I would not recommend purchasing HVAC from big box stores, regardless of come ons like gift cards...

IMO

Friends don't let friends purchase HVAC equipment and work through Costco or any of the other retail chains. The best contractors in any area are always too busy to need such a referral source. Guess what kind of contractors do need it?

Ask people you know - asking a dozen or more isn't too many. Ask real estate agents who their customers have worked with, for both positive and negative feedback. Follow up on names you hear often to have consistently good reports. As with other things, I think it can be helpful to consult with (but don't necessarily bet the farm on) what you find on Yelp.

Good luck

I agree with what Austin says, and would extend it to any store. I would let the contractor select, purchase, and guarantee the hardware for a complex installation like this.

I recently joined Costco so I appreciate the potential savings. Costco is offering 15% off the price, plus if you have an executive membership and use the Costco credit card you can save another 4%.

The 15% has to come from somewhere. I imagine most if not all comes out of the contractor's pocket. So he has to either raise the 17.64% over his standard installation price, or cut corners to make up the difference.

My suggestion is to call your local Costco store and ask which Lennox dealer will be performing the installation. Then do some research about dealer's reputation. If things look favorable then get a quote through Costco. Then get 2 - 3 other quotes to get an idea what other dealers are offering in terms of price and system proposal. At the end of the process you will have more knowledge and it may turn out to be a good learning experience.

Thank you all so much for the very helpful information. The estimate I received from the Costco vendor is significantly higher than the others. The vendor also told me that Costco requires buyers to have a yearly maintenance plan. I have contacted Costco to verify this information and to express my concerns about the higher price. I have not heard back from them.

"You have to consider why the big box stores do it. $$."

Austin, retail stores are in business to make money and they do what they do to those aims. You too are in business to make money. If i said "consider why Austin does what he does. $$", that would be neither wrong nor an insult. Don't you do what you do for money too? I see no difference.

But that's an aside. Better contractors aren't generally involved with retail store referrals and so that approach isn't usually a good one. THe price is higher, in part, because of the added expense of the commission that needs to be paid to Costco.

Yes, of course. But there's also escaping the liability of the transaction.

What is preventing Costco or any other box store from hiring a Licensed Contractor to start their own HVAC service outfit, make that Licensed Contractor in charge of hiring the technicians and so forth and running the HVAC department.

They could call it 'Costco HVAC' or whatever. But no, the rage these days is to pull money from an area in which you have 'no real expertise' and extract $$ from this area with little to no liability. AKA third party bonanza.

I don't have a problem with a company that is trying to generate profits in an area they are experts in. Costco is not an expert in HVAC. So that is my point.

Oh, the rebuttal might be: no other big box store does this. Which is not true: Sears is one that has their own HVAC Service dept.

Costco has a different business model compared to Home Depot, Lowes, and Sears. You shouldn't lump them in with the other big box stores.

"What is preventing Costco or any other box store from hiring a Licensed Contractor to start their own HVAC service outfit"

Nothing at all, but why would it matter? What's to stop you from starting your own landscape maintenance service, or pool service, or house cleaning service, or restaurant? The same answer, nothing at all. These are lines of work you don't want to do, and running a licensed HVAC operation isn't what they want to do.

The easiest model to make money in this sector, requiring the least amount of personnel and effort, is for the Costcos and Home Depots, etc. to act as a referral source and get a commission for doing so. Do you know that on the internet, many sites operate EXACTLY the same way. If you go to a PC site, read a review, and decide to buy something, if you click on a link on that page to a seller, the referring site gets a commission. What's to stop them from selling PCs themselves? Nothing, it just isn't the kind of business they choose to run.

I don't think anything I said really sunk in. These outfits are collecting 'fees' for the purpose of referral for work they do not do.

I could argue that some people might be lead to believe that because Costco, Home Depot or Lowes sells these services they have some association with 'what ever company' is sent from their store. When in fact it's merely a way to collect fees for selling / installing products that you professionally have little knowledge or capability in. These stores care very little about who does the work as long as the company is licensed to perform the work. Other than that there is no care in the world, because they have no liability in the transaction.

Put another way: If someone installed a HVAC system from a box store. That system has problems, doesn't work properly etc. and the Installing HVAC company fails and goes out of business. Could Costco, Home Depot or Lowes fix it?

No, it's a business they choose not to do, but they are all the willing to collect fees associated with selling a big ticket item. I like to call this a big fat 'CONFLICT OF INTEREST'.

Landscape: how much liability is associated with that? How much does someone need to know to operate a lawn mower or weed whacker? Do you have to go to trade school to do this profession? Are these people required to be licensed with the state?

Certainly a pool maintenance person would have to have some formal training... but no where near the level of a Licensed HVAC contractor.

