AC Lemon Laws and Service Warranty Info

If your new air conditioning unit isn’t working properly, you may be wondering if there are any steps you can take resembling the lemon laws effective in the car industry, especially if your unit is out of warranty.

Alternatively, you might be purchasing a brand-new A/C system and are questioning if you need to invest the extra cash to acquire an extended labor service warranty.

Do AC Lemon Laws Exist?

We are all accustomed to the term “lemon law” thanks to the pre-owned car industry. Numerous states have actually applied lemon laws to protect customers from deceitful secondhand car suppliers that acquire and resell cars and trucks that most likely ought to have gone to the scrap yard instead of being re-sold.

When an AC and heating system is installed brand new, there are no lemon laws for these sorts of acquisitions. State lemon laws just apply to vehicles, not consumer items. This does not suggest you have no defense, you are probably protected by various other means.

Federal Consumer Protection — The Magnuson Moss Warranty Act

Under government legislation, manufacturers and suppliers are not required to provide warranty on a product; the item could be marketed “as is.” Nonetheless, if an item does have a warranty, this regulation protects customers by applying that warranty. It is essential to keep in mind that a consumer needs to enable the supplier or distributor sensible opportunity to do so. The “reasonable” component may come under question however, so you need to consider your next steps carefully.

The Magnuson Moss Warranty Act was established to stop manufacturers from making use of challenging legal language like misleading disclaimers. For AC and heating units, there are typically two warranties applicable: a factory warranty from the manufacturer and one offered by the installer, covering labor for a stated length of time.

The law is actually intended to enforce the manufacturer warranty, not the contractor’s installation. Manufacturers that offer written warranty cannot disclaim a suggested warranty. Nevertheless, contracted service providers are not the entity offering warranty so they (by law) may disclaim suggested manufacturer service warranties on the items they market.

That would mean that if for some reason the unit has an issue, the manufacturer must honor the warranty. The contractor may defer, citing you may still rely on the manufacturer’s warranty to hire another licensed service provider.

However, if the warranty is issued by the service contractor, they must honor it. On the consumer’s part, they must give the contractor a sufficient, reasonable amount of time to address the issue. That’s where most go wrong; they expect immediate solutions that sometimes don’t happen that way.

If there’s a breakdown between you and your contractor, it may be best to move on to one you trust and just take the hit. Even suing may not provide adequate solutions, unless the settlement amount would be large enough to make it worthwhile. Most times the only winners in those situations are the lawyers.

What are the Expectations with a Failing Newer System?

hvac system photo

Photo by seanmfreese

Of the hundreds of new systems installed each year, there are going to be a small percentage of them that fail for one reason or another within the first couple of years, especially in locations that experience extremely cold weather over an extended period. With hundreds of mechanical, electronic, and sometimes heat-sensitive electronic components, it’s reasonable to expect there might be occasional failures.

Understand that the failure of a single component, while it may keep your unit from operating properly, it may not constitute a lemon law violation. That single component may have a failure, but that doesn’t mean you have a lemon on your hands if the remainder of the unit is operating as it should.

Manufacturers / Contractors and Factory Warranties

It’s critical to understand the relationship between contractors and manufacturers with regard to the warranty process. As HVAC manufacturers are only able to sell their products to licensed installation contractors, the contractors purchase your unit and peripherals and you are the benefactor of the full factory warranty. You are responsible for maintaining the unit per manufacturers requirements. The manufacturer sets the terms of the warranty they must honor, which the contractor has no influence over, and they always honor the terms of their warranties.

Recognizing Your Labor Service Warranty

contractor photo

Photo by Elvert Barnes

Your contractor is responsible for your labor warranty. They will honor the terms of their warranty without the involvement of the manufacturing company. The manufacturer has no influence on coverage offered in a labor warranty, however if your challenge involves any parts, the manufacturer will provide them or reimburse your contractor for them.

Understand that the thousands you pay for a new system covers the cost of the equipment, parts, and all that it takes to run the business associated with that installation, like payroll, overhead, etc. Consequently, contractors will seek to install only the most reliable systems as it’s in the best interest of both of you. Warranty claims cut into profits significantly, so installers want to install a reliable system.

AC System Extended Parts and Labor Warranties

There are extended parts and labor warranties offered that offer comprehensive coverage above and beyond the standard, usually through a third party company. They are issued directly to the consumer. Caution should be observed when considering “included” or “in-house” warranties. If for some reason your installer goes out of business, you’re left holding worthless paper. You should also be aware that consumers are allowed to purchase this type of coverage as much as 10 years after initial purchase. There is typically a deductible involved, specified in your agreement.

Rates of extended warranties are based on the particulars of your system, like brand, accessories, length of coverage, type of system (heat pump, gas furnace, etc.) and configuration (rooftop, split-system, ductless, etc.), typically ranging from $1200 to $2800.

The Contractor is Always on Your Side!

superman photo

Photo by dmuth

The contractor recognizes you as their client, where the manufacturer does not. The manufacturer considers the contractor their client.

Your contractor will be your hero when it comes to making sure your claim is handled appropriately. AC manufacturers are huge corporations selling millions of units a year, while in comparison, your contractor is a blip on the radar. You are always recommended to partner with your contractor as an ally to ensure your system remains at peak efficiency.

Exactly how New is Your New System? Life Expectancy per your Manufacturer

Here are some details that could aid you to identify if an extended warranty is ideal for you:

Even though 30 year old equipment can continue to serve, so long as there are parts available, it may not be the most cost effective solution. Most manufacturers suggest a life span of 12-15 years for today’s equipment, with the exception of some ductless models, which may live a bit longer. Hence the prevalence of 10 year warranties.

According to the manufacturer, an HVAC system uses about 6.7%-8.3% of its life each year. By year 3, 20%-25% of its life has been consumed. As such, systems are using a quarter of its expected life span in three years, so “new” is extremely relative.

In Summary

While there are no AC lemon laws, overall, your HVAC system should be reliable, but to protect against eventualities, a warranty is recommended. Just be sure to read your contracts and determine if it serves your needs, and rely on your contractor to advise you appropriately, but if you determine it advisable to purchase an extended warranty, do it independently.

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