Just the other day, I was browsing the Personal Finance bookshelves at my local Chapters store and leafed through a book titled The Smart Canadian’s Guide to Building Wealth. I almost skipped over a chapter that advised against renting-to-own when I noticed a sidebar titled “A Note to Ontario Homeowners”. The note asked why the vast majority of Ontario homeowners are wasting their money renting their water heaters.

I must confess that we fall in the category of renters and it never occurred to me that we could buyout the rental. The heater in our home is over 15 years old and is likely in its last legs. I found that Direct Energy charges us $13.99 plus taxes for the rental and it would only cost us $25 for a buyout (owing to the age of the heater). I went ahead and purchased the old heater and I am hoping it would last a year or two. If it breaks I will just buy a new heater and have it installed by a professional.

New Heater: Less than $1,000 installed. Rental Heater: $13.99 (in today’s dollars) over 15 years = $2,500. Owing your own water heater: Priceless.

This article has 64 comments

  1. Or at 3.25% compounded annually (not including rate increases) $3,230! Plus you would likely install a high efficency unit and save even more!

    DAvid

  2. I had never heard of anyone renting a water heater…this must be unique to Ontario. One wonders how the practice got started. A word of advice though, at 15 years of age, the water heater is past replacement age and is very energy efficient, as it is now full of corosion. For highest energy effeciency, experts recomend replacing a water heater every 5-10 years. Of course there is new waterless water heaters that a more energy effiecent as they hook right to your pipes, don’t hold water and thus only heat water when you actually need it. They are more costly upfront, but the savings in the long run could be priceless, when you see your energy bill go down.

  3. hmmm… interesting. Reminds of when my parents used to rent their phones from the phone company. Who knew Canada had the monopoly on water heaters?

    by the way, regarding your question about WordPress and preposting… all you do is click the edit timestamp box and then pick a date/time in the future. You hit the publish button but it will not post until the date/time that is stamped.

    Hope that helps!

  4. Canadian Capitalist

    The book mentions that Ontarians mostly rent their water heaters and people in the eastern part of Canada have caught on to the fact that it is far better to own.

    Nina: Thanks for the info. It is very helpful.

  5. Excellent Post! I just called Manitoba Hydro and bought my rental water heater for $73. I was renting it for $6/mth. I should see the benefit in 12 months. The woman I spoke with said that I had a rare 60 gal, all copper tank that will last me a long time.

    Thanks for the helpful post.

  6. One of the income trusts in Ontario derives a substantial portion of it’s revenue and profits from renting water heaters. Maybe one should invest in them!

  7. I’ve never heard of renting a water heater. How bizarre.

  8. I was informed by a friend at work who said tht today’s water heater tanks are made of steel. These tanks will eventually rust and break down. Company’s that produced the long lasting all copper water heater tanks are now out of business. Go figure.

  9. Canadian Capitalist

    Paula: Renting water heaters is common in Ontario. Every one I know rents their heater.

    Ahmed: Our tank is a steel one. Hey, they have a nice racket going here. Selling us steel means we will replace them every so often!

  10. There is certainly a monopoly going on here in Ontario, they aquired all of our existing water heaters form Union Gas in the 1990’s at a low cost and charging us a small fortune for rent ever since. The maximum age of a water heater is 18 years and they’re not suppose to charge rent for them after 18 years but they keep sending the bills. I think it’s their greatest secret and their greed will cause their demize. Everyone renting should be informed about this expiry period.

  11. This is great stuff hope you don’t mind if I add an important bit of information. The tanks get ruined by the untreated water! Call your local Culligan Representative and have the problem solved. Now you can buy your tank it will last almost forever. You will save because it requires less energy and money to heat the water without hardness (rock). The new efficient instant heaters will be protected from hard water also.
    Have a Waterful Day

  12. When a water heater is older than 8 years, bascially there will be rust and bacteria inside the water heater, which will slow the effiency of the water heater down, that means you waste energy everyday by using a old water tank, don’t say it still work, just compare the gas bill

  13. We rented our water heater for 16 years from direct Energy in ontario, Problem is if it leaks and ruins your floor or rugs they do not want to pay to replace this they try to tell you to go through your own Insurance Co for the full amount that puts a claim plus deductable on you. I am dealing with this for the last few months..I think I will have to take it to court to get it solved. They should have replaced this water heated it was passed it age, Thats why you rent because they are suppose to know more about water heated and I have paid at lease 2-3 times for one for the idea that they would take care of everything. Right fooled again.