"I don't think anything I said really sunk in. These outfits are collecting 'fees' for the purpose of referral for work they do not do."

I understand what you said, I'm not sure the reverse is true. But it doesn't matter.

Retail stores sell products they don't make and take a profit for doing so. Buy-sell, or a commission for the sale (like a car salesman gets), it's exactly the same.

Stores aren't responsible for quality or warranty - if the customer doesn't like the item or it breaks within the relevant period, they can return it for a refund, and the store returns it to their supplier for their refund. You too make a profit selling products you don't make and don't offer a warranty for, the manufacturer does. If a Costco affiliated HVAC contractor's customer has a problem, they deal with the contractor and the manufacturer, just as your customers deal with you and if necessary, the manufacturer. It's the same.

I don't think the point you're trying to make is valid. There are far too many examples in the world of commerce where one entity gets a fee (commission) for connecting a buyer and a seller. The agent then steps out of the way and the two principals do their business and ride off into the sunset without the involvement of the agent. Good discussion, have a nice weekend.

I understand what you're trying to say, but there are vast differences from a 'product' that requires skilled labor to not only install it, but also to service it.

Costco sells toasters, then they offer an extended warranty on that toaster should something break. The extended warranty is marked up in which they make a profit on the warranty. You can either buy it or not.

So what is the difference from a toaster to a HVAC product tied to your home?

If the toaster breaks you unplug it and take it back to Costco or whatever box store you bought it from. They don't work on it, they either ship it off or they replace it with a new one. The new one was not worked on by them in any fashion. It's in the box plug and play.

If the HVAC product fails you can't unplug it and bring it back. The 'skilled' labor must come to your home to service the 'product'. Costco or any other box store is not coming to your home for anything. If you call me I will actually be the one who repairs it at your home. Costco? nope they don't repair anything that I am aware of.

The labor warranty I include with the HVAC product comes from me. In some cases this may be several years. If this labor warranty that is included extends to 5 years or more I can off load some of this break down risk by purchasing an extended labor warranty. But just for clarity this extended labor warranty often times requires maintenance service to remain valid.

Costco or whatever box store you use--- once the transaction is over they are more or less out of the equation. They don't service or work on HVAC equipment. That's my point. They extract a fee and then look for another fee to extract from someone else.

The flip side of this: I don't need Costco, Home Depot, Lowes etc.: To do my job.

BUT: Costco, Home Depot, Lowes etc. can't do the job of extracting fees for HVAC equipment installs without a licensed HVAC contractor. Some contractors are ok with this kind of arrangement. So whatever floats your livelihood, go for it.

My opinion is that anything that involves a 3rd party transaction, does not favor anyone except the 3rd party that is often times silent and just there to 'collect fees'. How nice of them to come to a job I am going to do for the sake of them to collect a fee? Hello?

Ah, money! If you can't spend it then what is it good for?

But ethics do come to mind or at least they should.

Enjoy the rest of your long weekend everyone.

Thanks everyone for your helpful comments. Have decided not to go with Costco. After leaving 2 messages no one called me. I reviewed the estimates and have narrowed it down to 2 independent heating companies. I will be contacting them to clarify a few things and then will make my decision. Thanks again.

You're welcome, Jo. I hope everything goes well for you.

Hi everyone, I would appreciate abit more help. One company is recommending a hoyme valve however, others are saying it is not necessary. Does anyone know the pros and cons of the hoyme valve? Does anyone have an opinion on this? Also, any comments/advice regarding 1 inch versus 5 inch furnace filters. Some people are recommending the 5 inch while others do not push the 5 inch. We currently have one inch filters and do not have a lot of dust in the house.
Thanks.

Hoyme valve:

Depends on what it's being used for.

Fresh air intake: If the house is a tight build it can be used in conjunction with controls to bring in fresh air from the outdoors. If the house is not a tight build it could reduce the capacity of the air conditioner slightly. If the house is in a humid climate it brings in humid laced air. If the opening and closing of this valve is controlled properly then yes. But in many cases tight homes already have a fresh air intake. So if you don't have one now, you probably don't need it because your home's air exchange rate from inside to outside is high enough already without it.

Combustion air intake: If your furnace is installed in a closet, normally a closet will have two flues. One flue for furnace exhaust and another for furnace combustion air.

The one for combustion air is always open, bringing in fresh air via an open flue tube. So they put a closeable valve for when the furnace isn't firing.

However, it is my opinion this could be fool hardy. Because if that valve fails for whatever reason (doesn't open) that furnace must be disabled because the system will produce CO (carbon monoxide) due to the lack of combustion air. If there is no control monitoring the valve for this lack of safety it's not worth the risk in my opinion.

