Mighty Bargain Hunter

High bid wins vs. stand in line

December 8th, 2005 | by mbhunter |

Gary North uses this phrase occasionally in his free twice-weekly newsletter, Reality Check. The context is that you can either go for service or you can go for price, but not both. A doctor who doesn’t take Medicare patients usually gets paid — a lot — up front, but can give you a lot of attention because high bid wins. A doctor who does take Medicare is cheaper for the patient (possibly you), but has to shuffle you through at the speed of light, and until you zip past her, you’re standing in line.

That was his example, paraphrased. Mine deals with our heat pump.

Our outdoor unit died during the summer. We had a home buyer’s warranty still in force for big repairs like this. The unit was getting old, and it was still insurable by the coverage, so the cost was justifiable at the time.

When we made the claim, we started waiting in line. They came out a few days later, recharged the refrigerant in the cooling line. Two days later, the air conditioning stopped working again. We called the warranty company to state that the repair didn’t work. They told us that they would need to verify with the repair contractor because they weren’t going to pay twice for the same repair. Two more days of waiting. I called back after the weekend. Well, actually, the other employee at the warranty company made a mistake; he could have submitted the work order after all. A few days more of waiting. The repair company comes out again, tightens something and recharges the refrigerant. Two days later, again, the air conditioner stops working. Finally, they replace the outdoor unit — a few days later. The EnergyStar rating is near the bottom; basically it’s the cheapest unit they could get away with installing. The installer is none too pleased that I wouldn’t pay $75 additional to have him dispose of my old unit. He’s very short with me on the phone, and I have to dispose of the unit myself.

It only cost me the $50 deductible (and the home buyer’s warranty premium for the year) to have the condenser unit replaced. But it took three weeks of the hottest part of the summer — the heat was so bad that I bought a window unit so that at least one room in our house would be cool! — and I had to dispose of my old unit myself. It cost me a fraction of the price of a new condenser unit. But the other two parties were trying to minimize their costs as much as they could (cheap unit, warranty company obviously paying the contractor very little, and extra charges for normal disposal services), and I “stood in line” a long time for it to be fixed.

We let our home buyer’s warranty coverage expire this fall. Now, we had to pay out of pocket in full for any repairs to the items that were previously covered.

Which we ended up doing yesterday.

The emergency heat (filament heat in the heat pump) was not working, so the house was cold. Yesterday morning we called up a local heating/cooling service company that our neighbors recommended. He said, “Well, I can come out today, but I don’t know when.” He showed up five hours later, worked for 20 minutes, and it was fixed! Better heat than we’ve ever had out of that unit.

He explained that he fixed some settings that were not reset during the installation of the other unit. In other words, the other unit wasn’t configured correctly by the other contractor. Not only did they take a long time, they didn’t even do it completely right!

He also noticed the outdoor unit was “contractor grade” and asked if this was a home buyer’s warranty call. We said no, but that it was for the outdoor unit. He said, “Yeah, that’s the stuff that the warranty company has installed.”

High bid wins. But if you want to save some money, the line starts way over there!

Questions tagged savings at Cash Commons:

• Automated Savings
• Should I pay down my debt of try to build an emergency fund in savings?
• What's the purpose of a mortgage offset account?