Last weekend, we had a bad surprise as we found out that the water heater was leaking. It looked like it had been leaking for a couple of days, for a fairly large area of the unfinished part of the basement's floor was wet. Fortunately, the leak wasn't lagre or there would have been damage. As it is, I only had to clean up and throw away a couple of cardboard boxes.
But we had to replace the water heater. So we went shopping. We decided to go with a top-quality water heater from GE, because of the better insulation (which means better energy concumption) and longer warranty (12 years). The difference in price between top-quality and entry-level quality for a 60-gallon water heater is only about $200-300. Installation fees are the same. They last twice as long, minimum, so the difference in price was worth it, on our opinion.
On top of that, we used the seller's installation service. It was similar in price to another quote we got on the service, and by taking it we automatically extended the warranty to lifetime.
One bad surprise I got was that we had to replace the cabling for the water heater, because the old electrical cabling was not adequate (no ground). That meant calling an electrician, which proved to be tough for a short-notice call. I had to make quite a few calls to get that done on the same day.
Cost of the water heater (including installation): $900.
Cost of the electrician: unknown (they will send me a bill by mail). I estimate this will be about $150-200.
The water heater was paid using my credit card. If necessary, I will draw from the home line of credit to pay this when my credit card statement comes in next month, but I will try to avoid doing this if possible.