Quick Answer
How should I price HVAC maintenance agreements?
How to price HVAC maintenance agreements from loaded visit cost, what plans typically charge per year, and why discounting the plan to win repair work backfires.
The short answer
- Cost the visits first: loaded tech time plus drive time plus filters and materials.
- Two-visit residential plans commonly land between $180 and $360 a year per system.
- The plan itself should be profitable; pull-through repair revenue is upside, not a subsidy.
- Monthly billing raises retention and smooths cash through the slow season.
Cost the visit before you price the plan
Two visits a year is usually 1.5 to 2.5 loaded labor hours plus materials and drive time.
- Loaded tech time per visit, including drive
- Filters, materials and consumables
- Admin cost of scheduling and reminders
- A share of overhead, same as any other work
Do not sell the plan at a loss
Plans priced below cost on the theory that repairs will make it up create an obligation to visit every customer twice a year for free. When the season gets tight, those visits crowd out paying work.
Bill monthly
Monthly billing converts a once-a-year decision into an ongoing relationship, improves retention, and delivers steady cash in the months when service calls are scarce.
Track agreements as their own revenue line
Separate agreement revenue in the books. It is usually the highest-margin line in an HVAC company and the best predictor of next year's replacement work.
Illustration: one-system, two-visit plan
- Loaded tech time, 2 visits
- $156
- Materials and filters
- $28
- Scheduling and admin
- $18
- Total cost
- $202
- Price at 45% margin
- $367 / year, or $31 a month
What this tells you: Example numbers. A $149 plan against this cost structure loses money on every visit before any repair work exists.
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In one sentence
Price from the loaded cost of the visits plus your target margin — commonly $180 to $360 a year for two visits on one system — and treat the pull-through repair work as a bonus, not a subsidy.
Related answers
Straight answers to the other questions hvac owners ask us.
How do you price HVAC jobs?
Start from the loaded cost of the job — labor hours, parts, and a share of overhead — then divide by one minus your target margin to get the price.
What is a good profit margin for an HVAC business?
Aim for 45% to 55% gross margin on service, 30% to 40% on installs, and 8% to 12% net profit for the whole company.
What markup should HVAC companies use on parts and equipment?
Most HVAC companies mark parts up 2x to 3x cost and equipment 1.4x to 1.8x, which lands them at 30 to 55 percent gross margin depending on the work.
What KPIs should an HVAC company track?
Track average ticket, gross margin by revenue line, billable hour percentage, close rate, maintenance agreement count and weeks of cash on hand.
How does job costing work for an HVAC company?
Job costing tags every labor hour, part and subcontractor cost to a specific job so you can see the gross profit of that job instead of a monthly average.
Run a different trade?
Questions people ask
Should the plan include a repair discount?
A modest discount, 10 to 15 percent, is common and helps retention. Price the plan so it stays profitable with that discount included.
How many agreements should a company have?
A useful goal is one agreement for every 8 to 12 service calls you run in a year. The exact ratio matters less than the trend.
What about second and third systems?
Price additional systems at a reduced rate since drive time and admin are already covered, but never below the added labor cost.
What does this cost?
One flat monthly price. No hourly bills, no surprises. Founding plans start at $149 a month, and your rate stays locked.
Keep reading
What is a good profit margin for an HVAC business?
Aim for 45% to 55% gross margin on service, 30% to 40% on installs, and 8% to 12% net profit for the whole company.
How do I manage HVAC cash flow in the slow season?
Set aside a fixed share of every peak-season week, go into the slow months with 8 to 13 weeks of cash, and know your monthly break-even before the phones quiet down.
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