Cutting thousands of dollars in replacement costs
The typical cost of replacing a condenser coil on a 7.5-rooftop unit is $3,500. Add two compressors at $5,000 each, and the immediate repair costs for cooling equipment begin to approach the total cost of replacing an entire unit. Installing new equipment with extended warranties eliminates those concerns, and it helps organizations that couldn’t operate without conditioned air.
“In a sluggish economy, a property manager may not be producing adequate cash flows due to declining tenant occupancy and rent compression, says Gary Whitford, service manager for Crawford Services. “When old A/C equipment breaks down or needs to be replaced, it is difficult to have the upfront cash to be able to replace it. With the Lennox financing program, customers can set a manageable cost to be spread over a period of time.”
Crawford’s customers who are financing also include the owner of a large multitenant site, and a multifamily building owner. The contractor is also presenting the Lennox financing program to potential customers with HVAC equipment needs ranging from $5,000 to over $1,000,000.
Financing on their own terms
“Building owners and property managers appreciate the lease-to-own program because it allows them to choose the term length and payment amount for their HVAC work that aligns with their cash flow and the desired investment return on their properties,” Crawford says. “They can also include extended warranties and maintenance plans in the lease to develop a total cost of ownership model.
“For instance, the customer can select the optimal Lennox equipment for their application, add a 10-year parts and labor warranty and a two-year maintenance plan, and then select a payment term between 24 and 60 months with a $1.00 buy-out at the end of the term. A $10,000 total purchase of Lennox equipment and services can result in a five-year lease-to-own plan for as little as 232.50 per month,” he says.
With HVAC leasing, the customer will own the equipment as if they had purchased it outright. Leasing new equipment eliminates many problems inherent with older equipment, such as emergency service calls, high cooling bills and comfort complaints, and helps companies achieve a lower total cost of ownership with reduced utility bills through high-efficiency equipment.
Freeing up cash flow
In many cases, financing allows property managers and building owners to free up company cash by eliminating the large down payment on equipment and immediately reducing their energy bills. With the energy savings and reduced maintenance expense, buyers can own new, high-efficiency equipment with money left over, even after making the leasing payments.
Installing newer, ENERGY STAR® qualified equipment – like the Energence rooftop unit with efficiency ratings up to 17.0 SEER – can reduce energy expenses hundreds or thousands of dollars per unit each year. New equipment can also improve cooling, heating and ventilation.
The benefits of Lennox’ HVAC financing for building owners include:
- Lower upfront investment (requires two months’ payments deposit)
- No immediate large outlay of cash
- Lower service and maintenance costs
- Immediate savings in utility bills
- Energy rebates and tax credits
- No impact on the owner’s line of credit
- Simple one-page application for most buyers
- Approval within 24 to 48 hours
There are several benefits for contractors, as well. These include better scheduling opportunities, reduced billing paperwork and receipt of payment within 24 hours of job completion. Whitford said, “The financing program is another tool that allows Crawford Services to better serve our customers and separate ourselves from our competition.”