Is it time to replace the furnace?
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But the most important consideration is safety.

With today's newer closed-combustion power-vented units, problems of backdrafting (when exhaust fumes get pulled in through the chimney) or the dispersion of carbon monoxide into the home via a cracked or corroded heat-exchanger are essentially impossible, thanks to the use of multiple safety devices and electronic sensors.

High-efficiency "condensing" furnaces are made with components that are much less vulnerable to corrosion caused by condensation within the unit.

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What about oil heaters?
Owners of older chimney-vented oil-fired furnaces don't necessarily face the same safety concerns posed by natural gas and propane, since oil-fired boilers and forced-air furnaces tend to be stronger and much less likely to produce carbon monoxide. Because they were built like Sherman tanks and require regular annual maintenance and cleaning by a qualified service technician, many of these units hum along safely and reliably for decades.

Yet today's best chimney-vented oil-fired furnace is only 86 percent steady-state efficient, says Tom Wilson, owner of Viroqua, Wis.-based Residential Energy Services.

So if you aren't planning on switching from oil to a much more efficient gas-fired furnace, you might not realize great savings by replacing a 15- to 20-year-old furnace with a new one. Unless they are more than 22 years old, in fact, most oil furnaces provide owners with an efficiency that can exceed that of chimney-vented gas or propane furnaces of similar age.

"It would not be my first choice to replace a standard efficiency oil furnace with a newer unit," says Wilson. He wouldn't choose to be an early adopter of a new super-high-efficiency "condensing" oil furnace, either. The technology is too new to have a track record for reliability or longevity, he says.

However, he believes that owners of older oil-burning furnaces and boilers (steady-state 75 percent or AFUE 60 and lower) could benefit from upgrading their older units with a newer standard-efficiency flame-retention head burner, which typically has an AFUE of around 80, or upgrading the entire furnace so that it heats with greater efficiency.

"Of course, this would all be contingent upon how tight and well-designed the existing ductwork is, how well-insulated and sealed the home is, the overall condition of the furnace, and so on. You cannot just focus simply on upgrading only one component of the whole-house system. Before you do anything, you need to take a holistic approach and have a qualified consultant or contractor examine everything so that you can make the right decisions."

Consider oil supply
A critical consideration would be the continued availability of heating oil as a fuel in your particular area. In some parts of the country, a decreasing number of suppliers are delivering oil, and fewer technicians are servicing or installing oil furnaces.

So if there's a possibility of winding up orphaned on both fronts in the near future, consider replacing an old oil-burning furnace or boiler with a natural gas-fired unit. This is preferable to propane or electric furnaces, which are much more expensive to operate.

Consumers with a furnace that's 12 years old or younger don't need to worry about replacing their unit just yet. Instead, they should spend some time and money to insulate and tighten up their home and perform the proper maintenance on their heating system. The American Council for an Energy Efficient Economy offers several online guides filled with tips and energy-saving suggestions.

Before upgrading your furnace, consider the factors in the sidebar, "Steps to take before investing in a new furnace."