To repair or to replace?
November 30, 2009 4:50 AM   Subscribe

To repair or replace? Should I repair a boiler with renowned reoccuring faults or replace it with a new reliable boiler with a 5 year warranty?

I am having issues with my boiler at the moment. It is an 8 year old Baxi 100HE and it's ignition is frequently locking out. It is a renowed fault with the Baxi range which I have read about in forums. The way to repair it involves calling out an engineer and perhaps having to pay for expensive parts to be replaced (not sure what the parts cost but on forums they were referred to as expensive). According to MoneySavingExpert.com boiler repairs and maintenance come to about £180 a year - but I guess if this boiler has a reoccuring fault it might be more, although of course I cannot be sure.

Do I sink money into this boiler by having it repaired and then perhaps regularly maintained after that, or invest in a new boiler by Viessman which I have read is reliable on forums and also comes with a 5 year warranty. This may cost about £1200 though for the boiler and the installation.

Cost wise they may end up amounting to the same over the 5 years based on conservative estimates, but since I do not have experience of hot water/heating systems on a long term basis I am not sure which is the most effective choice.

Also, even if the boiler is under warranty I suppose I will still have to have it serviced each year to ensure the warranty is not voided, so that would potentially be another £100 a year on top of the original £1200 installation.

Does anyone have any advice based on their own experience and knowledge?
posted by hjd to Home & Garden (3 answers total)
 
While I don't have any experience with boilers, I do have experience in risk management. I work for an insurance company. This isn't something I deal with very much--though there is such a thing as boiler insurance, which covers major machinery like this for commercial insureds--but the analysis is pretty straightforward.

This is a pretty classic risk management problem, and as a result, there isn't going to be an exact answer. Basically, you're wondering whether the cost of a new boiler will be more or less, over time, than the cost of maintaining your old one. You've got a couple issues to weigh against each other, but the main ones are risk of loss and timing of costs.

The risk is that maintenance is unpredictable. One year you could have no costs. The next you could spend £500. No way to tell until after the fact. Then again, the thing could break down completely, and you'd need to drop the £1200 after having already spent £200 the year before. It sounds like you're going to average about £180 a year, but again, this is an average, and without more data it's impossible to come up with something like an expected maximum loss.

There are two ways of managing this risk. The first is to retain the risk, i.e. pony up for maintenance costs as they arise. The other is to essentially transfer it to someone else, i.e. buy a new boiler and let Viessman bear the costs of maintaining that one. Retention has the advantage of probably being cheaper in the short run, but the downside of being possibly more expensive and inconvenient in the long run.

The unpredictability is a downside in itself, in that you don't know which month the maintenance costs are going to arise. This is where timing of costs comes into play. Maintenance could be needed this week, could be next, could be June, for all you know. Will that be a convenient time to pay for it? I don't know, and you don't either. You also run the risk of having the boiler break down while your in-laws are over, creating the risk of wife/girlfriend aggro. If you buy a new boiler, you know what your costs are, which makes them easier to plan for, and eliminates some of the more... humorous loss exposures.

So ultimately, the answer is "What's your appetite for risk?" You stand to potentially save a little money if you keep the old boiler, it's true. You also don't have to shell out £1200 right now, which you may or may not be able to afford at the moment. But by not replacing it you run the risk of both having your maintenance costs exceed the cost of a new boiler, and having those costs occur at times which are not convenient for you. Maybe the potential savings are important enough to you that you want to take this risk. Maybe you think not dealing with the hassle of babying your boiler for the next five years is worth any possible extra cost involved in getting a new one. Maybe you think that the risk of the boiler breaking down at an inopportune moment is small enough that you're willing to deal with it.

Personally, as it looks to be about a wash financially, and as keeping your current boiler exposes you to significant non-economic risks, I'd go with the new one in a heartbeat, provided you've got it in your budget to do so.
posted by valkyryn at 6:20 AM on November 30, 2009 [1 favorite]


Wow! Thank you Valkyryn for that outstanding clarity. We were working through that logic ourselves, but you've stated it beautifully. We'll be getting quotes for a new boiler!
posted by hjd at 6:49 AM on November 30, 2009


Don't forget to factor in the savings from increased efficiencies. Today's boilers are more efficient than those of eight years ago.
posted by caddis at 7:09 AM on November 30, 2009


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