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Question DetailsAsked on 6/16/2017

Is $1200 to install a $1600 3 1/2 ton a/c unit in one day on 3000sq ft house too high of an installation price?

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Depends largely on what you think the definition of a fair price is - new/replacement installs are commonly a major money maker for plumbing, electrical and HVAC firms - so as opposed to repair work where they generally charge a reasonable labor charge (including overheads, and profit figured at typically 10-20%) for new installs/replacement units many of them figure their "normal" rate price for the materials (commonly including 10-25% but sometimes higher markup on the unit itself) plus their normal labor charge for the estimated time to do the work - then add 50-200% to that number.

Part of this is contingency - basically bumping the number up so high that pretty much whatever hassles or unexpected issues they run into in the course of doing the job they will still make money on every job.

But a lot of it is free profit. For instance, a common central A/C or furnace install may take about 3-6 manhours - which at normal say $100-150/hour labor rate might run $400-1000 in labor, but they may quote the job at about $1500-3000 labor. Plus the markup of as much as $200% or even more on the equipment itself. It is real common these days to see $5,000-10,000 charges for a new/replacement moderate to "high" but readily available (not super-high) efficiency A/C, heat pump, or furnace/boiler installations which costs about $500-1000 retail price and takes less than a man-day to install. But get the right vendor, or use one you have a long-term customer or professional relationship with and you can commonly get a total cost in the $2000-3000 range for a normal unit - like you are seeing.

Examples - a recent forced air standard efficiency American Standard forced air gas furnace install - bids from $1,600-7,000 - and the low bid was from a well-established long-time local independent HVAC contractor and was completed in under 3 hours by one man (except for 15 minutes at the start when another worker delivered the furnace and helped carry it into the work area). I recently got a few hydronic boiler quotes for a standard efficiency replacement unit (no ducting changes needed) - my regular plumbing contractor gave me $1800 quote (unit itself about $700 retail), other quotes from sources who mostly did not know me ran from $3,000-9,000. One neighbor recently paid over $10,000 for a tankless hot water heater which retails for about $550 and took one man under 4 hours to install as a replacement for a gravity flue boiler and conventional water heater which reasonably should have cost maybe $1500 at local plumber rates.

So based on my experience and previous posts here, I would say that your $1200 install price, while likely about half again to twice his expected actual "cost" at normal hourly rates, would likely look like a bargain if you got a bunch or other bids - which is of course your option to see if that bid is in the normal market range for your area.

And of course, as important as the price is how you feel about this vendor and how competent they are. If a firm you trust, especially if you have had good service from them in the past, then even if it might be possible to shave a few hundred off with a lower bid keeping a long-term working relationship with a single vendor (ofr a particular type of work) can save you a lot of $ and grief in the long run - by having competent work done, long term customers tend to get breaks on charges like rounding down rather than up when they run a bit over their billing time increment, faster response, etc.

Answered 3 years ago by LCD

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