Should I Rent Or Buy My Modem?

If you’ve ever signed a deal with an internet service provider (ISP), you know that they ask you to pick between renting a modem from the ISP or buying it. Especially for internet users who aren’t tech-savvy, choosing between purchasing a modem and renting one can be confusing.

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The ISP knows exactly what kind of modems work best with their service, and they will offer you the one that they think is the best for your needs to rent. But they might charge too much or be providing you with a modem that doesn’t have all the features you’ll need.

On the other hand, buying a modem is hard because most of them appear to have very similar characteristics, but not all modems will be compatible with all ISPs. So, what’s a consumer to do?

In this article, we’ll discuss the pros and cons of buying your modem versus renting it. By the time you’re done reading, you’ll know exactly what the right course of action is for your new ISP subscription.

Why Do I Need To Choose?

If you can’t conclude regarding whether to rent or buy your modem, you won’t be able to get online. You may be extremely lucky and find that an old modem works with your ISP, but you shouldn’t bet on it. When you start a new ISP subscription, you’ll almost certainly have to get a new modem in your home somehow.

If you had a modem that was compatible with the same ISP in prior years, you still might need a new modem. ISPs keep a small stable of compatible modems, and older modems are no longer supported. These older modems are deprecated on a regular basis.

Especially if you have had your current modem for more than two or three years, it probably won’t work optimally with your ISP because of its age or lack of support. Starting a new subscription with your ISP is an opportunity to get ahead of the technology curve rather than being behind it.

Newer modems are faster and have more features which protect you from malware. In contrast, older modems lack the internet of things functionality and many essential traffic routing features that newer modems have.

You may not think that you need these things, but if you use the internet for anything other than email, you will benefit from them.

The Case For Renting

Renting your modem can be a good choice provided that your ISP offers competitive rates and you don’t intend to be sticking with that ISP for very long. When you rent from your ISP, you’ll have to go through the following process:

  1. Signing the contract with your ISP
  2. Paying a deposit for the modem
  3. Collecting the modem from the technician or the mail
  4. Installing the modem
  5. Configuring the modem with the help of your ISP
  6. Using the modem
  7. Making monthly payments on the modem
  8. Returning the modem after your contract with the ISP ends

For most people, the only major hassle with this process is the very last item. When you are moving apartments, sometimes the last thing you want to worry about is mailing back an old modem that you were renting from your ISP.

Sending a modem back can be costly, and you may not get your deposit back for a few months. You could potentially use the modem at your new place, but there isn’t much reason to suspect that you can unless you are staying with the same ISP.

Make no mistake: renting a modem helps you avoid the following issues:

  • Picking out a modem that works with your ISP
  • Configuring the modem to usable settings
  • Overspending on a modem whose features you don’t need

The back of the napkin math can work out when you rent a modem. If you pay $7 per month for your modem, the point at which you will start to lose money relative to buying will probably be at around a year.

So, if you only plan on being with a given ISP for a couple of months, you should probably rent a modem from them to save money.

Pros:

  • Can be cheaper over short periods of time
  • Provides best compatibility with ISP technology
  • Rented modem will be current generation
  • Configuration will be much easier and potentially mostly remote

Cons:

  • More expensive in the long term
  • Unlikely to be a top-of-the-line modem
  • Configuration may be locked down
  • Requires returning modem to ISP
  • Requires paying a deposit

The Case For Buying

What should you do if you plan on settling down in one spot for a long time? Buy a modem.

Buying a modem might seem scary, but there are a plethora of buying guides on the internet to help you. Likewise, your ISP will maintain lists of compatible modems down to the exact model number. Many ISPs let you purchase these modems directly from their site at a very small premium.

When you buy a modem, you’ll probably spend anywhere between $50 and $200 for a standard consumer grade unit. For most people, modems will cost close to $100. It’s only when you need special features or want top of the line quality that you will end up paying significantly more.

