A water heater likely needs to be replaced if it leaks or is more than 10 years old due to probable corrosion in the tank from reactions to water minerals. The homeowner may be able to repair newer water heaters that make noises or don't produce hot water.
Age is a primary factor in deciding whether or not to replace a water heater. The average water heater works well for 10 to 13 years. After that, homeowners may see several issues pop up with the unit. Constantly making repairs to an old water heater adds up. Replacing the old unit with an energy-efficient model saves money on repairs and utility bills.