water heater leaseing?? your opinions--pros and cons

Discussion in 'Plumbing Forum, Professional & DIY Advice' started by Master Plumber Mark, Nov 11, 2005.

  1. Just found out about this new progranm that
    Bradford White is backing to basically LEASE
    water heaters to people for 13.99 per month

    Its something like leaseing a water conditioner ...

    you get no up front charges, and the plumber gets
    his labor for the install from the leaseing company

    the heater is warrantied for LIFE and all service and
    maintaince is covered forever, ect...

    a few plumbers in this area have already signed up
    for it and I am wondering what other plumbers think of this????

    Believe it or not, I have already had two
    customers interested in doing this.. so you can
    move some heaters if you can be satisfied with
    just the labor costs.
    and your customers are strapped
    for money....

    their web site is http://www.awhr.com/

    people will spend 20 per month for leaseing a water softener
    and never , ever have it touched for over 15 years

    so I suppoose their are people who
    would be interested in doing this
  2. Bob NH

    Bob NH In the Trades

    New Hampshire
    What happens on sale of house?

    If I were buying a house with a leased water heater, or a leased water softener, I would discount my offer by the cost to buy out the lease or install a new unit. I certainly wouldn't accept a lease that I had to pay for.
    Assuming an 8 year life, you are paying more than $1300 for a water heater, and the seller has no incentive to give you the most efficient available.
  3. jimbo

    jimbo Plumber

    San Diego
    My parents in MA had a leased water heater for over 30 years ( not the same unit!). Did this make sense financially? NO. But the peace of mind it offered them made it worth every dime. This program is not for everyone, but some folks put a great value on warm fuzzy feelings.

    In our case, it was leased from the gas company. And whenever the heater croaked, the service was instantaneous. That is what they paid for, and as I said they would not have done it any different, and I never advised them to.
  4. leaseing heaters

    the rep for this company claims that you
    cant buy the heater, only take over the contract..
    They will come out and get their heater and let
    you install another one, or so they claim...

    I spoke to a rep today and he claimes that
    they have over 100,000 heaters already out
    there in the mid west.....

    now 100,000x 14.00 = thats 1. 4 mil a month
    every month for a long long time.....

    you can buy a lot of water heaters for that

    and it looks like all in all as long as I
    get paid , what the owner does is not my concern.

    some heaters might last 30 years if they are on a well
    and others might not last 6 but on avwerage they will most
    likely last 10 in which the heater is paid for probably 3 times

    $14 x 12 months x10 years ==$1680.00 not a bad scam!! WOW!!

    Also, with the bigger more expensive
    ones like 75 gallon power vents that cost
    $1500-2000 installled would be something that
    people would rather defer than cough up
    the money on

    it all depends on how long you
    plan on staying inthe house I suppose.
    Last edited: Nov 11, 2005
  5. toolaholic

    toolaholic General Contractor Carpenter

    Marin Co. Ca.
    my 2 cents

    i own nothing! even my socks are leased !
  6. hj

    hj Moderator & Master Plumber Staff Member

    Cave Creek, Arizona

    And if it is like most contracts like this, they will tell you how much you can charge to install the heater.
  7. That same rep called me as well. Told me 90,000 were installed in the area, wow, 10,000 more in 3 months.....pfffffft! I'm friends with a guy who works at a company that installs all Sears, Lowes, American Home Shield, and Home Depot water heaters in a 75 mile radius, they haven't installed one awhr water heater yet in a year. I can see this logic working; the phone company used to lease their phones, along with the other examples above. The rep doesn't state what happens to your profit to install if the customer moves within that first twelve months. I read the fine print on their sample contract; the contractor gets tied into the bad end of this deal. NO SALE FOR ME
  8. Cass

    Cass Plumber

    What are they paying to install 1
  9. what I understand it to be

    Well , I am waiting to see the fine print on
    this becasue it seems too easy at this point to me...
    but I have already grilled the rep-salesman on this already

    basically I install a Brad ford white 30-40-50 gallon heater
    either gas or electric and they pay me $300 for my labor.
    and they pay MY COST only for the unit....

    thats not too bad , basically they are paying for my labor
    only and I cannot jab them any extras for the heater...

    now the down side to this is its the same for a 66-80 electric
    or a 75 gallon gas too....a 75 gallon gas can take two big
    men and a boy to get it installed...

