Modem vs. Router: Should You Buy or Rent?

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Last Updated: May 6, 2022 | Published: Dec 6, 2018

When setting up your home network, you’ll need to decide whether to buy or rent a modem and router. The amount you spend in a year to rent a modem or router may be equal to the cost of buying one. Depending on the circumstances, though, renting a modem or router may be the better choice.

Our guide helps you explore these options so you can make an informed decision. But first, let’s look at the basics.

What Is the Difference Between a Modem and Wi-Fi Router?

In order to connect to the internet, you need a modem and Wi-Fi router. Many people confuse modems and routers because internet service providers (ISP) often offer combo devices that serve both functions. Modems and routers, however, are two completely different technologies. Each device has a specific purpose, which we break down below.

A gateway, or router and modem combo.
Most ISPs provide gateways, a modem and router combo, so you don’t have to worry about buying or renting two separate pieces of equipment.

Modem

Modems connect your Wi-Fi network to your ISP. They translate digital signals from your ISP so your wired or wireless devices can access the internet. Like your computer, modems use an ethernet connection to connect to your router. Typically, modems have two connection ports: one that connects to your ISP and one that connects to your Wi-Fi router. There are three types of modems:

  • Digital subscriber line (DSL): This connects a router to an existing telephone line through a phone jack.
  • Cable: Cable modems provide high-speed internet using coaxial cables that receive data from an ISP.
  • Fiber-optic or optical network terminal (ONT): The most advanced type of modem, it uses fiber-optic cables to transmit signals.

Wi-Fi Router

Routers connect your devices to a modem with an ethernet cable. They create a Wi-Fi network for multiple devices to connect wirelessly and simultaneously to the internet in your home. A range of frequencies (wireless band) transmits data from your router to your devices. There are three types of routers, depending on the wireless band:

  • Single-band: Uses either the 2.4 GHz band or the 5 GHz band
  • Dual-band: Uses both the 2.4 GHz band and the 5 GHz band
  • Tri-band: Uses the 2.4 GHz band and two separate 5 GHz bands

If you want to increase your Wi-Fi network speed, then we recommend using a dual-band or tri-band router.

The key difference between modems and routers is that modems can only provide internet access via ethernet cables, while routers can’t send or receive data without a modem. You can have a modem without a router, but not vice versa. Some ISPs offer a modem-and-router combo — also known as a gateway — which simplifies the renting or buying process and saves you space with one piece of equipment instead of two.

Renting vs. Buying a Modem and Router

In 2020, the average cost of renting a modem in the U.S. was almost $10 per month, while buying a modem cost an average of $127. Depending on your needs and budget, the choice between renting and buying can make or break your bank.

Pros and Cons of Renting a Modem and Router

You typically don’t need to put a lot of thought into which modem and router to rent. Your ISP will generally recommend one based on the service you signed up for. Renting saves you time because your ISP takes care of everything for you, but there are other pros and cons.



Pros

  • Low-maintenance costs and free technical support
  • Ideal for short-term living situations
  • Regular software updates included in the rental cost
  • Free replacements for malfunctioned devices


Cons

  • Monthly rental fees add up over time
  • Can’t sell or use with another ISP
  • Costs are subject to change
  • Might receive outdated hardware



Pros and Cons of Buying a Modem and Router

Unlike renting, buying a modem and router requires paying careful attention to each device’s features to get the most out of your investment. The table below offers a rundown of the pros and cons of buying.



Pros

  • Easier to switch ISPs when you own a compatible modem and router
  • More high-performance modem and router options
  • A one-time investment


Cons

  • Higher up-front costs than renting
  • No tech support from ISP
  • May need a tech professional, which may result in installation fees



Buying a Modem

Modem prices depend on the brand and type. You’ll pay more up front to buy a modem, but you’ll likely save money in the long run. You can use your modem with any ISP as long as it’s approved and compatible with the company’s service, and then resell it when you no longer need it.

Consider the following factors before buying your own modem:

Internet Connection Type

The type of internet connection you have will determine the modem you need. If you have a cable internet connection, for example, then you’ll need a compatible modem. Always check the specifications and upgradeability. If an ISP doesn’t list modems compatible with its service, then give customer service a call.

Another aspect of modems to look out for is data over cable service interface specification (DOCSIS). It’s a set of standards that allows high-speed data transfer over coaxial cables. The DOCSIS specifications come in ratings such as DOCSIS 1.0 and DOCSIS 2.0. The current rating is DOCSIS 3.1, which can support up to 10 Gbps. It’s a good investment if you want to improve your internet speed and performance.