  14. sue: I’m not sure what the rental agreement says. I personally think that it is better to own the water heater and use emergency funds to address any issues.

  15. Have to add my two cents…I’ve installed rental water heaters for 18 years, personally, I think everyone should buy their own. The service one receives from most rental companies, isn’t very good. People often wait 3-5 days to have their leaking tank replaced. The companies don’t want to replace the heaters, and often send service men countless times, to try to repair a tank that is far to old. It’s quite surprising how many people don’t realize how easy it is to switch rental companies or buy their own. There are many different rental companies out there. Reliance, National, Direct Energy, Live Green…just to name a few. Of course, these are all based in Ontario. Also, buying a tank is as easy as going to your local Home Depot, Lowes, Rona, Sears, Home Hardware, Canadian Tire…
    Most insurance companies now say they will not cover a water heater older than 12 years, for water damage. The life expectancy of a gas water heater is 12 years.

  16. Renting a water heater makes no economic sense; how many of us rent refrigerators or dishwashers?

    See the article in http://www.wecanadians.com about the rental water heater rip-off.

  17. Advice for getting out of a water heater rental agreement without being fleeced for more money still? I’m in a 7 year-old home, but have already paid for the purchase price of a water heater a few times over…. it’s buggin’ me big time.

  18. Just make an offer to your rental company to buy the heater.
    I got my heater from “direct energy”. They are willing to sell the brand new heater to me, as installed, for a thousand dollars.

  19. The rental water heater scam is only one of many others. I listed some of the more common ones in an article at:

    http://www.wecanadians.com.

    Consumers get ripped off by energy resellers, too. In fact, any long term, fixed-price can be bad for the wallet.

  20. Just had Direct Energy take a look at our 14 year old hot water tank. The quote to buy a new 40 gallon tank from them is $1,035 plus about two hours labour (estimate) @ $109/hour, plus GST.
    That will work out to about $1,500 for a new installation purchased to own.
    The guy sort of tried to encouraged me to rent the next unit. Which is understandable since he makes his living servicing rental units.
    In addition to the above cost there is a further charge of between $115 and $165 for incidental charges the installer MAY charge to possibly alter the installation (if necessary) regardless of whether the unit is bought or rented.
    Why I would have to pay for this if I rent I do not know. Looks like another little cash grab.
    So, to own from Direct Energy it works out to about $1,500 plus maybe the $115 to $165 install fee. To rent it would cost the install fee plus the $14 per month.
    Of course, I am considering my options including purchasing (or renting) from another source.
    I would appreciate feedback from people who have done the math and made their decision.
    Thanks

  21. How much to buy a water heater at the hardware store? Installation should not be that difficult, though likely not a do-it yourself project if gas fitting is involved.

  22. Danno — mine must be a different heater from what you were quoted. I am also with DE, but it’s a power-vent — our rental is about $32 / month.

    Wouldn’t recommend buying a new unit from DE. Hardware store and an installer you trust will be by far the cheapest way to go.

    My problem is, at least the last time I contacted them, they want to charge at outrageous price (way more than to buy a new heater from a hardware store) for my heater that is now about 7 years old.

    arrrrrrrrrg

  23. I just found the 2009 Direct Energy buy-out schedule http://www.directenergy.com/EN/Ontario/RES/Documents/2009_water_heater_buy-out_schedule.pdf.

    Comparing their rental prices (http://www.directenergy.com/EN/Ontario/RES/Pages/WHS/BenefitsOfRenting.aspx) with what I own, to buy out my 3 year old tank would cost me $1039.

    Dividing the price of a new tank by my monthly payments ($20.81) means I will pay for my tank in 55 months, or just over 6 years. Since it’s projected to last a lot longer than that, I probably should buy it out.

    However, an equivalent model on homedepot.ca is listed for $889 plus tax. That means they charge $250 more.

    I am not impressed with Direct Energy in any way.

  24. $13.69 /month-where do you live ????? Greater Toronto Area the rent $20.81 plus tax.!!! The new home owner have no option when buying a new home. The “croocks” allways supporting eachothers.!!!

