Recently, Lennox reported a 23% drop in residential unit sales volume during Q3.
This is an eye-catching drop. Startling, even. Lennox CFO Michael Quenzer explained, “Contractors and distributors actively reduced inventory levels. Macroeconomic softness weighed on both new and existing home sales. Moderate weather dampened demand, and there was a clear shift towards system repairs rather than full replacements.”
While Lennox CEO Alok Maskara noted that 2026 would be “brighter,” it’s more than understandable why some contractors may be concerned heading into the new year.
HVAC Sales Dropping & the Impact on Residential Contractors
As we enter 2026, the push to recover from a slower second half in 2025 could be hectic. Anuj Khanna, Founder and CEO of Comfort Connect, urges salesmen and women to focus on one thing in particular: making the most of every lead.
“Make sure you have financing partners who will drive high approvals, not ones who are contracting because they’re feeling the effects of rising defaults,” he said. “Make buying a new system easier for homeowners who are considering a repair vs. a replacement and mine your existing customer base.”
He went on to explain the reasons for this decline in further detail: “Demand is down as the macro environment is deteriorating. This is a cyclical phenomenon that happens frequently. It’s just that the industry has been on an absolute tear post-Covid, and contractors could do no wrong. With rates having risen very quickly and staying stubbornly high, debt-service costs are high while demand is fading. Layoffs are also mounting, equipment prices continue to rise, and consumers have less in their savings accounts than in the past. It’s no surprise that consumers are choosing repair options over replacements, but when they do this, it’s a big cash hit to contractors.
“We’re entering a new era. With options like our Premier Program® available, your customers don’t need to spend $1,500 on a repair when they can get a brand-new system for a low monthly payment.”
Jon Carman, SVP of Training at Comfort Connect, further explained things from the customer’s vantage. “When a customer’s world is tightening on all financial fronts, they’re often put in a situation where they have to make a choice they’d prefer not to make. Without flexible financing options, most people are forced to ‘fix’ their issue instead of upgrading.”
So, how do you fix this?
With an all-in-one financing platform like ours that offers multiple options – such as first, second, and third look loans, lease-to-own, and an all-inclusive Home Comfort-as-a-Service model like our Premier Program – homeowners and contactors enjoy a win-win scenario.
The Premier Program: Your Opportunity to Reshape the Market
With residential unit sales down to close 2025, you need a plan to make up lost ground in 2026. That’s where all-inclusive recurring revenue models can be your secret weapon.
The Premier Program is our Home Comfort-as-a-Service model that bundles equipment, installation, covered repairs, and factory-recommended maintenance into one simple monthly payment. When homeowners sign up for the Premier Program, contractors still get paid as if it was a standard installation job while the homeowner gets everything they want and need out of a new unit for one low monthly payment plus other perks they won’t find included with a traditional install, such as:
- All service, covered repairs, and trip charges included
- Annual maintenance and tune-ups
- Transferrable services if the home is sold
- Worry-Free Rewards™
Our contractors also see an increase in closing rates and new recurring revenue opportunities.
“Installing all-inclusive HVAC equipment helps everyone involved,” Carman said. “For the customer, they get a new system and eliminate the expense of a fix on something that is guaranteed to break in the future. For the contractor, they get a happy customer locked into their services long-term, protecting them and their implied future revenue for years to come.”
What Are You Waiting For?
For more information on how you can navigate this ever-changing market, contact us to learn more about the Premier Program and our all-in-one financing platform.
Together, we can help you satisfy more customers today.