    Soooooo I probably wont be offering this program on the big ones unless
    the customer wants to pay some sort of up front extra charge

    but when you think of having to cough up 1500 -1800
    for a 75 gal power vent and all you got to lease one for is
    16 per month, the custumer might be inclined to pay a
    few hundred moer for the install. --with a lifetime warranty.

    this is to be ironed out more ---tomorrow afternoon.

    so at this time what I understand is ,
    if I need to make upgrades to the house or it is a difficult
    install I can charge an up front fee too if necessary.
    possible $50-100 up front charge

    so you can figure 300 for your labor, and possibly
    something more for a pan or extras.....

    My way of looking at it is if you are going to lose the
    sale anyway , you might as well throw this option at them
    as a last ditch effort to salvage the sale and make $300

    and this would certanly keep the wheels moveing when
    things appear to be getting slow

    So if you do 5 or 6 of these a week, or even a month,
    that kind of extra labor money can buy you a lot
    of tacos...

    now , does that sound reasonable or not???

    So what is it worth to install a heater
    and walk away from it, not having to warranty it
    or anything else, anyway??

    Your opinions PLEASE!!!!
    Last edited: Nov 13, 2005
  10. Cass

    Cass Plumber

    This sounds good, very good. I would like find out more. Does you rep have a phone #.
  11. go to the web site

    I will try to get it for you

    My Bradford White Rep hooked me up
    with the guy, so I suggest you get hold of the
    BW rep in your area and see if they are offering it in
    your area

    but go to the web site and see if they
    are in your area ..

    you can leave your informaiton there
    for someone to call you back.
  12. jeffreyhel

    jeffreyhel New Member

    Master Plumber Mark You said they will pay you $300 for a heater. What about water heaters that are not up to code, chimneys that faulty, copper gas lines that need to be changed to black pipe or better or all of the other problems that you get into installing water heaters. What about permit costs? How much do you get for going back on a service call at 2 am? If they need a new water heater in 5 years do you get another $300 for installing another heater. What happens when the customer sells the house next year or the mortgage company takes over the house in foreclosure ( ya I know I was really reaching with that one) I am just curious. I just have a hard time having someone else dictating the rules.
  13. very good questons to ask them

    Thank you for the good questioins to ask today.

    basically they pay for the install

    and again anything EXTRA like things you
    mentioned are between you and the customer
    I suppose you might want to check out the install
    before starting the job.

    Because the HARDWARE stores in our area literally slap
    heaters in without even the slightest concen about
    meeeting codes, takeing out permits, high pressure issues,
    water heater pans, thermal exp tanks, ect...ect

    The rep I spoke to said all that was EXTRA to the price
    if I wanted to pursue it....or not.....that was my call.

    The mid west area --Indiana, Illinois, Ohio is basically like the
    Wild west The harware stores in our area can basically get
    away with MURDER...literally anything goes.....and its
    pertty frustrating to have to compete with them....especially
    when they dont care one bit about codes ect..and they send
    19 year old sub contractors out to install the heaters..

    obvious and dangerous problems like bad chimmneys, ect
    are another issue that would have to be ironed out with the
    customer BEFORE you start... that is just COMMON SENSE

    I tell my guys to CRY FOUL and time out
    BEFORE they start a job that
    has obvoius issues....

    My biggest concern would be their CREDIT rateing and
    if they are appproved, and that is all done BEFORE you ever start.

    but basically I got the feeling all they really needed
    was a pulse......

    as long as it dont take all day on the phone to get them approved...

    What I understand at this time is you install
    their heater and they pay you to service the unit
    for them and they pay you anywhere from 0-28 years
    from now to install a new
    one if it leaks....I assume its the same amount ..

    I will ask them that question too...

    service issues are paid by them too.....
    during normal working hours,
    and I understand I dont have to service what I
    install if I so choose... like POWER VENTS ect....

    they have others in this area that will do the service
    call backs if I dont want to...I am told.
    now I will ask them if I am expected to service the uint
    for FREE for my normal 2 year labor warranty...

