Renting vs Buying a Modem

If you have a broadband internet connection, you likely already have a modem from your service provider. But if not, is it better to rent or buy a modem?

In this guide, we help you understand everything about renting or buying a modem so you can make an informed decision.

What is a modem and what does it do?

For the WiFi at your home or office to work, you need two things: a router and a modem. A router uses an Ethernet cable to connect to a modem and then broadcasts the internet or WiFi around your house. A modem connects to the phone jack or coaxial cable in your wall. It then interprets and translates the incoming internet signal to the language your digital devices understand.

More often than not, modems and routers are combined into a single device to form a wireless gateway. The equipment offered by your service provider will most likely be a combo like this. But if you have other online needs, it may be better to buy them separately so you can update one or the other for future home networking needs. 

Why do internet service providers rent modems?

Internet Service Providers or ISPs rent modems for a simple reason: to streamline the process of keeping their customers connected. Not all internet users are tech-savvy, and many do not want to mess around with their network and hardware settings. All they want is for their internet to function without any glitches. 

In addition to providing easy setup, ISPs earn substantial revenue from renting modems to customers. Many customers prefer having a single service provider rather than multiples. 

Buying a modem vs. renting a modem

There is much debate on which option is best and more cost-effective in the long run. Either way, you might wonder how to go about renting and buying a modem in the first place. Here, we get into the nitty-gritty to help you decide what’s best:

What is the process of renting vs. buying?

Buying a modem is easy. Visit a service provider or choose one online and purchase the one you like the most. You can easily buy your own modem separately for less than the total cost of renting it. To rent a modem, get in touch with your local ISP and rent it from them. Most provide a modem for rent along with your internet plan. Some include rental fees within the plan price itself, while others charge the rent separately.

What is the price for renting vs. buying?

While you can purchase a modem for between $60 and $120, renting one costs $5-$10 per month — significantly more over a long period of time. If you purchase, you will already have paid for more than a year’s worth of rent. 

Pros of renting vs. buying

The best part of renting a modem is that they usually come with customer support and complimentary repair services. Moreover, with a rented modem, you get guaranteed compatibility with your internet connection and regular software updates for optimal internet experience.

If you are buying a modem, equipment and repair upgrades can be an issue after the warranty expires. You’re on your own to fix them. Customer support options are also quite limited once the device gets too old or your warranty expires.

Cons of renting vs. buying

When compared to purchasing a modem, the monthly rental payment is quite high. It’s ultimately cheaper to buy a modem than to rent it every month. In most cases, you will mitigate the one-time cost within a year or two.

When to rent a modem

Although renting may be more expensive in the long run, it can be a better option in certain cases. Here are some of the scenarios where renting makes the most sense:

When you are moving to another place

Renting is good for temporary solutions. For instance, if you’re planning to move and don’t know what the internet options will be. A purchased modem might not be compatible with your new service provider.

When you want to switch to another ISP

For compatibility and speed guarantee, most ISPs recommend using their preferred modems. In such cases, renting makes more sense, so you don’t have to deal with connectivity issues from an incompatible purchased modem later.

When you do not want to handle the tech part

While modems are easy to configure, many of us don’t want to get into the hardware side of the internet connection, which can involve connecting cables and even configuring the gateway for the wireless network. If things go wrong while configuring the modem you bought, you won’t have tech support to help you troubleshoot.

When you are not sure which modem will work best

With numerous models on the market, selecting the right modem can get confusing, especially if you are not as tech-savvy. Renting is a good option here, as the provider will choose the device that’s most compatible with your connection.

When to buy a modem

When you want to save money

If you want a one-time solution that is also more cost-effective, consider purchasing. Buying requires an initial investment, but if you do the math, you will save $60 to $120 every year over renting.

When you want better network range across your home

Most ISPs offer a combo device consisting of a modem and router with standard WiFi coverage, which connects a limited number of devices and is suitable for smaller households. However, if you are living in a larger house, more than 2,000-3,500-square-feet, you will need a long-range WiFi router to get reliable coverage. A long-range router will also allow connecting more devices to the network. Buying a separate modem or a powerful combo device is necessary here.

When you want to get the latest equipment

Buying a modem makes sense if you want to future-proof your system. For example, the latest devices that meet DOCSIS 3.1 specifications will offer better connectivity and similar speeds across all your connected devices. With support for speeds up to 10 Gbps, these modems are extremely useful for your gigabit internet connection.

When you can easily manage the tech

If you don’t mind the limited tech support and can troubleshoot on your own when your modem acts up, buying is a good and more affordable option. 

What to think about when considering buying a modem

Try to maximize your investment and get a device that supports all your household activities efficiently. Make sure you know the minimum download speeds you need to make sure you get a modem that delivers the ideal experience. If you think you might upgrade your broadband speed or home network at some point, consider buying separate units.

Before you rush to buy a new modem, check if the model is compatible with your ISP. It’s also worth calling to see if they plan to upgrade their services anytime soon. It will help you future-proof your purchase.

Bottom line 

Renting and buying a modem each come with their own set of pros and cons. In most cases, buying is more cost-effective in the long run. However, renting makes sense if you need a temporary solution or want to avoid compatibility issues.