Canadian Money Forum banner
Status
Not open for further replies.
1 - 20 of 38 Posts

·
Registered
Joined
·
7,151 Posts
Discussion Starter · #1 ·
You can see it everywhere. I have lived in many provinces and several countries. No other demographic region in the developed world is this financially inept.

Take the water tank rentals as a very simple example. Nearly all Ontarians think it is perfectly acceptable to rent a water tank with an open ended contract. If they could just do 30 seconds of elementary school math they would realize that it only takes a few years for this to be a bad deal. The builders are clearly getting some kind of kick back on the rented water tanks to get some kind of efficiency rebate but they don't need to install any of the more efficient features.

Ontario auto insurance is a huge scam. You only have to compare to any other province. Ottawa doesn't seem to ever manage a decent procurement deal. Maybe we just need to move the government to any other province that has a decent financial aptitude. Even Quebec does far better. Alberta or Saskatchewan would probably do much better. The bar is not set very high to begin with. It's literally elementary school stuff. Nowhere else in Canada do so many people fall for blatant scams.

Is it something in the water? Is it the catholic education system? What is it? What do they not get about capitalism? Why would you ever rent a hot water tank?
 

·
Registered
Joined
·
7,151 Posts
Discussion Starter · #3 ·
Hydro-Quebec makes sense as they operate mostly hydroelectric dams

Hydro-One is mostly nuclear energy. Maybe they though Nuc-Ontario had a bad ring to it so they copied Quebec. "Did you pay the Nuclear bill this month?" I blame Trudeau

I forgot about the milk bags. To be fair our milk is better than US or Europe imo. UHT is disgusting
 

·
Registered
Joined
·
7,151 Posts
Discussion Starter · #6 ·
I suspect it's because they avoid paying installation up front. There's also a "don't worry about maintenance" aspect. Might be worth it to landlords (steady $, no surprises). Having no up front cost is also a great incentive for builders, if people are willing to pay the same for a house which is effectively without a heater.
The landlords are just writing in the lease that the tenant pays the utilities and the hot water rental fee goes on the Hydro One bill

I suspect the builders are getting some kind of benefit from it from the province or the water tank company. They are installing top end water tanks with features they don't even use. They must get a rebate from provincial government for efficiency or something even though they don't install any of the efficient plumbing that would actually make it efficient. Otherwise why install a high end tank without water heated floors or something

I could see HVAC rentals making some sense as not everyone could afford replacing or repairing a HVAC. Hot water tank is like $1k though and the break even is a few years

People are paying 15k for a 1k water tank. You don't even need a calculator to figure this out
 

·
Registered
Joined
·
7,151 Posts
Discussion Starter · #12 ·
Renters don't want to lug around a water heater everywhere they go, and landlords don't want to deal with old water heaters left behind by tenants.
Then why does the landlord provide HVAC and other major appliances except hot water tank? No other region has hot water tank rental fees in the electricity bill. I have colleagues across the US and not even southern americans are that financially inept

Also doesn't explain why car insurance, electricity, healthcare and everything else appears to be managed by a domestic brand stealership bailed out by the government to build SUVs locally in China, Ontario designed domestically in Korea, Ontario

Ontario has a major corruption problem? Is it the dual education system? Is one for the privileged enlightened class and the other for depraved heathens? Maybe Alberta and Quebec were on to something with the separation idea
 

·
Registered
Joined
·
7,151 Posts
Discussion Starter · #15 ·
Like why does vehicle insurance cost 10x in Ontario than in the US or Europe?

Are the Ontarian drivers that bad? Is the money all siphoned to Doug Ford?

Why are property taxes and electricity rates so high? Is this the California of Canada?
 

·
Registered
Joined
·
7,151 Posts
Discussion Starter · #17 ·
So you pay a fortune and don't even have HVAC?

Even landlords in third world country slums provide HVAC
 

·
Registered
Joined
·
7,151 Posts
Discussion Starter · #19 ·
The whole HWT rental program tried to get off the ground out here a few years ago and fell flat on it's face.
Not sure where you're from.. but sounds like your people worked out the math

The places I'm looking at all have A/C and even major appliances.. which is a bit annoying because I have appliances. But the HWT scam is buried in the Hydro One bill. It's a open ended contract for the tenant

Imagine renting a place and finding out the garbage or internet or whatever was already signed forever and you just have to accept it because it's what Ontarians do
 

·
Registered
Joined
·
7,151 Posts
Discussion Starter · #21 ·
This one is straight forward. They are selling the house and every cent on costs is lost profit. Why would the builder pay for a water tank, heater when someone else is happy to do so? The recurring cost is paid by the eventual home owner.
You're telling me $800k home builders are eking out a living on water tank rentals? Why don't they rent out the HVAC, toilets and everything else?

The original questions still stands. Why are Ontarians the only ones who fall for this sham?

This article is from 4 years ago.. rates have gone up with inflation now

The monthly rate for so-called tankless systems is commonly in the $40 range and the “contracts” do not have an end date. Buyouts are possible, but begin in the thousands.
You can buy your dream home, but hot water heater only for rent
 

·
Registered
Joined
·
7,151 Posts
Discussion Starter · #24 ·
This blog is from an old CMF member from 2014

Water Heater Rentals: Do Ontario Residents Get Hosed?
"Direct Energy operates in both Ontario and Alberta, but despite more than one million water heater rental customers in Ontario, the company doesn’t rent water heaters in Alberta."

So how is it that Albertans have basic mathematic and financial skills that Ontarians lack?