    I dont think so..... I am not makeing anything on the heater

    but its a good question to ask.

    The one BIG glitch I am wondering about is when a house
    is sold , they claim its transferrable and if the new
    owner does not want to take over the contract
    then they have you go out and take out their heater..for $$??
    and the buyer and seller have to come to some
    arrangement on settling up,,

    ---this puts you in the middle again and I suppose if
    you look at the bright side of the coin, you can sell
    another heater to the new owner "at a discount"
    if he dont want the lease......
    you will be there anyway takeing out the
    leased unit, so why not ask ??

    what they pay you I dont know, yet..
    another good queston for me to ask
    What I preceive here is
    basically they just want a bunch of DUMMIES like me
    to install heaters for them so they can ----over time---
    make vastly big money on the lease......

    I understand at this time that
    they will field all the problems because that is why
    they are doing this in the first place ......to make money...

    if you got 100,000 heaters out there and they are sending you
    14 per month thats a lot of money, 16,800,000 per year.

    some heaters last 25 years , some only last 2, those are the odds.
    But the odds are certanly stacked waaayy in their favor here....

    I am sure that their goal is to double -tripple that amount over time...
    and the quicker , the better for them..


    I feel this is like writeing
    my pre-nup all over again...

    you are not going to think of everything.

    also you can
    go to their web site and ask them yourself
    if you think of any other questions
    Last edited: Nov 14, 2005
  14. hj

    hj Moderator & Master Plumber Staff Member

    Cave Creek, Arizona

    IF you are going to go for this deal, you might as well also sign up with Lowe's and Home Depot, because it looks like it is the same thing. You don't make anything on the heater or parts and just work for labor. The only way to "come out ahead" is to make sure as many heaters as possible do not qualify as "standard installations" so you can add on the extras, after the customer is committed to having you put it in. And I doubt that the lease for a power vent is the same as for a 40 gallon electric. They may be screwing the customer, but they definitely know how to avoid doing it to themselves.
  15. toolaholic

    toolaholic General Contractor Carpenter

    Marin Co. Ca.

    if you install for home depot do you have to wear on of those orange aprons ? :D
  16. hj

    hj Moderator & Master Plumber Staff Member

    Cave Creek, Arizona

  17. Bob NH

    Bob NH In the Trades

    New Hampshire
    Get Your Crap Out of Here!

    The only way to "come out ahead" is to make sure as many heaters as possible do not qualify as "standard installations" so you can add on the extras, after the customer is committed to having you put it in.

    If I ordered something like this and a plumber tried to add extras to "come out ahead", I would call Home Depot or the rental place and tell them to get their stuff and their installer out of my house.

    I walked away from a car deal when the salesman tried to add a $20 fee for the guy who does the paperwork after we had negotiated a price. The salesman tripped over his chair trying to catch me going out the door.
  18. Cass

    Cass Plumber

    I think that he meant to find as many Code Required up grades. This is always an additional cost above and beyond WH instlation costs. Instlation costs are just that , the cost of installing the heater, not other work. When I install a WH even removal of the WH is additional. Removal = moving it anywhere beyond next to the new one. The problem is people sign up to have Lowes install their WHs without having anyone look at the job first.
  19. hj

    hj Moderator & Master Plumber Staff Member

    Cave Creek, Arizona

    Not just code required ones. ANYTHING they can think of that the customer might agree to, such as a drain pan under the heater, plus a drain line to the exterior, putting it on a pedestal, or if it is on a platform then it requires an additional man to remove it, etc.
  20. boy, did I start something here.......

    the only down side I have
    found so far is the paperwork .involved

    once you install the heater, the unit belongs to
    them and they will pay you for any future service calls

    so you dont have to warranty the
    unit after it is installed...its their problem

    basically if the customer does not want any upgrades
    they just sign off on them and its noted in the contract.

    thats about what I do already, I dont force the customer
    to cough up more money for upgrades , I give them prices
    but let them decide if they wish to make them or not.

    Of course it all has to be ironed out up=front before you
    start the job ----if you are wise....

    I look at all this as the last ditch effort to save a sale that
    is going out the door anyway.

    It really depends on how slow you are
    and how much paper work you are willing to wade through...
    Last edited: Nov 14, 2005
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