In Hot Water? Get Out!

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by Howard Moscoe

Water Heater

When I stepped into a rusty puddle in my laundry room I knew that it was time for a new hot water heater.

I thought “Consumers’ Gas” but no, they’re out of the hot water heater business now…they transferred their holdings to Enbridge home services who in turn sold them to Direct Energy who just sold them to EnerCare. They all piggyback onto the same gas bill. Confusing? Most shell games are.

Yes,” the salesman said;” we can rent you a 40 gallon tank for only $24.99 a month. You get free installation, the first three month’s rental is free, and we will throw in a MasterCard with a $200 credit on it”. It was then installed in my home within two days.

In 2014 the Ontario Ministry of Consumer Affairs received over 1,700 complaints about water heater rentals and removals. I’m not sure why or how this happened but it has been estimated that more than 1.2 million Ontarians rent their hot water heaters.

Think about it. Why would anyone rent a hot water heater? Would you ever consider renting other appliances like say your dishwasher or your TV? Ah yes, you say, but if you need service it is their tank and service will be at their expense. When was the last time you had anyone service your hot water heater? There are few if any moving parts. It’s just a big tank that sits there and heats water. The most common problem with hot water heaters is that they rust out and leak after fifteen or twenty years. They usually don’t need any servicing at all.

By the time I signed the contract the rental fee had climbed to $29.99 per month and the free installation was to cost me an extra $200 because they had to put a hole in my basement wall. (Why I would have to pay to install their tank is a mystery to me.)

Then I did the math.

In the first place, I was stunned to learn that under my contract, the rental fee was adjusted annually by the rate of inflation. Assuming a 1.5% inflation rate the monthly rental payment would escalate to $37.47 +tax = $42.35 at the estimated life of the tank (15 years). The tank would have cost me $6,786.29.

Would you be surprised if I told you that the same tank (including installation and tax) if I purchased it at Home Depot would cost $1,300 including tax and installation? I could purchase 5 hot water tanks for the same price as the rental of one tank.

Fortunately, new Consumer regulations on hot water contracts in Ontario came into effect on April 1, 2015. They extended the cooling off period for cancellation of these contracts to 20 days without penalty. You can guess what I did.

So, what does this mean for you?

If you rent your hot water heater telephone Direct Energy (which is now EnerCare) or whoever else owns your tank and ask them the buyout price for your present heater. They can be reached at 1-877-334-1846 (or 1-800-266-3939).

Then consider how much you would save buying back the heater from them. Yes, they will try to scare you with dire warnings about you assuming responsibility for maintenance and repairs….so what?

All that will happen is that you pay their buyout price, the rental fee disappears from your bill, and the water heater remains where it is, and continues to deliver hot water as it always did.

The most insidious thing about these rental contracts is that they go on forever. If you have lived in your house for a long time you have likely been paying this rental long enough to have purchased a whole kitchen worth of new appliances.

If you can squeeze an extra five years out of the existing tank you will save five years of rental.

Then, when it starts to leak; don’t rent a new one, BUY IT.

Will you consider buying your water heater? E-mail us your thoughts at info@downsviewadvocate.ca

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