To reduce the costs of new furnace installation, buy a unit that is appropriately efficient and no larger than the size of home requires. To make sure of the best deal, obtain at least three estimates and negotiate with the heating contractor rather than accepting the first quote.
In terms of installation costs, electric furnaces that are small in size are the cheapest, with typical installation costs ranging between $1000 and $1500. Buying a more efficient furnace with special installation requirements will cost more initially, though it may save money in the long run. For example, a gas furnace with 95% efficiency costs up to $7500 for installation, as it also needs gas lines to be fitted and extensive ductwork put into place.
To keep furnace installation costs down, match the furnace efficiency and size precisely to the heating requirements of the space. In a small apartment, installing a small electric furnace with 80% to 90% efficiency is an inexpensive option, whereas for larger spaces, a 95% efficient gas furnace is preferred. Also, depending on heating requirements, installing a single-stage furnace rather than a multi-stage one will reduce installation costs.
Getting at least three estimates reduces furnace installation costs by making it possible to compare prices and choose the lowest one. It also helps if the homeowner negotiates well with the heating contractor. Negotiation can be done to reduce labor costs and other expenses, or to request extended warranties and free accessories that translate to more savings.