5 inch filter versus 1 inch: they can work well with a large central return and reduce the number of times they must be changed from once or twice a year from the normal month to two months for that of a 1 inch filter.

My preference for my homes (built in late 70's) is multiple returns with 1 inch filter in each return. I pull this air from various places through out the home. This is primarily to negate 'wind tunnel effect' of a single air return and does a better job of pulling warmer air that would normally get trapped on a hot ceiling in areas farther from the central air return design.

The design I describe above has it's limitations. As if the house in question is a two story home, your limitation is the structure itself. The same can be said of a single story home with little to no attic space.

Thank you so much for explaining and providing very helpful comments. Have a great day.

Well I got the new furnaces - Lennox high efficiency. I did not go through Costco. Everything is looking very good. Now the question is the maintenance agreement. They want $200 per year to service the furnaces. The furnaces have a one year warranty. With the maintenance agreement they will offer 10 year warranty for $200 each year for 10 years. Would appreciate advice as this ends up being a lot of money. They said it is worth getting the maintenance to be proactive. Thanks.

How many furnaces did you purchase?

Two furnaces.

I want to make sure I understand offer. The installer will do preventative maintenance each year for $200. By doing this they will cover all labor costs for any needed repair for years 2 - 10. Is this correct?

Do you know what they charge if they only did preventative maintenance if you had only one furnace, and would you get a price break on the second furnace?

For a new furnace, preventative maintenance every other year is fine. This assumes you will change the filter when needed. So you need to calculate how much you would spend on preventative maintenance only and then see how much is the additional cost to get the additional 9 years of labor warranty.

Thank you so much for your questions and comments Mike. The installer left the “Factory Protection Plan” contract for me to sign if I want to go ahead with the agreement. This is a summary:
Furnace #1 - $104.95 per year
Furnace #2- $99.95 per year
“A yearly service of the equipment, a discount of 10% off duct cleaning, all indoor air quality products including filters, humidifier pads, humidifier installs, and air filtration systems, 24 hour emergency service (overtime rates apply). The company will respond to service calls the same day.”
The furnaces have a one year warranty on parts and labour, and 10 years on parts. I thought this contract was to cover labour charges over the 10 years but now I am not sure about this. Also, the installer said it covers 10% off filters. I think I need to ask questions to really understand this. I would appreciate your advice Mike and thanks.

For a new furnace, preventative maintenance every other year is fine.

If you don't have an extended labor warranty on the furnace, yes... the above statement should be ok in most circumstances --- however, there is no HVAC company that is likely to remind you every other year to get this done (very easy to forget).

If you do have an extended labor warranty on the furnace, that warranty can be void if you do not follow the maintenance requirements that the extended labor warranty specifies. They all that I have seen, require documented proof that maintenance has been performed 'annually' at least.

I called the furnace company today to better understand the maintenance agreement. It does cover the labour costs, and they provide 10% off furnace filters. The furnaces come with a one year labour warranty and 10 year parts warranty. So I would be getting the labour warranty extended by signing the agreement. My question is regarding the cost of labour and likelihood of having issues with these furnaces. I would be paying $205 per year for this plan which calculates to $1845 for the 9 extra years of labour warranty. This sounds like a lot to me but I know the labour rates are high. I am comparing this to my old furnaces which I did not pay that amount in labour over 25 years. Are these new furnaces complicated and therefore could result in issues? Any advice would be appreciated. They also told me their filters are better than the ones I can get at Home Depot.

I don't think you can really look at it as how you are looking at it. Because you're still getting the maintenance for this provided to you, which is also fulfilling the terms of the extended labor warranty. (Provided the maintenance is done properly)

As far as breakage goes, the first 5 years on most 'high' efficient furnaces there's very little that can go wrong, this doesn't mean you won't suffer a failure it only means the risk is very low. It more or less comes down to how much you use the furnace, in my opinion and that it was installed properly.

If you have an extended warranty and skip the first 5 years of maintenance because the risk of breakage is low and you do this to save money... the extended warranty is worthless. No extended labor warranty company will honor the warranty if you failed any terms. Meaning they want to know they aren't paying for a possible failure that could have been prevented had maintenance would have been performed.

There can be more failures if the furnace is a condensing furnace, because there are more controls and condensate can present additional repairs over time due to maintenance aspects alone.

If someone is skilled, the furnace isn't any more complicated than anything else. If someone is unskilled, they will probably make a bigger mess of the situation.

Commonly called 'parts changers'. They can't trouble shoot and so they guess a part failure without actually proving it. If that doesn't truly fix it, then it's on to another suspect part.

Thank you for your very helpful comments. I am still thinking about all of this.