Since that article was written, prices and terms have gotten so much worse. Ontarians not only don't learn but they are getting dumber
 

·
Registered
Joined
·
7,151 Posts
Discussion Starter · #30 ·
IOW ... it is a racket where the builders and water heater rental companies are in league with each other.
Nobody else in Canada falls for this racket

No state in the US does either. I never heard of any country in Europe doing this non-sense

So why Ontarians? And then why does everything else cost 10x what it should by basic math
 

·
Registered
Joined
·
7,151 Posts
Discussion Starter · #35 ·
Agree on the builders getting a kickback from the hot water rental company and avoiding the costs, including installation fee.
I'm sure the rental company loves sending a crew to put in say twenty tanks, all close together in a new build area.

I am puzzled by the new features bit as the rentals I have seen are the same as one buys at Home Depot or Lowes. Nothing top end or additional features. Maybe it was something the landlord asked for?
You assume that your deal from 5-10 years ago is the same as the deals/contracts today.

I'm going off 2022 builds in Ontario. Comments online say they are installing fancy tanks with features that don't get used. With house prices skyrocketing in Ontario and inflation they have probably adjusted the numbers. It's now +$50/month for a hot water tank and breakeven is only a few years if you bought a more sensible tank instead

Ontarians are like blissful frogs in the gradually warming water

Those renting how water tanks in Quebec and Alberta will be surprised to hear that.
So were they born in Ontario and escaped, have parents/grandparents from Ontario or just spent too much time visiting Ontario and felt the need to rent?

There are many other examples. Vehicle insurance in Ontario is also insane.
 

·
Registered
Joined
·
7,151 Posts
Discussion Starter · #43 ·
Yup......a shining example where owning a water heater made no financial sense.
If the people in the article had invested the money they would have spent on a hot water tank 28 years ago.........what would that be worth today ?
How does the water tank rental company make a profit?

How does a platinum protection package make financial sense?
 

·
Registered
Joined
·
7,151 Posts
Discussion Starter · #46 ·
If those homeowners invested the money they didn't spend on a water heater into the S&P index, the return would have been......significantly more than the $400 in rental fees.

If you invested $100 in the S&P 500 at the beginning of 1994, you would have about $1,498.37 at the end of 2022, assuming you reinvested all dividends. This is a return on investment of 1,398.37%, or 10.03% per year.
You must be from Ontario

Imagine if you invested the $9k you spent on the platinum protection package instead

Hot water tanks you should own. You're doing it wrong
 

·
Registered
Joined
·
7,151 Posts
Discussion Starter · #49 ·
I hope we never have to use the insurance........but hope is a poor financial plan.
You fail at financial planning

Understandable unless you spent 10 years on a financial forum. You could have invested or saved those fees

The proof is in the results
 

·
Registered
Joined
·
7,151 Posts
Discussion Starter · #55 ·
Thankfully I am still on an old version of the contract, but if I re-upped a new rental it would be very costly to get out of it.
Yes it sounds like the new deals are much worse

Ontarians are like the frogs being warmed by their own rental heaters. They're like ah this is nice and convenient lol

The new contracts are open ended and the cancellation fees are robbery
 

·
Registered
Joined
·
7,151 Posts
Discussion Starter · #60 ·
I realize it was maybe a decade ago, but when our old HWT started leaking in the middle of the night, I got a replacement once installed in less than 12 hours for $1100. 50 gal vs the original 40 gal even. I didn't do a think except mop up a bit of water.
Insurance already has your money so there is no urgency to help you when you need it. Insurance claims can be absolute nightmares and there's nothing you can do

When you pay someone to come change your hot water tank they either do it or you'll just pay the next guy.

Getting out of these open ended hot water rental contracts sounds like a nightmare
 

·
Registered
Joined
·
7,151 Posts
Discussion Starter · #71 ·
The contracts I have read for the last three decades have been open ended with the buyout fees being robbery.
It's a question of when it makes sense to make the switch because doing it too early means the change triggers pretty much double the cost.

At the end of the day, the key problem is having to assume the contract as part of the house purchase.
More than one or two family and friends ran the numbers to figure out a better balance than paying double plus installation.
Odd ... the people I know and my hot water tank rental was on the gas bill, not the electricity bill.
Is this some sort of special arrangement?
Most of the world does not have hot water tank rentals on our utility bills so we don't know how these scams work. Nobody else in Canada rents hot water tanks, except apparently some bleed over on Ontario borders where Ontarians have tried to spread their weird practices.

The problem is not "at the end of the day" it's when Ontarians thought it made sense to rent a hot water tank but not their HVAC or anything else. Landlords put in the lease specifically that the tenant assumes the hot water tank rental even though the rule is the landlord provides essential services.

Are Hot Water Heater Rentals used throughout all of Canada?
No, they are not. In AIRINC’s research of who is responsible for paying the rental fee for hot water heaters, it was interesting to see that the issue is not universal across the country. Residents in Ontario are reportedly quite comfortable with the concept of water heater rentals, while the province of Alberta has almost no rental contracts as homeowners prefer to buy the water heater outright.
Some people just don't want the burden of shopping for a water heater and then shop for a contractor to install it. And some of them already know they are paying a premium for their peace-of-mind. It's like life insurance or travel insurance.

But recently we've learned through the mainstream news media was that hot water tank and furnace rental companies place liens against your house when you sign onto their rental contracts. And you are not aware of that until you try to sell.
It was literally 1 phone call to a plumber last time I replaced a hot water tank. Honestly it is less burden to buy a hot water tank than it is to deal with a predatory company that puts a lien on your house with an open ended contract with predatory cancelation fees

Again no other province has this (except for maybe Ontarians exporting the concept) I don't believe anywhere else in the world rents hot water tanks. Leasing a car can make sense if it's for a short duration or you always want the new model.

You don't care about the latest hot water tank model let's be honest and it's not for a short duration if it's a lien on your house that has to be sold with the house. Might as well buy
 
1 - 20 of 38 Posts
Status
Not open for further replies.
Top