  25. I’m trying to replace the 11 years old water heater–$20.81 plus $2.70 tax= to ?? better not to say it.!!! but everywhere I go, crooks and more crooks.!!!! The “tankless” water heater $2400 ???? I paid less for my first new car.!!!! or $1500 for normal tank.!!!!WOOOOOOOOW

  26. >Owing your own water heater: Priceless.

    >at 15 years of age, the water heater is past replacement age and is very energy efficient,

    I came here looking for advice, but instead would rather give some: Pay attention to what you’re saying, because you look like idiots.

  27. I had a representative from a company called Summitt come to my home offering a new water tank. I looked at my Direct Energy bill and the cost was less, but my old tank isn’t Energy Star rated and with the savings on my gas bill it makes up for it. Plus they say they’ll cap the increases at the cost of living, a far cry from what’s happened so far. In my opinion why would I fork out $1500 or whatever to own a water tank when if I sell my house it just goes with it? That money is definitely better spent somewhere else. Plus if it breaks then I don’t need to worry about replacing or fixing it, that’s somebody else’s problem.

  28. There are advantages of renting water heaters as well as furnace and air conditioning units as well. On top of the long term savings that Energy Star Energy Efficient products give you, there are companies (Reliance Home Comfort for one), that will replace, repair, not charge for installation and give you 24/7/365 days service. Considering the average maintanance costs for a water heater over 5 years of age and the yearly costs of upkeeping your furnace, this is one way to keep your bills consistent year after year without having a surprise replacement or repair ruin your monthly budget. There are also a large number of government grants which reduce costs and in the cases of furnaces, you can receive a rebate close to $3,000 for simply renting which for all intensive purposes can be added to your cash flow!!
    I hope this helps! Feel free to contact me for more details!

  29. BTW-Reliance also has options to finance which is an affordable way to purchase it but of course does not cover a replacement or service costs should they come and surprise you…

  30. Steve must work for the water heater companies…took you guys a while to realize we were talking about you did’nt it?

    I wish someone would offer a way to “break the chains” for the utility guys.

  31. Actually James, I work in real estate and over the past few years have found many clients who have been surprised in the past with a bill of over $1,000 to fix their furnace or water heater and are more comfortable paying a monthly rental fee so they have piece of mind knowing they have 24/7/365 guaranteed service…If you think of it as insurance, it may make a little more sense…If it breaks, you get a new one, if it’s dirty, you can get it cleaned free of charge once a year (I am not sure about other companies but I know Reliance does this service), which costs about $100. With a rebate (for tankless water heaters) from the government of about $680 and a rental fee of around $40, you in fact are getting about 17 months free rental. On top of this you are saving between $20-$40 a month in gas fees and have no obligation to continue renting should you needs change.
    I haven’t even mentioned installation fees but will mention that the typical life of a water heater is 10 years.

  32. I understand the insurance concept. But it’s seem bloody expensive insurance to me. In the 8 years I’ve been renting my water heater, I calculate I’ve paid for it more than 3 times over. As was stated, if they have on average a 10-year lifespan (in my experience it is much much longer than that in soft-water areas), it may be evening out the cash flow, but I’m really not getting good value for money.

  33. Well if your math is correct, you must be paying an extremely high rent. A typical 60 Gallon Power Vented rental is $23 while a Conventional Tank is about $16. Installation and purchase price if you are buying this equipment will be aroudn $1,100…If you are renting, you should see if you have outs on your contract and contract a company that offers the best service, price and one that doesn’t lock you in…This way, if you sell your house the purchaser can decide to assume the rental or can choose his own…If you currently don’t have an energy efficient tank, get one and start saving some money.
    You may be right about the lifespan but keep in mind the ones sold at Home Depot etc are mass produced in Asia and typically aren’t built to last…While the ones you rent from licensed distributors are far more durable…

  34. Currently renting a tank that is 25 years old. I am looking to buy but am being told I have to buy a mixing valve (scald guard) by code. Has anyone replaced theirs recently and had the same experience?

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  37. Folks,

    I myself do work for one of these large companies mentioned above.

    The lifespan on a typical power vented water heater comes in around 10-12 years on average now a days. Most (or all) parts that make up a water heater most likely do come from asia , and are typically assembled here in north america, us, canada, and mexico as well.

