The Answer Guide

What Exactly is a Service Agreement?

How does it differ from an extended warranty?...
How does it save money?

Why do air conditioning companies promote service agreements? What service or maintenance procedures are performed as part of a service agreement?

A service agreement is not an extended warranty. In fact, a service agreement will ensure that the manufacturer’s maintenance requirements are met so that your comfort system will remain in warranty. Without documented annual maintenance, manufacturers are under no obligation to honor their own warranties.

A Few Facts

• Annual maintenance pays for itself in operating cost savings during the peak season alone. Empirical university and utility research found operating cost savings of $32.76 per month from annual maintenance. Not only was efficiency restored, but capacity was also recovered, improving comfort.
• All manufacturers in the heating and air conditioning industry recommend annual maintenance. What many consumers do not realize is that in the fine print of their warranties, they require maintenance for their warranties to remain in effect.
• Heating and air conditioning systems work hard. They are cycling on and off, starting and stopping 4 to 8 times an hour. It’s like driving your car in city traffic and shutting it off at every stop light.

What’s the difference between a service agreement and an extended warranty?
Many consumer electronics companies sell extended warranties that they name “service agreements.” These are little more than insurance programs. Service agreements or maintenance agreements in the heating and air conditioning industry are something else entirely. These involve true maintenance work that equipment manufacturers require on an annual basis for their warranties to remain in effect. They also involve safety checks for your gas combustion heating system that literally could save lives.

Why do I need service twice a year?
Service is needed before the start of each cooling season and each heating season. Different maintenance procedures are performed for your cooling system than for your heating system. Because your comfort system works so hard during the year, a number of components need adjustment, calibration , lubrication, and cleaning each year. Your system will still work for a time without the maintenance, but not as efficiently. In addition, a number of items are checked. Some of the checks are to identify and stop small problems that could become big problems. Some are to verify safe operation.

How does a service agreement save me money?
Service agreements save you money by restoring efficiency, preventing inconvenient breakdowns, and extending the life of your equipment. You can get the same maintenance without a service agreement, but it costs more. With a service agreement, the service is scheduled during slow periods, so you receive a discount. In addition, you also save on emergency service during the year.

© 2003 Service Roundtable