When To Repair, Replace Appliances

by Broderick Perkins DeadlineNews.Com Energy efficiency built into new major appliances has become a compelling factor in the debate over repairing or replacing aging major appliances. For years, the major appliance repair-or-replace rule-of-thumb has been: if an appliance's repair estimate is 50 percent of the cost of a new replacement and the item in need of repair is seven to 10 years old or older it's probably a good idea to replace it, according to Mike Kozlowski, director of product service engineering for Chicago-based Sears, Roebuck and Co. In the past, that's been because of the cost alone. Two repairs that each cost half the price of a new appliance get's you a working, but outdated appliance that is more likely to break down again. Today, some new appliances are so much more energy efficient than older models, they warrant breaking the repair-or-replace rule-of-thumb. "When it comes to refrigerators, even if it is four, five or six years old, there's a very strong argument to replace it with an Energy Star model," said Kozlowski. The refrigerator is the biggest single power consumer in most households and the newest Energy Star models use half the power of a 10-year-old model, according to the U.S. Department of Energy's Energy Star division. "If you have a unit that is 20 years old, you may be spending as much as $100 a year just in the operating cost. A new model with average energy efficiency costs in the $35-a-year range," says Jill Notini, spokeswoman for the Washington, D.C.-based Association of Home Appliance Manufacturers (AHAM). Only the most energy efficient home appliances earmarked for the federal government's program are emblazoned with the Energy Star logo. Energy Star labels have been affixed primarily to refrigerators, but also fewer models of dishwashers and clothes washers. Even models not yet eligible for the Energy Star label and appliances that don't participate in the program -- clothes dryers, ovens, and ranges -- are all much more energy efficient than years ago. Making the repair-or-replace decision Beyond the energy efficiency considerations, the repair-or-replace decision can get tricky. Deciding depends on a host of factors including age, repair costs, replacement costs, hidden costs and new technology. It's a no-brainer if the appliance is still under warranty. Chances are such appliances that break down are new enough to be energy efficient and the repair cost will be zero or negligible at best, says Kozlowski. Later on in an appliance's life, repair costs become out-of-pocket expenses that demand scrutiny. The average useful life of a major appliance is about 14 or 15 years, but it varies depending upon the item -- 14 to 19 years for refrigerators and freezers; 14 to 18 years for ovens and ranges; 11 to 13 years for dishwashers; 11 to 14 years for clothes washers; 13 years for clothes dryers, according to AHAM. Typically, a few years or more before the end of an appliance's useful life, repair costs will begin to reach the point where the traditional repair-or-replace rule-of-thumb should be considered -- with perhaps one exception. Labor accounts for 75 percent of the cost of repair and a handy person may be able to repair the item at a substantial savings. A Canton, MI-based do-it-yourself appliance service and repair Web site says owner-completed-repairs are an often overlooked option for property owners with appliances that are out of warranty, but perhaps not quite old enough to generate repair bills large enough to warrant buying a replacement. "You can save up to 75 percent of the cost of a repair by doing it yourself. Usually, the parts you need are inexpensive. A good rule-of-thumb is if your machine is five years old (about one-third of its expected life), don't spend more than two-thirds of the replacement cost on the repair," says Linda Aubuchon, spokeswoman for RepairClinic.com. That assumes, of course, the item is not still under warranty. "When you consider warranties with appliances, if you remove panels and use a screw driver or other tools you could void the warranty," says Kozlowski. In any event, when weighing repair and replacement costs, don't overlook special expenses including delivery and installation costs and fees to remove and dispose the old appliances. Owners and managers of older apartment complexes may also have to consider special costs associated with replacing built in or smaller-sized appliances with larger appliances that may not fit through doors or past railings. While you are tallying energy savings, don't forget to include savings from recycling and energy efficient product rebates available from retailers, local utility companies and local governments. Finally, you may not be able to put a dollar amount on new features, but conveniences such as quick-chill compartments and water dispensers in refrigerators and automatic dishwasher cycles can add user value to the appliance -- provided the features will be used. Don't pay more for a feature-laden appliance if you deem the features too frivolous. Likewise, don't overlook the value of appliances with the latest features as selling points for your rental units. Copyright © 2005 DeadlineNews.Com -- Broderick Perkins, is executive editor of San Jose, CA-based DeadlineNews.Com, an editorial content and consulting firm. Perkins has been a consumer and real estate journalist for more than 25 years.