    The people who think power vented tanks are high efficient are not up to date, just because it has a motor on it similar to your high efficient furnace does not make it high efficient, infact the efficiency on a conventional water heater is in the 70% range, and a powervented tank is just a couple percent more efficient. There are high efficient water heaters in the 95% range, but they cost as much as a high efficient furnace and usually only take 4 minutes to go from ice cold water to nearly boiling.

    In regards to renting/purchasing, depending on the region in ontario, one can purchase a PV60 gallon tank for roughly $1100 taxes in :) now one must take into account ur average cost to get a contractor to install it , should be around $500 or so, which still only brings u to 1600, which is a heck of a lot less then renting for 10 years at nearly $300/yr

    Now one thing the companies always say is that their equipment is much superior in quality then the ones you purchase yourself , and that is just pure BS, dont believe the hype , they all come from the same assembly plants

    Im not endorsing any company, always tell the folks to do their own math, and always take into consideration at least 1-2 service calls for the lifespan of a waterheater.

    It is cheaper to own your own tank, but generally folks rent because of the so called convenience factor which at peak times, does not actually exist, where you make still wait 1-2 working days to have someone service the appliance.

    Oh and this goes for all the major companies, if their water heater leaks, they take NO responsibility in paying for the flooding, and leave it up to yourselves to deal with your insurance companies.

    Use your heads, do the math and make your own decision :)

  38. Tony is absolutely right about high costs of not only purchasing but also the installation. Then if it needs repair you will need to pay for that($100…$200…$300..), unless you purchase also the insurance, which will be roughly the same price as renting the heater from DE.
    So, what is easier , to buy and maintain(~$700+ 2-3 service calls of $200 each, or to rent and forget for $10/m… ?
    yes, the answer is clear, and for most people it’s a clear choice, to rent.

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  41. A Conventional 4 0Gallon tank actually costs 12.99 with Reliance and they bill you quarterly on top of giving you 2 months free. Unlike companies like Direct Energy they secure your rental rate for 5 years, where others have been known to increase their rental rates on average about 10% (DE did last year). I encourage everyone to do their research as I have but the salesguy who sold me mine informed me of what unethical companies are doing to get people to sign (New companies such as LIVE CLEAN AND NATIONAL) and what they aren’t telling them. In fact Reliance Home Comfort has 1.25 million customers (who knew) in Ontario and have the capabilities to actually service their tanks (he said they have over 5,000 service techs in Ontario and I confirmed this by calling their 1-877-RELIANCE number). Companies other than them with a large customer base are forced to charge more so they ensure they get their money back and haven’t been proactive in hiring or sub-contracting out techs who go out and service the tanks…Therefore their customers are very unhappy with the so-called service they provide…

    • Canadian Capitalist

      @Steve King: Why do you masquerade as a customer of Reliance Energy when your email indicates that you are an insider and your IP address traces back to unionenergy.com? You have zero credibility if you can’t even be upfront about your affiliation.

  42. You’re right, but as an employee who has litle to do with product knowledge, I wanted to know what our offerings were and what we had to offer…I asked a salesperson to come out to my place to sell me the tank and have since learned a lot of what you want to call INSIDE INFORMATION…which other would call our value…Bottom line is Reliance is the cheapest and we have the most customers in Ontario (pretty much tied with DE). We are highly regarded on the Better Business Bureau and have never been fined for shady sales tactics unlike DE…So there…I did my research and you can all find out the same info I did…I just did it because I wanted to find out about who we were vs the competition and as you will find out our competitors customers are very unlikely to say anything positive about their process nor their customer service…

  43. Just had National Home Services come knocking on my door. My hot water tank life was perfect before they come a knocking. I didn’t give hot water tanks much thought, now; I have to become an educated consumer. NHS wanted $ 25 bucks a month plus an increase of 3.5 % for 15 yrs, that’s over $5,000. Oh, they don’t tell you about the 15 yrs or getting out of the contract. I could blow $2,500 on a tank plus the service calls and still be ahead… so. Would you pay $5000.00 for a hot water tank? I think I am just going to buy. The question is which is a good hot water tank, that’s not made if China. Steve you can’t convince me on renting… because the cash flow goes your way. I get piece of mind knowing I saved money.

