Boilers can be expensive. A new one can set you back around £2,000, according to the Energy Saving Trust, and the cost of installation can push the price even higher.
So if you can’t afford to pay for one upfront, what about renting one out and paying a monthly fee instead?
One company offers just such a scheme, which covers a boiler and all parts of your heating system against breaks, repairs and damages.
You also own the boiler after the 12-year lease has ended and a yearly service is added in.
So is this a good solution to avoid having to stump up the cash? Or are there other costs that make it much more expensive?
We’ve sifted through the paperwork to find out exactly how much each option would cost, and the pros and cons of each.
How does leasing a boiler work?
The company Hassle Free Boilers says it’s the only one in the country offering a lease scheme for those wanting to buy a new boiler and a service plan.
It was set up in 2006, as part of the Ecovision Renewable Energy Group, and says that since then it has installed more than 7,000 heating systems across the UK.
For your monthly fee you’ll get: the upfront cost of the boiler, the cost of the service plan which includes annual servicing, repairs and unlimited call outs and a lifetime ‘fix or replace’ boiler guarantee, an annual gas safety check and the installation costs.
You pay every month for 12 years, and then at the end of the term you own the boiler. If you move house within that time, the new homeowner can take on the agreement, or you can cancel the plan – for an agreed fee (which is usually the remaining balance of what is owed on the boiler).
Jacob Kowalowski, spokesperson for Hassle Free boilers, says: ‘One of the things that appeals most to our customers is that we offer a ‘no upfront payment’ option; whereas once if you needed a new boiler you had to part with a considerable sum of money, this is no longer the case.
‘This is especially helpful when you consider that roughly one in six homes are heated by boilers that are 10 years old or older; meaning they fall into one of the lower bands of efficiency.’
How much does it cost?
To take out a new boiler and service care plan with HFB you’ll need to give it some of your financial details and it will run a credit check to make sure you are able to make the monthly payments.
What are the alternatives?
The main alternative to leasing a boiler out is to pay for it upfront. According to the EST it could set you back around £2,000 although costs vary depending on the make and model.
You will then need to pay for the installation on top – which can cost between £500 and £2,000 depending on the type of boiler you are installing, and the one you are replacing.
If you don’t have the money to pay for a new boiler upfront, there are other options to consider, such as taking out a loan or using a 0% purchase credit card.
Although with both of these there’s no guaranteeing the rate you’ll be given – as it will vary depending on your own financial circumstances – and if you do take out credit to pay for your boiler, you need to make sure you’re able to pay it back to avoid interest charges and late repayment fees.
Personal loan rates are at record lows at the moment for those with good credit scores, while some credit cards offer 0% interest on purchases for several months.
Rob Walsh, a landlord from Maidenhead, took out an agreement with Hassle Free Boilers 14 months ago and he says it was a better option for him rather than paying upfront.
‘In some of the homes I rent, there were standing storage boilers which are not very reliable and can be costly to repair or replace.
‘To get the whole thing replaced it would’ve come to around £3,000 as the boiler needed new pipes put in and to be moved.
‘Paying out this much would add up to a fair bit of money, as some of the boilers in my houses are around 12 years old and ongoing repairs can cost a few thousand pounds per year to keep going.
‘Therefore continuing to repair them would have been more expensive than replacing them.
‘I signed up to a 12-year plan with HFH and if I sell the house before this is up I will need to pay off the remaining balance of what is owed.
‘I pay £40 per month including a yearly boiler service and gas safety certificate so that saves me around £1,000.
‘Originally I had a care plan with Homeserve but it wouldn’t fix my older boiler because there was a £250 limit for repairs.The quote I got from British Gas in one house was more than £6,000 for the entire heating system and boiler which was ridiculous.
‘If you add it up, it’s actually not a bad deal compared to paying out £3,000 for a new boiler and a care plan which can be around £20 per month depending on which company you choose – and the yearly service and gas certificate.
‘Paying out £3,000 upfront is a bit of a hit on anyone’s cash flow so the monthly payments are a huge benefit.’
If you want to add a service plan to the cost, this will cover the repairs and replacement to the rest of your heating system. According to uSwitch the cheapest plans start from £5 but the amount you pay depends on the level of cover you choose and the company you buy it from.
For example, for £7.50 per month you could take out a plan with HomeServe which includes unlimited call outs and claims per year, cover for the boiler, thermostat and controls and the central heating system but there is a £95 excess to pay on each claim you make.
While if you increase this to £10 per month, also with HomeServe, you will get the annual boiler service included and the excess is lowered to £50 per claim.
However, before going down this route first decide if you actually need it. You may already be covered through your home insurance so check this first before you think about boiler cover.
Most boilers also come with a guarantee, often of five or even seven years.
How do the costs differ?
The overall cost you pay depends on the boiler and service plan you choose and therefore it’s impossible to be exact when comparing costs.
However, based on the £39.99 per month plan, you are likely to be looking at paying almost £6,805 over the 12-year lease. Compare this to the cost of buying a boiler upfront and paying the installation cost, which could cost around £3,000 in total.
Already the saving here is almost £4,000 which is a significant difference, yet the service plan isn’t included.
If we add in the cost of the service plan over the 12 years, and take as an example the £10 per month HomeServe plan, this adds on £1,440 to the total bringing it to a potential cost of £4,440.
If you also throw in the yearly gas safety check, and certificate which is £75 per year or £900 over the 12 years choosing HFB could still cost you around £1,465 more.
It’s worth noting that it’s unlikely you would pay the same amount for the service plans over the 12 years, as these are usually renewed every year. There are also extra costs for paying out an excess if you claim which haven’t been included here.
Mr Kowalowski says HFB is there for people who don’t have the money upfront and he says: ‘We’re not only looking to change how boilers are bought but we also aim to refine the boiler installation process as a whole.
‘A broken boiler or failing heating system can result in hundreds, if not thousands, of pounds in repairs. Whereas we offer full cover and peace of mind for the genuinely affordable amount of £19.99 a month.’
Is there another way to get a free or cheap boiler?
Many energy suppliers offer support for replacing broken or inefficient boilers, for householders in receipt of certain qualifying benefits, according to the Energy Saving Trust.
The support may not cover the full cost of the boiler replacement, so you may still need to make some financial contribution. If you think you may be eligible, you should phone the Energy Saving Advice Service on 0300 123 1234, or for Scottish households, Home Energy Scotland on 0808 808 2282.
There are also many local schemes offering support for home energy improvements. You could also contact your local authority to see if there is any appropriate support in your area.
If you are looking for new boiler finance, contact APG Boilers on Finance.