New Water Heater

A few weeks ago our water heater stopped working, so we had a plumber come out and take a look.  He told us that we needed to get our water heater replaced, and that he would be happy to do it for 1200 bucks.  We decided to shop around, and sure enough Lowe's and Home Depot were each charging between $1000 and $1200.  Why so expensive?  The main reason is that the city of San Jose requires a permit which runs about $200 or so.  I called around to different plumbers, some of which quoted prices with that permit while some didn't, and asked them about it.  They told me that very few people actually buy the permit and no one ever checks to see if you have it.  So their recommendation was to not bother getting it.  With that to consider we finally found someone to come change out our water heater.  But for them to do it I had to go buy a water heater, drain the old one, and dispose of the old one after he changed it out.  I held up my part of the deal and he did too, and he only charged me about $150.  So the water heater and installation (not including permits) ended up running about $700.  It just goes to show if you shop around a little bit and are willing to do some of the work yourself you can save some money.
      On a side note I wanted to put in a tankless water heater since they take up less space, should save energy, and theoretically should last about twice as long.  But all the prices I got quoted were between 2 times and 4 times what it would cost to change out the hot water heater.  Because of that I decided to keep it simple and just to the water heater change.