  44. Techinically, a 15 year contract is never a good idea. That is small companies only way of ensuring they make their money back where as companies with backing simply understand that a typical customer will not leave their program for 10.5 years. Not one company out there will come and replace their own tank for a new one unless it is over 15 years old and even then they may not do it. The best option in this market is to find the lowest rate (currently that is Reliance who is the same price as DE but locks in your rental rate for 5 years) and in 5-6 years time, call their competitor and get them to replace it with a new one. No one knows if something better and more efficient will come out in the next few years hence the new phenomenon of contracts for hot water tanks. Regardless of how long your contract is, the ability to transfer it to a new home owner is the exact same as it always was. The only fear you should have with doing this is signing on with a company who will not guarantee their rate over the term of the contract. My advice is to rent for 5 years, keep your rate the same and check out who has the best rate after that 5 years…Companies will not put in a new piece of equipment and replace their own if it still works but unless it is over 10 years old, it probably doesn’t need to be replaced anyway. If you buy a tank and it breaks down after 9 or 10 years, you don’t have any options….

  45. Rental of a hot water tank when you own your own home is pointless. Was on my third home in Chalk River Ontario and replaced my Rental electric hot water in 1997, about a year after moving in. The rental at that time was just shy of $8.00 a month and the tank was already 12 years old. It was a Cascade 40 and they were notorious for rupturing and flooding your basement. Thankfully a day prior to the new electric 60 gallon tank arriving, the tank failed and was home to shut off the water and power to it. Now the problem was pick up of the old tank, not the cancelation of rental payment for the tank through Ontario Hydro. It sat at the end of the driveway for over 3 month till finally just asked straight out if it was okay to dispose of it myself!

    Currently live in Winnipeg and replaced my 40 gallon gas water tank to a 60 gallon electric. Since electricity rates are regulated and the gas is not, this was a better cost savings in the long run. Neither was a rental. If I was still living in Ontario, without question would own and have a gas hot water tank. Manitoba enjoys the lowest rates for electricity in North America. After dealing with the fiasco of Ontario Hydro’s complete malfeasance and over double the cost for electricity within a year of there “Restructuring” for bilking the customer, can’t say I Miss Ontario any more. Thanks to Queens Park and Toronto in general for the mess you made of a good province.

  46. We recently moved to a new home and had a water heater rented by Direct Energy (DE). Previous owners had that contract and with all that moving we did not change it. Unfortunately, we did not know that the water heater was “26” years old and soon as we moved it we had a huge leakage in our basement; the water heater broke. People from DE replaced it; we paid for some charges for vents, pipes… as “that was not covered by them”. Then we got another surprise from DE, we got an increase in our water heater rental charges for almost 100%. When I called them and asked: why we are getting increase, their answer was: we got new water heater”. We did not ask for any new model or any special water heater. DE people came before replacing it, they assess our space and they decided for “appropriate” replacement. Then it came many phone calls, waiting on the line for 30 minutes before you speak with someone, and many unanswered questions. We have been so unhappy with DE services. As customer, I am very surprise how DE miss to replace the water heater for 26 years. Does DE have any evidence of how old customers’ water heaters are and when they have to be replaced? Does it care for its customers!!!
    Is my case an example of how DE cares for its customers? Finally, I can say that DE is the worst company I have ever worked with. I am so disappointed with its services and how they respect and treat its customers!
    As we are looking for another water heater company or buying a water heater, I am very thankful for all your comments and suggestions.

  47. Hi, similar to the post above this, I also recently moved into a home that has a DE hot water tank. I closed in Dec/2010 and on 04 July 2011 I noticed water leaking in a basement bedroom. The water was coming up from underneath the hardwood floor. I traced it to the HWT which had a hole in the bottom. I called DE immediately. Prior to moving to this house I had owned another house and there I also had a HWT rental with DE. I faithfully paid my bill for 5 years and never received any serving for the HWT.

    I foolishly thought that since I was such a good customers, paying for a rental for almost 6 consecutive years without ever calling for anything at all, I would have not a problem: WRONG!!!!!!!! I found out that the tank was over 16 years old. The 1st tech showed up only to confirm the leak and dis not bring a replacement tank. They said they’d return to exchange the tank, I waited and waited . . . The 2nd tech didn’t even show up at all. I called DE to advised them that no one showed up and they said I’d have to wait until tomorrow. So at this point, I still have no hot water in the house.

