When an HVAC system breaks down, the first question is almost always the same: is it worth repairing, or is it time to replace the whole system? A few concrete factors make that decision much easier than it feels in the moment.
Age is the starting point. Most furnaces last 15 to 20 years and most central air conditioners last 12 to 15 years. If your system is within a few years of the end of that range and needs a repair costing more than a few hundred dollars, replacement is usually the better financial decision — you'll likely be facing another repair within a year or two regardless.
A widely used rule of thumb is the '$5,000 rule': multiply the age of the unit by the cost of the repair, and if that number exceeds $5,000, lean toward replacement. A $600 repair on a 12-year-old AC unit (12 × 600 = $7,200) points toward replacement; the same repair on a 4-year-old unit (4 × 600 = $2,400) points toward repair.
Repair costs for common HVAC problems — a failed capacitor, a refrigerant leak, an igniter issue — typically run $150 to $600. More significant repairs, like a compressor or heat exchanger replacement, can run $1,200 to $3,000, which is often close enough to a full replacement's financing cost that it's worth getting a replacement quote before committing to the repair.
Full system replacement — furnace and AC together — typically runs $5,000 to $12,000 depending on your home's square footage, the efficiency tier of equipment you choose, and whether existing ductwork needs modification. A furnace alone typically runs $3,000 to $7,000; an AC unit alone typically runs $4,000 to $8,000, though replacing only one half of a matched system can create efficiency mismatches worth discussing with your contractor.
Beyond age and repair cost, watch for rising energy bills without a clear cause, uneven heating or cooling between rooms, and increasingly frequent repair calls — all signs that a system is nearing the end of its useful life even if it hasn't fully failed yet. A licensed HVAC contractor can give you a load calculation and efficiency comparison specific to your home, which is the most reliable way to know whether repair or replacement actually makes financial sense in your specific case.