Should You Buy or Rent Your Modem to Save Money?

Congratulations! You picked an internet provider. The hard part is over, right? Well, almost.

After you select your speed — and your bundle, if you go that route — you need to make one last decision: Rent a modem and router from your provider or buy your own.

Running the numbers makes the decision easy.

The case for buying

You need a modem for your internet to work. If you want Wi-Fi, you’ll need a router, too.

Internet providers typically charge $10 to $15 per month to lease an all-in-one modem and router. So, over two years, you’ll pay $240 to $360 for your modem-router combo.

But you can purchase your own modem and router, separately or in a combo unit, for less than the cost of renting.

A Netgear high-speed cable modem-router combo sells for around $70 on Amazon and is certified to work with a variety of cable internet providers.

Want to get the latest, top-rated equipment? You’ll still save in the long run if you buy.

The Arris SURFboard SB6141 cable modem and Google’s Wi-Fi router are rated best overall by multiple outlets and together cost almost $190. That’s still $50 less than renting a modem and router combo for two years from Comcast, Time Warner Cable or Cox Communications.

Most tech experts suggest opting for a separate modem and router over a combo unit. The reason: You can get more out of your router — features, settings and power — if it’s a stand-alone unit.

When to rent

Buying your modem and router will save you money in the long run, but there are a few scenarios in which renting makes sense.

– You have roommates. Splitting the cost of a modem and router is easy. Figuring out how to divvy up the device should one or more roommates move out — not so much. Unless you can settle on a system that works for everyone, renting and splitting the bill will likely save headaches down the road.
– Your employer foots the bill. Some lucky folks don’t pay for their internet service. Instead, their company pays the monthly bill. They may not pay for equipment, though. If that’s you, don’t dig into your wallet for a new modem.
– You’re moving soon. If your living situation is temporary, renting might make the most sense. Especially if you don’t know where you’ll land next and what your internet options will be when you get there. That said, if you know those things, you might be able to buy equipment that will work when you settle into more permanent digs.

If you’re particularly tech averse, you may also be inclined to rent, since your internet provider may offer free troubleshooting and repair services only on modems leased or purchased through it. Just keep in mind that most modems and routers are easy to set up and require little to no fiddling once they’re up and running.

Tips for buying a modem and router

Routers are universal and can be used with any internet service provider. Modems are a slightly different story.

First, you need to make sure the modem’s compatible with your internet provider.

Most carriers have a list of approved modems on their website and many major providers allow the same devices. So you can often keep your modem if you switch providers, as long as it’s the same type of internet service (cable, DSL or fiber).

Some providers, like Verizon Fios, don’t let customers use their own equipment. But Fios customers can opt to buy their modem directly from Verizon, an option that will save you roughly $90 over two years compared with renting.

The next step: Make sure the modem has staying power. This rule applies even if you’re buying it directly from your provider. Internet speeds are only getting faster and older modems — those with DOCSIS 2.0 technology — top out at 38 Mbps download speeds.

If you’re paying for internet speeds of 30 Mpbs or higher, or think you might in the future, spring for a model with DOCSIS 3.0 technology. These support speeds up to 150 Mbps, which is plenty fast for even the most connected families.

Once you’ve settled on a compatible modem, consider buying a used or refurbished model. You’ll save even more money and lose little to nothing in terms of performance. Just make sure you’re clear on the return policy should you have any issues.

Pay upfront to save long term

Buying a modem and router will increase your upfront costs, but lower your monthly internet bill. Most tech experts suggest buying separate devices, but a combo unit will get the job done if you’re trying to keep things simple. Either way, you’ll save money in the long run. And that’s always a smart decision.

Kelsey Sheehy is a staff writer at NerdWallet, a personal finance website. Email:ksheehy@nerdwallet.com. Twitter: @KelseyLSheehy.

Updated March 1, 2017.

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