    I am just so upset about the extremely poor customer service that I am DONE with DE. I read this and other sites and I have come to my senses. I am too wired to sleep, plus I haven’t showered today becuase I have no hot water.

    Nina (another poster — near the top) is right, renting a HWT is just weird. It’s a direct parallel to the days when people used to rent their home phones from Bell Canada. I thought about that and just laughed, ridiculous!!!!!

    Tomorrow morning, I’m going to Home Depot. After 6 years of renting the HWT, I could have bought one with that money. DE is not getting another penny from me.

    PS. I found out from their Customer Care Dept. (which is totally uncaring) that the HWT is 16 years old, past it’s shelf life. So, DE left an old, rusty, defective product in my house past its lifespan yet I am responsible for the damage it caused. Claiming, I should use my home insurance and pay the deductible and fight them teeth and nail for the uncovered portion, NO THANKS. I have wasted enough time waiting on hold while they come up with reasons why this malfunction is somehow my fault: GOOD RIDDANCE DE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  48. Still angry with DE; created a FB group.

    Please join: DE SUCKS!!!!!!!!

    http://www.facebook.com/home.php?sk=group_123449771075952

  49. Hello, i have found this site wondering as to why people in Ontario rent their hot water tanks. It is hard to believe that this nonsense is being carried out.You are brain washed by a bunch of scam artists.
    We do not have this in BC.
    We either have a new one installed before it fails(and they all fail) of if they do fail, then get it replaced. Does one rent the shingles on a roof or get it replaced when required? Same thing. The people of Ontario are being ripped off by these energy companies. Give them the boot. Rona sells hot water tanks that are manufactured in Quebec and are quite reasonably priced. Not made in Asia. I have no affiliation with Rona, I have just shopped around when i was considering replacing one.
    Thanks for your time.Harvey

  50. Those Live Clean Home Services water heater guys tried to get in to my house uninvited, claiming they needed to change my water heater, saying they were from The Energy Company, hoping I wouldn’t know what they were up to. They just about pushed their way through the door “which way is best to get in, through here or the back?” it infuriates me. How can people do business like this and get away with it?

    I’m so tired of lies and deception at the door it makes me ill. Do they think everyone is a fool? I feel so sorry for anyone who’s been conned into believing they have to change their heater or gas company or furnace not knowing that they’re just getting you to switch to their company so they can make a buck.

    Tell the truth, say who you really are and why you’re really at the door. Man up. Have some integrity.

    Live Clean Home Services is just another opportunist hoping to make a buck off anyone that’s unfortunate enough not to know better.

    If it really is time for you to change your heater, call your current company and then call around and get the best deal you can – become an informed consumer and help make it impossible for these guys to continue their deceptive ways.

    Mike G
    Toronto

  51. I live in Ontario, and the water heater rental business is, to say the least, brisk here. According to Reliance Home Comfort, 1.2 million homeowners rent water heaters here. And that’s only their part of the pie, Wow. What a cash cow. You know its got to be a huge money maker when organisations like The Ontario Teachers Pension Fund get involved. 

    I’m not sure how the rental business evolved here. Other parts of the country seem to be less affected by this blatant money grab. One theory is, local utilities, in an attempt at conservation, (natural gas vs. electric), offered rental units to homeowners as a way to conserve, and offset the cost of a new install by offering a rental program. Many of them had a pay-to-own option. Another theory is that new home builders could drop their price slightly by including a rental w/h unit in their homes.
    Then, at some point, a bean counter realised this was a huge profit centre. Thus the scam began.

    Let’s do the numbers. Even a poorly maintained W/H will last 8-12 years. For example, a new power vent water heater costs about $900. The current rental rate from Reliance, one of the many companies offering rentals, is $25 per month, as of January 2012. Do the math. Where else, in this economy, can you double your investment in six years. 

    Some background on my situation: We moved into our house 4 1/2 years ago, and, at the time, had a number of large expenses, and typically, didn’t want to shell out for a water heater. 
    After reading about some companies allowing customers a buy out option, I contacted Reliance and was told that the buy out would be $800. I almost choked. “$800 for a six year old tank?” “Well”, the man said, “It’s a heavy duty tank, you know. We can’t just rent out ordinary tanks. These are special.” I asked if he thought I fell off a turnip truck the previous night, and told him I’d get back to him on the details in regards to the removal process. 
    Weeks turned into months, and I ignored that bloody rental water heater, that money vacuum in my basement, as much as I could. A home mortgage is one thing, but getting it in the ear for a friggin’ home appliance was another. I’m not renting my stove, my dish washer, nor my fridge…Grrr…

    Finally, it was Reliance’s rate increase, starting January 2012, that broke the camel’s back.

