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The PrePaid Maintenance Plan Fallacy

In the spring of 2012 we were called to a home to provide a second opinion.  The system was 12 years old and they were in the final year of a 4 year prepaid maintenance contract.  The home owner said the competitors’ tech showed up, took a look at the system label on the side of the unit, and declared it was shot,  “Need a new unit and there is nothing we can do to fix this one.”  When we arrived, the system was cooling, but intermittently.  The reason was the outdoor fan motor was not operating properly and needed to be replaced. When your goal entering the house is to sell something you sell something, when your goal is to fix something you identify the fix. Very contrasting ideology!

Now as a degreed engineer, I cannot predict the life of a unit merely by looking at it or waving a magic wand!  So why is it these companies offer these prepaid maintenance agreements?  The purpose is to build false rapport and tell you when you need a new system vs. the system actually failing and needing to be replaced.  A system that needs an $800 to $1200 repair certainly would make you think twice but it really depends on the specific repair. At PriceMyAC.com, if you do need a major repair, 100% of that amount is credited toward a new system within 12 months.

The point of this discussion here is to educate you and urge you to use extreme caution on these prepaid maintenance plans.  Our plan is monthly and can be canceled at any time.   Our plan includes basic maintenance, not show up and identify what it will cost you to actually have the unit maintained.  I feel a maintenance plan should include maintenance.  The analogy I draw is identical to going to the dentist.  The hygienist cleans and prepares your teeth prior to the dentist looking at them. The dentist then makes the necessary recommendations.  So how is it these guys can make all these suggestions on parts requiring replacement before the unit is cleaned?  The reason is these guys that show up are paid a commission to sell you something.  No sale, smaller paycheck….so now you might be starting to see a pattern.

If you fall for the “we in your neighborhood doing maintenance” call from a telephone solicitor, you can almost guarantee your system is going to get a replacement recommendation at the end of the prepaid maintenance plan…Oh, and meanwhile, the one we repaired more than 2 years ago is still running!


What’s commonly replaced for maintenance purposes?  During a tune up the most commonly replaced  items are contacts, capacitors, and outdoor fan motors.  Any contact that shows signs of being charred and burned should be replaced.  Capacitors that are replaced must be tested at applied voltages (330-440 volts) while the system is operating.  However, a swollen capacitor, or one that is leaking oil, should be replaced.  Outdoor fan motors are trickier.  A fan motor shaft should not have a lot of play into and out of the motor.  If it does, the bearings are worn and it should be replaced regardless of amperage draw.  Another great indicator of an outdoor fan needing replacement is with a photo tachometer.  This device is expensive but it shows you the RPMs of the fan motor in operation.  If its not within 5% the motor should be replaced.

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