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In most cases, repair makes sense if your system is under 10 years old and the repair costs less than half the price of a new system. Replacement makes more sense for older systems facing major repairs, frequent breakdowns, or rising energy bills.
The decision between repairing and replacing an AC system comes down to three factors: the age of your system, the cost of the repair relative to a new system, and how often you've had to call for service recently.
A common industry guideline: if a repair costs more than 50% of the price of a new system, and your unit is more than 10 years old, replacement usually makes more financial sense long-term.
A newer system with an isolated issue -- a capacitor, a contactor, a refrigerant leak in an otherwise healthy unit -- is almost always worth repairing rather than replacing.