Rent Vs Own: A commercial HVAC case study

As a business owner, you want to lead and succeed, but unexpected changes inevitably happen that can cause a lot of unwarranted stress and affect day-to-day business activities. Here at Service Experts, We’ve been working hard trying to find ways to help business owners and businesses save money while also giving you, our customers, peace of mind so you can focus more on growing & managing your business.

With our Advantage program, you can now stop worrying about unplanned capital projects that eat away at your bottom line, and easily upgrade your HVAC and other related mechanical equipment hassle-free. The program is designed as an alternative to buying and is a convenient option for business owners who don’t want to worry about any upfront payments, ongoing maintenance costs, expensive repair service calls and unplanned equipment replacements that can arise when owning the equipment. Now with the Service Experts Advantage program, you can count on both savings and peace of mind, year after year for a low monthly price similar to what you pay for a cell phone or any other business product you rent/lease such as a printer for your office and uniforms for employees.

You may be asking yourself why would I want to rent HVAC equipment for my business?

Here is why:

To start, if you bought the equipment outright, which is still a great option depending on your situation, once that equipment is installed the equipment value depreciates instantly and adds very little value in terms of property value. Then as the owner of the equipment, you’re responsible for quarterly/bi-annual maintenance, service calls and parts replacements in the scenario something in the system fails and breaks. Why would you want that stress? Exploring the Advantage program as an option can save you over $15,000 in energy-related cost over 10 years1, we have crunched some numbers to help you understand how it works2:

YEAR 10 – COSTS & RECOVERY PAY-TO-USE5 PURCHASE5
PURCHASE PRICE PLUS INSTALLATION6 $0 $14,429*
MAINTENANCE & REPAIRS7 $0 $12,309
RENTAL COST9 $31,594 $0
INVESTMENT INCOME (-$3,511)* $0
TAX RECOVERY SAVINGS3-4 (-$8,732) (-$4,229)
TOTAL OPERATING COST $19,711 $22,509
*when you consider the purchase price of $14,429 (Carrier WeatherMaker 48TC unit) with 2.14% interest rate (Canada bond rate). It adds up to $17,940. Through renting, the difference is $3,511- more savings for you.

The Advantage program is a no-brainer for business owners, you receive new, energy efficient equipment installed and backed by industry leaders10, 24/7/365 priority service, zero up-front costs11, zero parts and labor charges for repairs11. The best part about the program is the fact that you create a favorable tax credit, and the monthly payments can be written off in taxes when that time of year comes around. Another benefit the Advantage program offers your business, is affordable monthly payments on your Enbridge Bill12.

In the scenario here, the monthly payments would come out to $235 per month9, for a 4-ton unit. Every customer’s situation will be different but this Scenario outlined here gives you a good understanding of the program and all the benefits that it has to offer your business.

Take advantage of this innovative service and safeguard you and your business from future headaches resulting from your current HVAC equipment and get into new, efficient and hassle-free HVAC equipment. We’re making Business decisions easier and less expensive, so you have more time to focus on growing your business. Leave the rest to the Experts.

1 Some limitations apply. See rental agreement terms and conditions for details.

2 Some limitations apply. See rental agreement terms and conditions for details.

3 The estimated tax deduction is calculated over a 10 year period as the undepreciated capital cost of equipment, (assuming an original total purchase + install cost of $14,429), multiplied by an estimated capital cost allowance rate of 4% plus required repairs and maintenance costs, assuming they are expensed in the year incurred. The tax benefit is calculated as 26.5% of the tax deduction.

Information provided by Enercare Commercial Services is for informational purposes only and is not intended to provide financial, legal, accounting or tax advice and should not be relied upon in that regard. Actual tax deduction and benefit may differ. A qualified professional should be consulted for financial, legal, accounting or tax advice.

4 Estimated tax deduction is calculated over a 10 year period as rental costs ($31,594) associated with rental equipment. Tax benefit is calculated as 26.5% of tax deduction. Information provided

by Enercare Commercial Services is for informational purposes only and is not intended to provide financial, legal, accounting or tax advice and should not be relied upon in that regard. Actual tax deduction and benefit may differ. A qualified professional should be consulted for financial, legal, accounting or tax advice.

5 Case study assumptions are: 1) An install cost of $3,000 (including labour and crane rental). 2) Tax recovery rate of 26.5%. 3) Associated cost escalator of 2.5% yearly.

6 Plus applicable taxes. Purchase price is based on a Carrier WeatherMaker 48TC with standard installation.

7 Maintenance cost based on Enercare Commercial Services’ standard annual expense of $289 per year for a Carrier WeatherMaker 48TC unit.

8 Assuming the following: Labour: 5h/year at $125/h = $6,250 Filters: $200/year = $2,000 Belts: $100/year = $1,000 Parts: $500/3.5 years = $1,750. Estimated parts and labour costs based on common equipment failure over a 10 year period. Parts and labour costs are based on the current rates and take into consideration a 2.5% inflation increase in years 2-4, 3% increase in years 5 onward over the 10 year period. Actual costs may differ.

9 Plus applicable taxes. Rental cost is based on a rate of $235 per month on a Carrier WeatherMaker 48TC unit rental with standard installation, with an annual increase of 2.5%. Some limitations apply.

See rental agreement terms and conditions for details.

10 View our guarantees for details. http://www.enercare.ca/commercial/business-comfort-guarantee

11 Some limitations apply. See rental agreement terms and conditions for details.

12 Only available in Enbridge Gas Distribution Inc.’s billing territory.

® Enercare and the design are registered trademarks of Enercare Inc., used under license.

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