Is It Better to Rent or Buy a Furnace?

It really depends on your financial situation and what you’re looking for. Buying a furnace, for instance, costs more upfront but generally costs you less over time, and once you’ve paid for the equipment and installation, you own it. Whereas with renting, while it can make the initial cost easier to manage and may include maintenance or repairs during the term, you could keep making rental payments for years without ever owning the furnace.

If you're looking for some middle ground, there's also the option of financing to help with the initial upfront cost, or even lease-to-own, which is kind of like renting but you actually end up owning the furnace in the end.

So before deciding, it's important for Canadian homeowners to compare their options so that they have a better idea of how much they'll end up paying overall, what’s included in their payments, and who owns the furnace when (if) the payments finish.

You can buy a furnace outright, finance it, rent it or use a lease-to-own program, but who owns the equipment and how long you keep paying can be very different.

Buying a furnace outright means you pay for the equipment and installation, and you own it from the start. You can pay upfront or use financing, and you’ll be responsible for maintenance and repairs that aren’t covered by warranty.

Furnace financing

Financing also lets you buy the furnace, but instead of paying for it all up front, you can spread the cost out over time. However, there are other costs to consider that can affect how much you may end up paying in the end. So when looking at this option for furnace ownership, you’ll want to include the following in your cost calculations:

• The interest rate

• How long the financing lasts

• Whether there are any added fees

You can also request a furnace installation quote first, so you know the full installation cost before comparing it with other options.

With a furnace rental, the rental company owns the equipment. You pay a monthly fee to use it, which may also cover the installation, maintenance, repairs, parts, or labour, depending on the agreement.

However, making monthly rental payments generally won't lead to you owning the furnace later, and some agreements may allow annual price increases or require a buyout if you want to end the rental early.

How is lease-to-own different from renting?

Lease-to-own also lets you make monthly payments, but unlike with a rental, you take full ownership of the furnace once the agreement is complete.

Enbridge Sustain’s current lease-to-own program, for example, includes standard installation, annual maintenance, repairs, and parts-and-labour warranty coverage during the agreement. The standard term is currently listed as typically 15 years, although other options may be available.

What you pay over the long term can look quite different depending on how you get the furnace. Buying has the higher cost upfront, while financing, renting and lease-to-own help spread that cost out over time.

That depends on how you pay for the furnace.

If you buy or finance

You’ll be responsible for regular maintenance and repairs that aren’t covered by the manufacturer or installer warranty. You may be able to add a maintenance plan or extended warranty, but those aren’t always included with every purchase.

If you rent

Maintenance and repairs may be included in your monthly rental fee. So check if the agreement includes it, along with parts, labour, service calls, and whether anything may be excluded.

If you lease-to-own

Maintenance and repair coverage may also be included while the agreement is in place, like with Enbridge Sustain’s current lease-to-own program.

A furnace rental can last for years, so make sure you know what you’ll be paying for and how long the payments last.

Start with the payments and ask:

• How much is the monthly rental fee?

• Can that amount increase?

• How long will you be making payments?

• Are there administration or other fees?

• What will you have paid over the full agreement?

You’ll also want to know what happens if the furnace needs service:

• Is regular maintenance included?

• Are repairs included?

• Are parts and labour both covered?

• Are there service-call fees?

• Are there any exclusions?

Then look at ownership:

• Who owns the furnace throughout the agreement?

• Will you ever own the furnace?

• Is there a buyout option?

• What does it cost if you want to end the rental early?

• Does that amount change as the furnace gets older?

• What happens to the agreement if you sell your home?

The Competition Bureau has called for rental-appliance contracts to clearly explain things like the monthly rate, how long the contract lasts, how a buyout works, and what it takes to end the agreement. It has also raised concerns about buyers taking over rental contracts without knowing what those costs or terms actually look like.

So if something in the agreement isn’t clear, always ask the company to explain it before you sign.

If you want to sell your home while the furnace is still under a rental agreement, you’ll need to find out what happens to that contract.

In some cases, you may be able to transfer the agreement to the buyer. With a lease-to-own agreement from Enbridge Sustain, for instance, you can transfer it to a new homeowner (just be sure to confirm the exact requirements for your agreement first).

Some buyers may refuse to assume rental contracts during home sales, though. In that case, you may need to buy out the furnace before the sale closes.

There may also be a transfer fee or other requirements depending on the contract. So if you’re planning to sell your home, get a current copy of the agreement and find out what the transfer or buyout process looks like before the home is listed.

Ontario has rules around how certain home-comfort products can be sold. For example, unless you arranged the appointment yourself, a door-to-door salesperson generally isn’t allowed to sell you certain major home appliances, such as a furnace, air conditioner, or water heater. Ontario also provides a 10-day cooling-off period for certain contracts signed in the home after an invited sales visit.

When you get the full agreement in writing, you'll want to read through it fully before you sign. Make sure it includes:

• The company’s name

• The furnace and installation being provided

• What you’ll pay

• How long you’ll pay it

• Whether payments can change

• Who owns the equipment

• What services are included

• How a buyout works

• What happens if you cancel or sell the home

If something you were promised by the salesperson isn’t in the contract, make sure it ask to have it added before you sign.

• Buying may make more sense if you can manage the initial cost, want to own the furnace right away, would rather choose your own service provider, and can easily manage repairs or maintenance fees.

• Renting may be worth it if keeping the initial expense down is important, you place more value on having maintenance or repair costs included, and you’re comfortable with the total rental cost and what it takes to end the agreement.

• Financing may work if you want to own the furnace but would rather spread the purchase price out over time. Just remember to factor in the interest and any other financing fees.

• Lease-to-own may offer a middle ground if you low upfront cost and included service but still want to own the furnace once the agreement is complete.

If you're not sure which option fits your budget, contact Enbridge Sustain today to compare furnace installation options and find out what’s available for your home.

Disclosure: Enbridge Sustain offers furnace installation and lease-to-own options within its confirmed service areas. Program terms, eligibility, payments, service coverage and ownership conditions are governed by the applicable agreement. This article provides general consumer information and is not legal or financial advice. Contract rights and obligations can depend on the provider, agreement and circumstances.