Speed and Bandwidth

Your modem’s speed and bandwidth should be able to handle your internet usage. The speed is measured in megabits per second (Mbps); the higher the Mbps, the faster your internet connection will be. If you want the fastest speeds possible, then take a look at the best gigabit internet providers.

Bandwidth is the maximum amount of data that can be transferred in a given time. It’s usually measured in megabits per second. If you have a 25 Mbps internet connection with a bandwidth of 100 Mbps, for example, you can download data at a rate of 25 megabits per second. But the maximum amount of data that can be transferred in a given time is 100 megabits.

Think about the number of devices you will have connected to the internet and the activities you perform with them before homing in on a certain modem.

Buying a Router

Like modems, the technical aspects of routers can be confusing. As long as you have some basic understanding, then you’re set. Your goal is to buy a router that can handle the same speeds as your modem. Here are some factors to consider before making a purchase:

Network Type

Routers generate Wi-Fi networks and use the latest Wi-Fi standard. You should know and care about two types of network:

  • 802.11ac is the latest and fastest network type. It’s also backward-compatible with 802.11n devices. If you have a lot of devices that connect to the internet wirelessly, then this is the best option. It’s also the more secure Wi-Fi network.
  • 802.11n is an older standard with speeds up to 600 Mbps. It’s not as fast as 802.11ac, which has a 1 Gbps throughput, but it has a longer range.


Beamforming

Beamforming directs wireless signals to where they’re needed most. It’s especially beneficial if you have devices far from the router or in difficult-to-reach places. Beamforming also compensates for the reduced broadcast area of Wi-Fi over the new 5 GHz band supported by new 802.11ac and 802.11n routers.

Dual-Band

A dual-band router allows you to use the older and slower 802.11n network or the newer and faster 802.11ac network. It splits your devices on two bands — 2.4 GHz and 5 GHz — to increase the available bandwidth and boost speeds. By using the 2.4 GHz band on the older 802.11n network and the 5 GHz band on the latest 802.11ac network, you reduce the chance of running into common issues when devices share the 2.4 GHz band with 802.11ac devices.

Dual-band network routers are more expensive than single-band routers, but they’re worth the investment if you have multiple devices that connect to the internet wirelessly at the same time.

Modem and Router Provider Costs and Fees

The up-front cost of purchasing a modem or router can be higher than renting one, but you will save money over time by owning your equipment.

Internet provider Cost of renting a modem Cost of buying a modem
CenturyLink $15 per month (router included) $150 (includes a router and 1-year warranty for replacement or repair)
Xfinity $14 per month (router included) Price depends on third-party modem that’s compatible with and approved by Xfinity
Suddenlink $10 per month (router included) Price depends on third-party modem that’s compatible with and approved by Suddenlink
Windstream $9.99 to $11.99 per month (router included) Price depends on third-party modem that’s compatible with and approved by Windstream
AT&T $10 per month (router included) $100 to $350 (router included)

If you do the math, then you’ll realize buying a modem-and-router combo is cheaper than renting from an ISP. Remember that buying the equipment requires some level of research, including compatibility with your ISP, in order for the savings to be worthwhile.

Renting vs. Buying: What Is the Right Choice for Me?

Consider your budget, whether you prefer short- or long-term investments, and if your ISP offers a modem-and-router combo so you don’t have to pay two separate equipment fees. Ask yourself the following questions: Am I planning to move soon? Do I need the latest technology? How much am I willing to spend up front? Depending on your answers, one option may be better than the other.

Frequently Asked Questions About Modem vs. Router

How long should modems last?

Modems generally last between two and five years. High-end modems typically last for at least five years, while lower-end modems last for two to three years.

Why do I need both a modem and a router?

If a modem-and-router combo isn’t an option, then you need both pieces of equipment. The modem connects you to the internet while the router delivers the internet to your devices wirelessly by creating a Wi-Fi network.

Do modems affect internet speed?

Yes, modems can affect internet speed. If you have an old or slow modem, then it can decrease your connection speed.

Can a router work without a modem?

Yes, a router can work without a modem, but the router can’t connect to the internet without a modem.

Is it cheaper to buy a modem and router separately?

It isn’t cheaper to buy a modem and router separately since you will have to cover each device’s repair and replacement costs.