replacing it.

What time of year is cheapest to replace a furnace?

Usually, late spring or early summer are the cheapest times to replace a furnace, if you can wait that long. Furnace repair technicians are typically not as busy and may not charge as much for labor.

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