The short version
Use the $5,000 rule: multiply the repair cost by the age of the system. If the result exceeds $5,000, replacement is likely the better value. A 12-year-old system needing a $600 repair = $7,200 → lean toward replacement. A 5-year-old system needing a $600 repair = $3,000 → repair makes sense.
The decision tree
1. How old is the system?
Under 10 years: repair is almost always the right call unless the compressor has failed (see below).
10–15 years: depends on the repair cost and whether efficiency matters to you.
Over 15 years: replacement is usually worth considering even on a smaller repair, because you’re likely 1–3 years from a major failure regardless.
2. What failed?
Not all repairs are equal. A failed capacitor or contactor is a $150–$250 repair on any age system — easy yes. A failed compressor on a 12-year-old R-22 (Freon) system is a different story: compressor replacement often runs $1,500–$2,500, R-22 refrigerant now costs $50–$80 per pound due to the phase-out, and you’re putting significant money into aging technology.
3. Is it an R-22 system?
R-22 refrigerant has been phased out under EPA regulations. If your system uses it (check the label on the outdoor unit), any repair involving refrigerant will be expensive and the cost will only increase. Systems still on R-22 are typically 15+ years old.
4. Have there been multiple repairs in the last 2 years?
One repair doesn’t indicate a failing system. Two or three in 24 months usually does. Frequent failures suggest the system is at the end of its reliable life, and continuing to repair is spending money toward an inevitable replacement.
What we tell our customers
When we diagnose a system, we give you the honest picture: what it’ll cost to repair, our read on the system’s remaining life, and what a comparable replacement would run. We don’t push replacement on systems that have years left in them, and we don’t recommend throwing good money after bad on something that’s genuinely at the end of the line. The goal is the right answer for your house and your budget.