Step 4: Determine any local or federal tax credits or energy company rebates you may qualify for.
Step 5: Investigate financing options and subtract the estimated utility savings from monthly payment to determine actual monthly out of pocket expense.
Step 6: Compare monthly out of pocket expense to repair cost.
If you prefer a calculation that can be used as a good guideline, you can take the COST OF REPAIR X AGE OF EQUIPMENT. If that calculation exceeds the cost of the replacing your air conditioning system, it is a good idea to replace.
Why a homeowner should replace an air conditioner that is out of warranty...
There is a much better idea of expected costs. Nothing guarantees an old system from failing a part every other month. Future repair costs on an out of warranty system come with a really big question mark. Over the next couple of years, it could cost nothing and it could cost several thousand dollars. With a new system, you have peace of mind and are less likely to deal with sudden, unexpected and substantial costs.