    I found someone on Kijiji that was selling a used power vent tank, and I offered buddy $50 for it. When I got it home and started doing the ‘requisite check up’, I found that the anode was mostly gone, and the dip tube had rotted off and fallen into the tank. I managed to fish all the plastic tubing bits out, and replaced the leaking drain valve. I also cleaned out as much of the sediment as possible.

    Today I pulled out the Reliance rental unit, and installed my refurb. After mucking with the vacuum switch tube, which had gotten knocked off in transit, it fired up no problem. I will now buy a new anode for it, now that I know that it’s working properly.

    Now, I’m not suggesting that people currently renting a water heater go hunt down a used unit as I did, but simply GO BUY A NEW ONE, THEN LOOK AFTER IT. Change the anode as required, especially if you use a water softener. Don’t get shafted by these rental companies, and definitely DO NOT sign a long term rental contract.

    I have talked to many people this past while, who have rental units. There seem to be many misconceptions about water heaters. For example:

    i) They are VERY expensive to buy.
    Uh.,.what? Most cost less than that plasma TV you recently purchased. And probably will last longer too, if you maintain it. Now, a new hot water heater isn’t nearly as sexy as a new 55″ TV, but I guarantee, after five days of abstinence from both, and a choice was offered between the two, priorities would become crystal clear…. I digress. 
    ii) They are expensive to service, and the Rental Company pays for the service.
    Again,..Uh, duh, what ? No, YOU are paying for the service. You just don’t want to acknowledge it. Think about it. Even if you hired a plumber annually for $80 to inspect the water heater you own, you’d still be coming out ahead.
    iii) The Rental Company will insure against damages caused by their tank leaking.
    Are you kidding?? They cover nothing aside from keeping the tank limping along. You had better make sure your insurance policy is updated and includes water damage. 

    As a final note, my ‘Reliance Notice Of Rate Increase’ states some lovely double-speak gems such as: 

    “Free replacement should it be un-repairable as a result of normal use”
    Really? You mean it if it pisses water all over my possessions and causes thousands of dollars in damages because you don’t maintain your water heaters in any way, shape, or form, you are still willing to give me a new water heater? How charitable.

    “Guaranteed service – our large network of qualified, licensed technicians provided gauranteed support.” 
    Now that’s a doubly-duty gaurantee, if I ever read one. Whatever it means. 

    “All repair, parts, and labour, as a result of normal use, are included through the life of the equipment”.
    Once more, uh, duh… It’s a rental, NOT a lease. It’s their equipment. If you rent a house, do you need to pay to have it re-shingled?

    As a final insult, the Reliance letter states that “1.2 million homeowners…trust us…and why we’ve saved our customers over $80 million on water heater repairs last year alone.” 

    Holy Crap! $80 million dollars! It costs $80 million dollars to repair water heaters! 
    I want to save $80 million dollars! I want to rent one now! I’m going to save enough for me, my wife, and my child’s retirement just by renting from your company!

    An update:

    I just called Reliance Home Comfort, the company which has been renting me the water heater. It turns out that they have a $40 contract cancellation fee, and want me pay and additional $65 to pick up their tank unless I drop it off at their depot. I got a bit angry, and told the CSR that they could pick it up, or i’d call a scrap guy to take it away. She said I’d be charged $730, the “buy out price” for the tank if I did that. I told her, “It’s a 2004 model, how in the hell is it worth that much? I can go buy a new one for $900″, to which she replied the same old “These are Special Heavy Duty models, build just for Reliance” 
    Ya right. 
    So now I need to somehow get that friggin’ tank back to them in my Ford Focus. I told the CSR that Reliance Home Comfort just bought $105 of serious bad publicity. 

    This is just another reason to NEVER rent a water heater.

  52. I’m just about to buy a tankless Navien NR210-A and tell National Water Heater Rental to go jump in the lake…but they want $500 to get lost. Any ideas on how to avoid this fee?

