Buying or Renting a Water Heater
Making the Right Choice
(updated 2020)

A question “buying or renting a water heater” is not equally present in North America, or even in all provinces of Canada. Renting as an option is so poorly represented in the market that consumers don’t even know it exists. So, they never called the utility company to ask about the rental program or have been approached by the sales rep.

Meanwhile, in Ontario, when you are moving into a new house, it is not quite unusual to sign a water heater renting agreement or take it over from the previous owner. It looks like homeowners prefer renting, without further analysis.

Over the last few years, however, things are changing. If you compare costs for renting vs. buying a new appliance, you may find that the second one is more economical. Water heater renting is starting to be called “fad,” let’s cite the mildest word.

At the same time, renting companies in Canada and United States are arguing that their offer is superior.

How to make a smart decision or, what are the advantages and disadvantages of buying vs. renting, let's compare the options.

Buying a water heater - Pros and cons


Once you buy a water heater, it is in your ownership, and no one could take it away. There is no additional obligation.

A new appliance has a warranty. For the tank-type water heaters, the range is commonly five to ten years, for tankless even 15 years. Vendors also include some extra maintenance assistance to attract their customers.

Retailers often offer flexible monthly payments even without down payment. If you want to pay off the remaining balance, it could be done at any time, usually without the penalty.


When you buy a new water heater, the installation cost is yours. It may be high, in some cases almost half the cost of a water heater. Our advice is - do not try to install a water heater yourself. It may be dangerous or if there is a problem the warranty is void.

Hire a licensed plumber who knows about gas, electric and plumbing work and has a good knowledge of the local and national codes.

You have to calculate and predict your household's hot water needs (sizing) accurately before buying. Appliances decrease value quickly, and you will be at a loss if you want to replace it for a more efficient model years after.

Once the warranty expires, the owner pays all the repairs, as the water heater is old enough to develop problems.

Buy the Best of Tankless

Buying and installing a tankless water heater is not cheap but there are many advantages:

  • Tankless delivers endless supply of hot water fast and on demand.
  • Tankless are ultra-efficient (such as condensing models) and Energy Star, saving you money.
  • Tankless are small that are installed on the wall.
  • Some tankless such as Rinnai have a voice activation system, recirculation system, and are Wi-Fi compatible.
  • Due to on demand heating, hot water is always delivered fresh.

Renting a water heater - Pros and cons


If you rent a water heater from the local or national companies such as Direct Energy, Reliance and other, you will have a free installation, lifetime service, maintenance, repair, and replacement.

The monthly rental rate is the only payment. For example, for a 40-gal Rheem, Power Vent water heater, I was paying approximately 25 CDN per month in 2019 (Ontario, Canada).

What you can expect is a quick response to any problem and customer service with 24/7/365 emergency phone number.

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Rental provider’s agreement is very detailed and must be considered carefully. There are circumstances in which the services and repairs are not free of charge. Ask what is included in the standard installation. Read parts of the agreement called “policies,” “cancellation terms,” “limitations of liability”... and be sure to understand them correctly.

Expect your monthly payment to rise. A standard rental term is 15 years, and annual increase is typically between 3.5% and 3.8%.

If you decide to buy-out a water heater from the rental company, it is not a good deal. Price is always high for that, already used, an old appliance.

Then what to do? Buying or renting a water heater?

To buy or rent a water heater - you will decide according to your needs, plans, wishes, budget... Some calculations show that after 8-9 years of usage buying becomes more profitable than renting. We add – most of the time. A water heater needs to be maintained regularly to reach its full lifetime. Repairs and maintenance may be more or less expensive, regardless of the factors under our control.

› Buying or renting a water heater

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