Should I replace my conventional interior water heater with an exterior tankless model?
Your salesman is evidently an idiot. Perhaps you want to do more shopping and find a vendor with smarter people working for them.


You already have the space.
The space is well-located for short pipe runs to the bathrooms and
has plumbing in place.
Presumably the old water heater has a fuel supply and venting means, or you might have mentioned that as a concern.
Evidently it freezes in your area.