  53. I have just got off the phone with Greater Sudbury Electrical who handles the tankless hot water rental and they want 2298.00 to get out of the contract. They say its to cover the cost of the tank.
    Does anybody know if this is legal?
    Or how to get out of this rental agreement?
    The house is only 9 months old. Would this be enough grounds to charge me this amount to exit this contract?

  54. today most water heaters are coated inside with a product that prevents corrosion and build up.. on demand products ( navien has a stainless steel heat exchanger) can be installed with a product called a scale hammer( approx $350.00 ) The on demand are by far the best investment if you stay in your home more than 5 years… saves big on fuel and helps lower emissions.( you should never keep the kettle hot all day to have one or two cups of coffee or tee) as for the rental program .. after a set amount of years in your home you can get rid of it without penalty and for those who are getting stuck by the big rental companies, there are govt services that will help you with your problem, and guide you. My company will send you a new on demand water tank almost anywhere in Ontario. ( we are a wholesale dealer/distributor with independent installation services throughout the province) our web site is focused on furnaces however if you call and ask for Jim (me ) the staff will get your info to me and i will personally help if i can. ontariogasfurnace.

  55. Direct Energy are revising their water heater rental Terms and Conditions effective April 2nd 2012. However, they have left a provision for customers to retain their existing agreement unchanged and “not accept the service enhancements and changes” in the revised Terms and Conditions. To do this you are required to contact DE prior to April 2nd. The new Terms and Conditions appear to limit a customer’s termination rights for “buy out” whereby you can purchase your unit at a price determined by their “Buy out Schedule”, after which the unit becomes your own responsibility. Under a previous agreements there are options to have DE disconnect and take back the rental unit for a fee of $75.00 which could be waived under certain conditions. Also, in 2002 DE agreed to waive “exit fees” of $125.00 if a rental agreement was terminated less than 5 years after installation. DE seem to have dropped any “take back” option under the new arrangements.

    Can anyone see how customers might benefits by accepting the new Terms?

  56. Pingback: This and That: Portfolio Diversification, Direct Energy and more… | Canadian Capitalist

  57. I live in the Greater Toronto Area and am on a work assignment out of province.
    Got a call about 3 weeks ago that the furnace was not working (over 20 years old), on one of the coldest days of this past winter. A service call into DE, a sales pitch to buy warranty coverage and the next day tech came out, walked into the basement and announced that the furnace was old and worn out, he would not touch it, could do nothing and left. He did not check to see what was wrong, advise us that he would have to install a new furnace immediately, nothing of the sort. He just glance at the unit and made the statement. My wife put him on the phone to me and he repeated the same thing.

    So, my wife and kids were left in the cold, me with the cost of his him trudging through my house in his dirty boots and lack of professional attitude being a $170 service fee. Service?? What service?? I made a call to a friend and was able to get the furnace replace the next day throught the services of a professional independent service contractor.
    Now I need to get the rental water heater monkey (over 20 years old) off my back. I want nothing further to do with DE.
    I intend to buy my own and get them off my back. What a company!!!

  58. I am a soon-to-be first time homebuyer, and I see many condo units for sale with ‘water heater: rented’. I want to buy the condo, but do not want to rent the water heater. How do I go about buying the condo without signing onto a water heater rental contract?

  59. I have 14 years old water heater, paying 14 dollars a month to DE. During 14 years I replaced the Pressure Relief Valve and that was it. I would probably save a lot just by having my own water heater.

  60. Since moving back from the US to help out with the folks, it seems like this is just another way to get money out of people. I owned two houses and rented out two duplexes while living in Wisconsin and never replaced a water heater that was less than 10 years old. As for reliance, they’re pests and have been calling about adding the furnace and air conditioning to the mix. They’re very pushy and the sales rep asked me my logic for not being interested! They rank up there with the “air-vent cleaning services” and “Windows support wanting to debug your PC! Maybe this service makes things easier cost-wise for the builders, but unless you’re cursed or really unlucky, just buy the unit.

  61. Renting a water heater is also a good idea. But only if its a lennox water boiler.

  62. Well

    read through everything, I think I should rent from Reliance

    My situation is, No NG in my area, propane is a joke….(this is what I have now)

    And since Im broke, seems like Reliance is the best choice, when in a jam….

    Unless there are any other better companies in Norfolk area, Southern Ontario

    Thanks Jay

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