It is worth noting that when you want these more powerful features, purchasing the modem is probably the only way that you will get them. ISPs rarely rent out the top quality modems of the current generation and tend to rent middle-of-the-road models that are sufficient for most users.

The speed of your internet connection is a consideration, too. If you have a very slow internet connection via your ISP, you probably are not going to need a powerful modem to make the most use of the speed that you can muster.

On the other hand, if your ISP provides you with a “fat pipe” with a ton of bandwidth, they may intentionally rent out modems which cannot use the entire potential of the connection.

But why would ISPs do this? The answer is economics. If an ISP can rent most of its users modems that don’t use all that the ISP provides — or even a significantly large minority — they can save a huge amount of money.

They’re selling you a subscription for something that your modem physically can’t take advantage of. It looks good for their marketing efforts and prevents them from giving every user the ability to max out the connection and make the company lose money.

A few of the largest ISPs use these nasty tricks, so you may want to buy a modem to make sure that no matter your connection speed, your hardware can keep up.

If you are worried about properly configuring your modem, don’t be. Most modems have extensive technical support documentation which makes setup as easy as plug-and-play. Though there are exceptions, these exceptions are typically clearly indicated.

For instance, the fastest and most fully-featured modems may require a bit more setup than the slower modems, but you will understand that this is the case based on the advanced features that it offers.

In conclusion, you should buy your modem if you intend on staying with your ISP for a long time, if you want extensive features from your modem, and if your ISP is playing money games with the modems which it rents out.

Don’t get scared by the technical aspect of modem purchasing and configuration. Many other people have been where you are and have a functioning internet connection.

Pros:

  • Less expensive than renting in the long run
  • Provides access to most powerful modems and features
  • Can be resold if you decide to switch ISPs
  • No need to return the modem when your contract finishes

Cons:

  • Need to configure modem
  • Need to pick a compatible modem
  • More expensive up front
  • Less access to ISP technical support if there is a problem

Which Is Best For Me?

If you have read through the entire article so far and you still aren’t sure whether to buy or rent a modem, you should probably consider renting a modem as the preferable choice if you don’t plan on moving to a new area anytime soon.

When you don’t have strong preferences or a strong desire to pick the most economically optimal choice, going with the lower-hassle solution is usually the better way.

The hassle of returning a rented modem is very substantial — but it’s a hassle you won’t have to worry about if you are mostly stationary, and it’s a hassle that will occur during the larger hassle of moving from one place to another, which may be preferable.

There’s something to be said for getting all of your hassles out of the way at once, which renting will effectively allow you to do while providing a very low barrier to entry. Especially if you are not technically inclined or are overtly technology-apathetic, renting is the easy way out.

On the other hand, if you have enough technical skill to pick your own TV and set it up, you have enough technical skill to set up a modem. You also have enough consumer sensibility to purchase a decent modem.

If you have ever bought an over-the-counter product that your doctor has suggested to you, you have enough mental competency to pick one of the correct modems for your ISP from their list of sanctioned modems.

So you don’t need to worry too much about making a mistake if you are reading what they wrote. Configuring the modem is marginally more difficult, but it’s a tiny amount of struggle followed by a long period of a better economic proposition.

Especially if you are trying to save money, buying a modem will probably be the better choice even though it costs more up front.

What If I Change My Mind?

If you change your mind, you don’t need to worry. You can typically return modems to the store for longer periods of time than you could with other devices because of how simple they are in comparison.

Likewise, if you are renting a modem from your ISP and think that purchasing a modem would be a better choice, you can easily opt out of renting. There is most likely an interface on your ISP account where you can return your current modem and use new hardware.

You should be aware that switching from rented hardware to your purchased hardware will require another configuration process, which may be a little bit messier than if you were configuring a fresh modem that you purchased.

Brett Gordon
 

Brett is the founder and editor-in-chief of GetInternet. Having clocked tons of time in the broadband industry, today, he’s dedicated to positioning GetInternet as a prime resource simplify the broadband shopping experience. He enjoys traveling, reading, and swimming.

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