Short answerRepair a furnace when it is under 15 years old and the failed part is an ignitor, flame sensor, pressure switch, inducer or blower motor. Replace it when the heat exchanger is cracked, when it is 20-plus years old and needs a major part, or when a repair would cost over a third of a new furnace. A cracked exchanger is never a repair; it is a carbon monoxide hazard.
Start with the one non-negotiable
If a technician has shown you a crack, a rust hole, or a flame disturbance test that proves the heat exchanger is breached, the decision is made. The heat exchanger is the steel barrier between the burning gas and the air you breathe, and a cracked one can put carbon monoxide into the ductwork. Replacing a heat exchanger is technically possible, but on anything but a nearly new furnace under warranty the part plus labor approaches the price of a new furnace, so the honest answer is replacement. Ask to see the crack with a camera or the test results; a reputable contractor will show you rather than ask you to take it on faith. We have told homeowners to get a second opinion on a condemned furnace, and we mean it. Carbon monoxide and furnace safety explains how exchangers fail and how the test works.
Everything else in this guide assumes the exchanger is intact.
Age and what it tells you
Gas furnaces in Southeast Michigan run about 1,800 to 2,500 hours a season across our 6,000-plus heating degree days. An 80% AFUE furnace that is maintained lasts 20 to 25 years; a 90%-plus condensing furnace typically lasts 15 to 20, because the secondary heat exchanger lives in a wet, acidic environment. A furnace from 2005 in a Pittsfield Township subdivision is in the back half of its life. A standing-pilot furnace from 1985 in a Wayne ranch is well past the average and running on luck.
Age by itself does not condemn a furnace. It changes the math on every repair, because a part you buy for a 22-year-old furnace is going into something that may need another part next winter. How long do furnaces last in Michigan has the detail by furnace type.
The part that failed
Sort the failed part into one of three buckets.
Small, routine, repair on anything: flame sensor, hot-surface ignitor, pressure switch, limit switch, rollout switch (after the cause is found), thermostat, 3-amp fuse, door switch, condensate trap, capacitor on the blower. These cost little, take under an hour, and say nothing about the furnace's remaining life. We fix these on 25-year-old furnaces without hesitation.
Mid-size, repair on a furnace under 15, think hard above that: inducer motor, blower motor, gas valve, control board. On a 2012 furnace, replace the part. On a 2003 furnace, you are spending real money on a system whose exchanger is at the age where cracks start, and the next failure may be the one that forces replacement anyway.
Major, replacement almost always wins: heat exchanger (primary or secondary), a cracked collector box on a condensing furnace, or multiple mid-size parts failing in one visit. A furnace that needs a board and an inducer and a blower motor the same winter is telling you something.
The one-third rule and the two-repair rule
If the repair quote exceeds about a third of the installed cost of a new furnace, replacement is the better value, because you are spending a large fraction of the money for none of the efficiency, warranty or reliability. And if a furnace over 15 years old has needed a mid-size repair in each of the last two winters, the third one is the point to stop.
For typical market pricing in Washtenaw and western Wayne County, a new 80% AFUE furnace installed with a permit tends to run in the low-to-mid four figures, and a 96% condensing furnace in the mid-four-figures to low-five-figures depending on size, staging, venting work and whether the AC coil has to be moved. Those are market ranges, not our quotes; furnace installation estimates from us are free and specific to your basement.
What a new furnace changes on the gas bill
This is where honesty matters. The AFUE gap between an old furnace and a new one is the main efficiency gain. A 1990s furnace rated at 80% that is now running closer to 75% replaced with a 96% condensing furnace cuts gas used for heating by roughly 20 to 25 percent. On a typical DTE heating bill for a 1,600-square-foot colonial that is noticeable, but it does not pay for the furnace quickly on its own. Replacing a 10-year-old 92% furnace with a 96% one saves almost nothing; do not let anyone sell that as an efficiency upgrade. Furnace efficiency explained: 80 vs 96 AFUE walks through the actual numbers.
Where a new furnace earns its cost is reliability on a minus-15 night, a parts warranty, lower CO risk from a fresh heat exchanger, and comfort from two-stage or variable-speed operation if you choose it. Federal 25C tax credits apply to qualifying 97%-plus condensing furnaces, and DTE Energy has offered rebates on qualifying high-efficiency furnaces; both shift year to year, and we check what applies when we quote.
How it plays out on real furnaces
The cases where we say "repair it." A 2010 Goodman with a dead ignitor: ignitor. A 1998 Carrier 80% with a cracked inducer housing and a clean heat exchanger: inducer. A 2008 Lennox condensing furnace with a plugged trap: clean the trap. A 1994 furnace with a bad flame sensor that a different company quoted a replacement on: a flame sensor, and we told the homeowner to budget for a replacement in a couple of years but not this week. If the exchanger passes, the house is warm, and the part is small, we fix it.
And the cases where we say "replace it." A cracked or rusted-through exchanger, every time. A 22-year-old furnace that needs a gas valve and a board. A 1980s standing-pilot furnace with a draft hood that spills, a burner compartment full of rust flakes, and a flame that burns yellow. A condensing furnace from 2004 with a leaking secondary exchanger. And a situation we see often in older Ypsilanti and Ann Arbor homes: a furnace that was wildly oversized when it was installed, short cycles all winter, and has cracked its exchanger early because of it. Replacing that one with a properly sized unit from a Manual J calculation fixes the comfort problem and the safety problem at once. What size furnace do I need in Michigan explains why the old furnace's size is not the answer.
Plan it in October, not January
The cheapest replacement is the one scheduled on your terms. If your furnace is over 15, have the fall furnace tune-up include a combustion analysis and a heat exchanger inspection, and ask for a straight answer on how many winters it has left. That gets you a year of warning, time to line up rebates, and an install on a dry 50-degree day rather than an emergency swap during a polar vortex when every contractor in Washtenaw County is booked solid.