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Furnace & AC contract with Reliance

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  • Oct 28th, 2019 10:20 am
[OP]
Newbie
Oct 22, 2019
8 posts
1 upvote

Furnace & AC contract with Reliance

My wife and I purchased our first house shortly after being married. Shortly after we moved in, sales came knocking on the door and told us that the furnace and AC we had in the 11 year old house were too old and their quality and efficiency were very bad. They said that they had a lot of government incentives to switch to more efficient appliances. I remember the numbers they crunched after the incentives were calculated - we would pay around $45 for AC and $45 per month for Furnace ($90 total). We thought it was affordable and was convinved it was needed for the house, so we went ahead and bought in. The government did come to do a inspection and gave us a $800 incentive check (around $2000 short on what they said would be given), and 2 years after, our bills now is $97 rental for AC and $97 rental for Furnace. I called a lot asking about the contract, and was told that we must pay this amount every month for another 7 years, then we can negotiate again, and the penalty to stop the contract is $7719.81+$100 for each, which would make 15600 to buy out of it. Looking back, it was a horrible decision by my wife and I to get into contracts like this without researching into it, the sales seemed to be very trustworthy. I'm honestly thinking about getting a credit line to pay the penalty to stop paying the rental, but I don't want to make anymore bad decisions. I'd love to hear suggestions from you guys before going through with anymore actions.

Thanks!
22 replies
Deal Addict
Jun 16, 2009
2628 posts
997 upvotes
Woodbridge
Please find out when the remaining amount of penalty will be 0 $ ( i.e when the contact will be up ?) . So lets say after 15 years you will not pay a dime. Total money paid during 15 years for both equipment will be close to 100X12X15= 18000. If my assumption is correct than its not worth to pay upfornt 15600 and owe the equipment.
HVAC Professional. Committed to customer, not brand.
Central Air Condition Group Buy-2021
Deal Addict
Feb 11, 2018
1670 posts
1341 upvotes
newlyborn wrote: Please find out when the remaining amount of penalty will be 0 $ ( i.e when the contact will be up ?) . So lets say after 15 years you will not pay a dime. Total money paid during 15 years for both equipment will be close to 100X12X15= 18000. If my assumption is correct than its not worth to pay upfornt 15600 and owe the equipment.
OP said that 2 years after being told he would pay around $45/month for each (IOW $90/month) he is actually paying $97/month for each (IOW, $194/month). Using your calculation that would be $194X12X15 = $34,920. And this is assuming the $97/month would never increase, which is extremely unlikely.

Actually OP has another 7 years at supposedly the same $194/month so that's $16,296 IF there is no increase in the monthly charge (which I doubt - but is possible). And after the 7 years he has to re-negotiate. To me this is a losing battle.

IMO OP is better off buying the equipment now and not take a chance given the kind of 'people' he is dealing with. BUT, OP must carefully read the contract to make sure there isn't any other charges and that he owns the furnace and a/c.

We really need to teach better math skills in schools. Face With Tears Of Joy
All the women I have loved have made my life more complete.
Jr. Member
Nov 2, 2015
180 posts
138 upvotes
Oakville
As someone who worked for Reliance as a sales rep (sorry everyone) , what has seemed to work with customers calling in and being persistent in saying none of this was brought up, none of this was clear, there's no way I'm paying this, I'm getting my lawyer involved, etc sparks a transfer to a department of Reliance who negotiates the residual value of the term. One of our guys had a customer get out of a contract and only paid $5000. The buyout is so high because the rental includes yearly maintenance visits, free filters, any and all repairs (factored into the cost whether it breaks down or not), accessories, Installation etc. The contract of Reliance is a 7 year term with a 6% depreciation value per year, so at 7 years you'd still have to pay 48% of the all in cost. Its robbery, it's a scam, and I left because they wanted us renting at 70% . Not to mention every company has their own form of rental and their job is to talk you into it and make it sound like the greatest thing ever. Just buy, or finance ... even the interest is better lol. Long story short be persistent and you might get a better deal
Penalty Box
Jun 24, 2015
4818 posts
1440 upvotes
0 downvotes
better to buy the furnace outright and finance it with a bank or lender my next door neighbour rented his before he sold his house now the new owners were in for a shock. yikes
Hi
[OP]
Newbie
Oct 22, 2019
8 posts
1 upvote
Thanks for your advice! Believe it or not I aced my math courses throughout high school and university... I just thought that people don't lie about things like this and I'm somehow protected and didn't look at the contract before signing (I have a habit of pressing agree without even checking the terms too). I'll do the math carefully and if everything checks out, get a credit line and get this thing over with. Thanks again
[OP]
Newbie
Oct 22, 2019
8 posts
1 upvote
Thanks so much, going to try to call in and see if I can get a deal. But I have tried many times and failed before. Can't tell ya how much we regret not thinking more critically about it and do the math, we kinda just trusted the sales when they mentioned the rebates, the actual costs, it's basically the same as financing the equipment and getting free maintenance and repairs.
Deal Guru
User avatar
Oct 6, 2010
14724 posts
9136 upvotes
Toronto
Start reading OP. You are not the first nor will you be the last. There's some really good information in this thread that should give you some pointers on how you can deal with your AC/furnace rentals.

great-water-heater-rental-scam-1126945/
DYI difficulty scale:
0-joke
10-no joke

¯\_(ツ)_/¯
[OP]
Newbie
Oct 22, 2019
8 posts
1 upvote
koffey wrote: Start reading OP. You are not the first nor will you be the last. There's some really good information in this thread that should give you some pointers on how you can deal with your AC/furnace rentals.

http://forums.redflagdeals.com/great-wa ... m-1126945/
Wow thanks for the info.

