Repair or Replace? - That is the Question!

by Thomas Kraeutler

In today's world of disposable everything, you have to think twice about making an expensive repair to an aged appliance. Years ago, the cost of labor was low when compared to the cost of the appliance. Back then, it made more sense to make a repair and prolong the life of your dishwasher or air conditioner as long as possible. Today, times have changed. Labor is expensive and even a minor repair that involves a tradesman traveling to your house can cost $100 or more. Repairs now make sense only if the appliance has a high replacement value and is still relatively young.

So when are you spending too much? At some point, the cost of repair is greater than the value of the appliance and generally not worth the expense. To answer this question, use this chart to determine if the repair is cost effective.

Appliance Est. Cost Age Range Risk of failure Low Risk Med. Risk High Risk Furnace $1500 - $2500 up to 12 years 30% 12 to 24 years 20% 25 years & up 10% Water Heater $350 - $700 up to 7 years 30% 7 to 14 years 20% 15 years & up 10% Central AIC $1500 - $3000 up to 8 years 50% 8 to 15 years 30% 16 years & up 10% Refrigerator $700 - $1500 up to 8 years 40% 8 to 15 years 30% 16 years & up 20% Range $700 - $1400 up to 15 years 30% 15 to 25 years 20% 26 years & up 10% Dishwasher $350 - $750 up to 10 years 40% 10 to 15 years 30% 16 years & up 20% Washer $350 - $700 up to 10 years 40% 10 to 15 years 30% 16 years & up 20% Dryer $350 - $700 up to 10 years 50% 10 to 20 years 40% 21 years & up 10% Built-in Microwave $400 - $800 up to 4 years 20% 4 to 10 years 15% 11 years & up 10% Garbage Disposer $150 - $350 up to 1 year see note #4 1 year and up Always Replace

NOTES:

1. Risk of failure or break-down increases with age.
2. Percentage indicates maximum cost of repair limit. If cost of repair is greater than percentage of replacement cost shown ,then replacement of the appliance is recommended. If cost of repair is less than percentage of replacement cost shown, then repair is likely to be cost effective.
3. Assumes replacement with like kind and quality as original appliance.
4. Repair disposers only if under manufacturer's warranty. Otherwise, always replace.
5. Estimated costs from 1998.

For example - say you have an air conditioner that is 7 years old and the compressor breaks. An entirely new system would cost $2500, but the compressor repair alone would be $850. Should you repair the compressor or replace the whole unit?. Using the chart, you would note that a 7 year old central air conditioner still has low risk of a repetitive failure. Therefore, it's OK to spend up to 50% of the replacement cost on repair. Since the $850 cost is less than 50% of the replacement value ($1250), you should go ahead with the repair.

Tom Kraeutler is a hands-on home improvement broadcast journalist and the kind of guy homeowners want to call at midnight when their basement floods. He earned his home improvement stripes as a professional home inspector, amassing over 20 years experience learning how houses are put together, and how they fall apart! Tom appears regularly on CNN, MSNBC, The History Channel, HGTV and the DIY Network. He's a columnist for House Beautiful and do! Magazine and his work has been featured in Smart Money, Reader's Digest and in hundreds of daily newspapers across the nation.