Replacing or installing a new furnace and air conditioner is a major home investment. This guide explains typical new furnace and air conditioner cost ranges, factors that affect price, system options, installation considerations, incentives, and practical tips to manage expenses.
| Component | Typical Cost Range | Notes |
|---|---|---|
| Furnace (Gas, Mid-Efficiency) | $2,000 – $4,500 | Includes basic installation |
| Furnace (High-Efficiency) | $4,000 – $8,000 | Higher AFUE and modulating options cost more |
| Central Air Conditioner (Single-Stage) | $3,000 – $5,500 | Depends on SEER and tonnage |
| Heat Pump (Air-Source) | $4,000 – $10,000 | Replaces both heating and cooling in some climates |
| Full HVAC Replacement (Furnace + AC) | $7,000 – $15,000+ | Varies by equipment quality and home complexity |
Content Navigation
- How Costs Break Down
- Key Factors That Influence Price
- Average Cost Ranges By Home Size
- Equipment Options And Their Cost Impact
- Installation Considerations And Hidden Costs
- Rebates, Tax Credits, And Incentives
- Financing Options And Budget Strategies
- Maintenance And Long-Term Cost Considerations
- Common Questions Homeowners Ask
- How To Get Accurate Estimates
- Tips To Lower New Furnace And Air Conditioner Cost
- Selecting The Right Contractor
- Summary Of Key Cost Drivers
- Further Resources
How Costs Break Down
Understanding the difference between equipment and installation helps homeowners estimate total new furnace and air conditioner cost. Equipment is the physical unit(s) while installation covers labor, ductwork, permits, and disposal of old equipment.
Labor and installation commonly account for 20%–50% of the total bill depending on complexity. Additional work such as duct repairs, electrical upgrades, or zoning increases costs further.
Key Factors That Influence Price
System Type
Choices include separate furnace and central air conditioner, or a heat pump system that handles both heating and cooling. Heat pumps often cost more upfront but can reduce long-term energy bills in moderate climates.
Equipment Efficiency Ratings
Furnace efficiency is measured by AFUE and air conditioner efficiency by SEER. Higher AFUE and SEER units cost more but deliver lower operating costs. Balancing upfront price and long-term savings is critical.
System Size And Capacity
HVAC sizing is based on home square footage, insulation, window area, and climate. Oversized or undersized equipment reduces efficiency and lifespan. Proper load calculations ensure correct sizing and affect costs.
Installation Complexity
Complex installations—such as multi-story homes, custom ductwork, or installations that require structural changes—raise labor and materials costs. Access difficulties may also add to the fee.
Local Labor Rates And Market Conditions
Labor rates vary by region. Urban areas and regions with high demand can have higher installation fees. Seasonal demand (spring and fall) may change availability and pricing.
Average Cost Ranges By Home Size
Costs vary with home size because equipment capacity needs change. The following ranges are typical for combined furnace and central AC replacements including installation.
| Home Size | Typical Combined Cost | Equipment Size |
|---|---|---|
| Under 1,200 sq ft | $5,000 – $8,000 | 1.5–2.5 ton AC; 40k–60k BTU furnace |
| 1,200–2,000 sq ft | $7,000 – $12,000 | 2.5–3.5 ton AC; 60k–80k BTU furnace |
| 2,000–3,000 sq ft | $10,000 – $16,000 | 3.5–5.0 ton AC; 80k–120k BTU furnace |
| 3,000+ sq ft | $13,000 – $20,000+ | Multiple zones or larger capacity |
Equipment Options And Their Cost Impact
Single-Stage vs Two-Stage vs Variable-Speed
Single-stage systems operate at full power or off and are least expensive. Two-stage units offer better comfort and efficiency. Variable-speed systems provide the best comfort and efficiency but cost the most.
Two-Piece Systems Vs Packaged Units
Two-piece systems (furnace inside, condensing unit outside) are common in U.S. homes and offer flexibility. Packaged units place everything outside or on a rooftop and can simplify installation in some builds but may cost more.
Smart Thermostats And Controls
Adding a smart thermostat improves efficiency and comfort. Many rebates are available for smart controls, and the added cost is often recouped through energy savings.
Installation Considerations And Hidden Costs
Permits, code compliance, refrigerant handling, and disposal fees are common additional charges. Homeowners should ensure bids include these items to avoid surprises.