Update: Called the HVAC Company twice and they wouldn't budge on the buyout price. I contacted a lawyer regarding this matter, the lawyer told me that if it's within the first year of the rental, the customer can easily get out by law under the consumer protection act, we're well into our 3rd year so he thinks it'll be very difficult to get any kind of deals. Reliance senior manager called us back and basically gloated over the fact that it's now the 3rd year and there isn't anything we can do and that we're suckers. Face With Tears Of Joy Can't really say otherwise (we were very trusting and didn't do any numbers before hopping in), we're just surprised that this kind of thing can take place in a free society and marketplace, it sounds like a scam that would've been banned in 1993, going to be extra cautious in the future. If anyone knows of any ways we can help to stop these kind of companies I'd be all in.

Anyway, I did some calculations and it makes sense to get the buyout over with now, since we'd own the equipment after. The customer service rep told us that our contract isn't rent to own, so we can choose to either remove the equipment or buyout by the time the contract is over.
Deal Fanatic
User avatar
Oct 15, 2007
5178 posts
2594 upvotes
DongR3009 wrote: Thanks for your advice! Believe it or not I aced my math courses throughout high school and university... I just thought that people don't lie about things like this and I'm somehow protected and didn't look at the contract before signing (I have a habit of pressing agree without even checking the terms too). I'll do the math carefully and if everything checks out, get a credit line and get this thing over with. Thanks again
Being good at Math and financial literacy aren’t exclusive.
Nobody that knocks on your door trying to sell you something to save you money EVER has your best interest in mind
Everything has been said before, but since nobody listens we have to keep going back and beginning all over again. - Andre Gide
[OP]
Newbie
Oct 22, 2019
8 posts
1 upvote
Red_Army wrote: Being good at Math and financial literacy aren’t exclusive.
Nobody that knocks on your door trying to sell you something to save you money EVER has your best interest in mind
I agree 100%, I think we were just lazy and gullible. Great advice though we're going to be very careful from now on.
Deal Expert
User avatar
Feb 11, 2007
16179 posts
17603 upvotes
Oakville
DongR3009 wrote: Wow thanks for the info.

Update: Called the HVAC Company twice and they wouldn't budge on the buyout price. I contacted a lawyer regarding this matter, the lawyer told me that if it's within the first year of the rental, the customer can easily get out by law under the consumer protection act, we're well into our 3rd year so he thinks it'll be very difficult to get any kind of deals. Reliance senior manager called us back and basically gloated over the fact that it's now the 3rd year and there isn't anything we can do and that we're suckers. Face With Tears Of Joy Can't really say otherwise (we were very trusting and didn't do any numbers before hopping in), we're just surprised that this kind of thing can take place in a free society and marketplace, it sounds like a scam that would've been banned in 1993, going to be extra cautious in the future. If anyone knows of any ways we can help to stop these kind of companies I'd be all in.

Anyway, I did some calculations and it makes sense to get the buyout over with now, since we'd own the equipment after. The customer service rep told us that our contract isn't rent to own, so we can choose to either remove the equipment or buyout by the time the contract is over.
It's the free society and marketplace that enables this to happen. Everyone has personal responsibility for making their own educated decision. If it was heavily regulated or completely socialist, then the gov't would basically run the market and not allow other companies to operate.
[OP]
Newbie
Oct 22, 2019
8 posts
1 upvote
engineered wrote: It's the free society and marketplace that enables this to happen. Everyone has personal responsibility for making their own educated decision. If it was heavily regulated or completely socialist, then the gov't would basically run the market and not allow other companies to operate.
Normally if a company rips off people hard it doesnt survive in a free society and marketplace, I grew up in a third world country where companies get help from governments to rip off consumers leaving them no options. I've been spoiled in picking products without questioning the prices, since it usually is somewhat competitive already in its segment. This is a painful lesson for me.
Deal Addict
Mar 3, 2018
2037 posts
2055 upvotes
GTA
Basic policy now required in this new scam era. “Never buy anything at your front door or from unsolicited phone calls”. Except maybe girl guide cookies.
Deal Addict
User avatar
Jan 4, 2007
1438 posts
143 upvotes
GTA
If u ask them to remove the ac and furnace.whats the fee?
[OP]
Newbie
Oct 22, 2019
8 posts
1 upvote
speeeeee wrote: If u ask them to remove the ac and furnace.whats the fee?
They said that they cannot remove them, i can only choose to buyout or to continue rent.
Deal Addict
User avatar
Jan 4, 2007
1438 posts
143 upvotes
GTA
DongR3009 wrote: They said that they cannot remove them, i can only choose to buyout or to continue rent.
And if you buyout now, no warranty on either?
[OP]
Newbie
Oct 22, 2019
8 posts
1 upvote
speeeeee wrote: And if you buyout now, no warranty on either?
Yes if we buy out now no more maintenance and repairs.

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