the humid garage air hits the cold metal, and condenses just like a glass with ice sweats. Adding insulation may not stop the unit from slowly sweating because the moisture will still get to it thru open cell or fiberglass insulation, fi you use it - which is usually the less costly and what is easiest to use. Also adding insulation right to it can be a fire hazard if the wrong kind of insulation is used. You need either closed cell insulation, insulation and a vapor barrier, or put it in conditioned space where the humidity is lower. I'd build an enclosure and find a way to condition that space. Keep in mind that if it is a gas furnace also, there will be an issue with air supply to the enclosure. Putting a fan on it may make the sweating worse if it simply makes more moist air flow across it.