The Great Rental Water Heater Rip-Off
My water heater broke down after 17 years of flawless service - and that is when I discovered I had shelled out two and a half times its value in rent, not counting the interest!
As a matter of fact I did’nt even know the heater was a rental; this fact was conveniently disguised in the utility bills as a “service charge”. Only by drilling down to the fineprint on page 3 was the item revealed as a rental fee.
The water heater is a very reliable piece of equipment; it has fewer moving parts than most of the mechanical devices in the home. All it does, essentially, is burn fuel and use the energy to heat up the water. It has no fans, no bearings and no compressor. And yet, utility company tell us it is worthwhile to rent water heaters because the company will take care of the “maintenance”.
The water heater itself costs a few hundred dollars; add installation and it might possibly be worth one thousand dollars. For this, I paid a rent of over twelve dollars a month, cleverly disguised as a service charge.Over 17 years, this added up to about twenty four hundred dollars not counting the interest.
No one rents the other mechanical equipment in the house like the furnace, the fan system, the air-conditioner, the refrigerator or the dishwasher. All of this equipment does require maintenance for which people shell out some money from time to time. By contrast, the water heater is almost maintenance-free and yet so many of us pay rent for it for its entire useful life.
Just one example of how large companies rip off the consumers on small things whenever they get the chance.
This drives me crazy too. But what to do about it. It seems they have us coming and going and they charge more ridiculous fees to get out of the rental contract. In my case, the power-vent gas water heater was installed by the builder in our subdivision — it was not a direct choice by me. I would love to stop paying them. A similar power-vent water heater can be purchased for about $600 last I checked. Like you say, I have payed for this one several times over and never a thing wrong with it.
Any advice for the best way to stop being a slave to these rental companies?
You should talk to your water heater provider and offer to buy it; I dont see how the provider can say no.
I got my heater from “direct energy”; the installer told me I could buy it outright for a thousand dollarsor, after one year, I could buy it at a depreciated price of eight hundred dollars. So it made sense for me to wait one year.
You should get a depreciated price, depending on the number of years it has been in service. If the provider does not agree, let us know or talk to some other consumer forum.
It doesnt make any kind of sense to keep on paying rent for a piece of equipment costing less than a thousand dollars.
I agree about the renting.
If the heater is electric, I don’t think it should cost more than $600 installed, maybe not even that much. If it is gas, then maybe it would be about $1000.
However, as far as electric heaters go, just try to get service for it! A couple of years ago, my husband felt that our water wasn’t hot enough (I didn’t agree) so we called Toronto Hydro who had installed it back when it was North York Hydro and they flatly refused - service only for rentals. We finally got Sears to come to look at it. (There was nothing wrong with it). I don’t think that Toronto Hydro is going to instal our next one.
Thanks for your post. It seems there is no point in buying the water heater from a utility, if they won’t service it. I guess, as usual, its a case of “buyer beware”.
It is best to buy the heater from some other company which is willing to provide the service. In our competitive world, there must be suppliers of water heaters who are willing to do this.
I’m not sure what to do. My house insurance says my gas water heater has to be replaced as it is 15 yrs. old. I’m currently renting from Direct Energy for $20/month.
Today the DE guy said he wouldn’t recommend buying as “the way they’re making them these days they’re servicing them every 2 yrs”. My neighbours purchased one and 2 wks after 1 yr. (the warranty period) they’ve had nothing but problems and been paying big.
To add to my problem my current rental is installed in the unheated cold cellar. That’s not allowed according to the DE guy today (and the eco-audit guy and a furnace installer) but he doesn’t know where it could/should be moved to, he’s sending his supervisor on Monday. Purchase prices have been about $1000. A tankless might solve the “where to put it” issue but its not very economical for a 1 person household. I’ve been here 10 years and never had a problem with the tank. DE will replace it but will charge me to move it, will have to see how much that is.
What to do, might get a lemon, might not. We’ll see what the supervisor says….
JayDee,
If you want to play it safe, you could rent the water heater from DE for one or two years and see how it goes. If you have no problems, then just buy it at that time at a reduced price.
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