Common hidden costs include duct sealing or modification, condensate line work, electrical panel upgrades, and required gas line modifications. Ask contractors for itemized estimates and explanations.
Rebates, Tax Credits, And Incentives
Federal, state, and utility rebates can significantly reduce net cost. Incentives often target high-efficiency equipment such as ENERGY STAR heat pumps or furnaces with >95% AFUE.
Federal tax credits and the Inflation Reduction Act have offered credits for heat pump installations in certain cases. Homeowners should verify current federal and state programs and confirm contractor participation in rebate programs.
Financing Options And Budget Strategies
Many HVAC companies offer financing plans, including low-interest or deferred-interest promotions. Home equity lines of credit (HELOC), personal loans, and energy-efficiency loans from utilities are alternatives.
To manage budget impact, consider phased upgrades: address immediate heating or cooling needs first, then plan for efficiency upgrades later. Prioritize systems with the best long-term savings for the home’s climate.
Maintenance And Long-Term Cost Considerations
Routine maintenance such as filter changes, annual tune-ups, and cleaning extends system life and preserves efficiency. Maintenance contracts typically cost a few hundred dollars per year but can prevent costly repairs.
Operating costs depend on efficiency ratings and local energy prices. Calculating lifecycle costs (purchase, installation, annual energy, maintenance, and expected lifespan) gives a clearer picture than upfront price alone.
Common Questions Homeowners Ask
How Long Do New Systems Last?
Furnaces typically last 15–25 years and central AC units 12–18 years. Proper maintenance and correct sizing extend lifespan. Warranties vary by manufacturer and component.
Is It Better To Replace Both Furnace And AC Together?
Replacing both units together ensures matched efficiencies and may reduce installation costs. Mismatched components can lower system efficiency and complicate warranties.
Are Heat Pumps A Good Investment?
Heat pumps are increasingly attractive due to improved cold-weather performance and efficiency. They are especially cost-effective in milder climates or where electricity is competitively priced.
How To Get Accurate Estimates
Obtain at least three written quotes from licensed HVAC contractors. Ensure each bid includes load calculations, equipment model numbers, warranty details, and a breakdown of labor versus materials.
Verify contractor credentials, read reviews, and confirm insurance and licensing. Ask about permit management and whether the price includes removal of old equipment and cleanup.
Tips To Lower New Furnace And Air Conditioner Cost
- Shop Seasonal Promotions: Off-season discounts in late fall or winter can reduce installation costs.
- Combine Projects: Bundling furnace and AC replacement often yields contractor discounts.
- Seek Rebates: Apply for utility and manufacturer rebates to lower net cost.
- Improve Home Efficiency: Insulation, LED lighting, and sealing leaks reduce required capacity and long-term costs.
- Negotiate A Detailed Contract: Clarify scope, timeline, and warranty to avoid change-order costs.
Selecting The Right Contractor
Choose a contractor who performs Manual J load calculations, provides detailed proposals, and offers clear warranty terms. Local referrals and verified reviews reduce the risk of poor work.
Ask contractors about post-installation support, emergency service policies, and what preventative maintenance packages include to ensure long-term performance.
Summary Of Key Cost Drivers
| Driver | Effect On Cost |
|---|---|
| Equipment Efficiency (AFUE/SEER) | Higher efficiency raises purchase price but lowers operating costs |
| System Type (Heat Pump vs Furnace/AC) | Heat pumps may cost more but offer multifunctional benefits |
| Installation Complexity | Significantly increases labor and material expenses |
| Local Market And Season | Labor rates and seasonal demand affect final price |
Further Resources
Homeowners should consult DOE energy guides, local utility efficiency programs, and manufacturer specification sheets for accurate efficiency comparisons. Contacting multiple contractors and requesting itemized bids remains the best way to obtain precise new furnace and air conditioner cost estimates tailored to a specific home.
Tips for Getting the Best HVAC Prices
- Prioritize Quality Over Cost
The most critical factor in any HVAC project is the quality of the installation. Don’t compromise on contractor expertise just to save money. - Check for Rebates
Always research current rebates and incentives — they can significantly reduce your overall cost. - Compare Multiple Quotes
Request at least three estimates before making your choice. You can click here to get three free quotes from local professionals. These quotes include available rebates and tax credits and automatically exclude unqualified contractors. - Negotiate Smartly
Once you've chosen a contractor, use the proven strategies from our guide — How Homeowners Can Negotiate with HVAC Dealers — to get the best possible final price.