Should You Rent or Buy Your Modem and Router?

• Modems connect you to your internet service provider (ISP), while routers connect your devices to your Wi-Fi network.
• Renting a modem and router is convenient and comes with free tech support, but some ISPs charge substantial monthly fees that outweigh the overall price of buying these devices.
• Whether you choose to rent or purchase a router will depend on your budget, comfort with technical troubleshooting, and what your current internet provider offers.

When setting up your home network, you must decide whether to buy or rent a modem and router. The amount you spend in a year to rent a modem or router may equal (or exceed) the cost of buying one. Depending on the circumstances, renting a modem and router may be the better choice. This guide will explore these options so you can make an informed decision. But first, let’s look at the basics.

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Renting vs. Buying a Modem and Router

Renting a modem and router can cost around $10 to $15 per month, while buying a modem costs an average of $127. However, many providers will provide this equipment free of charge. If you can get yours for free, you can avoid buying things outright.

If you want more control over your home network (like me) — with a mesh Wi-Fi network, for instance — renting a modem might still make sense. That’s because modem requirements can vary from provider to provider, while routers are more or less universal.

What’s the Difference Between a Modem and a 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 ISPs 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 explain below.

Modem

A modem connects your Wi-Fi network to your ISP. It translates digital signals from your ISP so your wired or wireless devices can access the internet. A modem uses an Ethernet connection to connect to your router (if it isn’t a combo device). Typically, a modem has 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: A cable modem provides high-speed internet using a coaxial cable that receives data from an ISP.
• Fiber-optic or optical network terminal (ONT): The most advanced type of modem, it uses a fiber-optic cable to transmit signals.

Wi-Fi Router

A router connects your devices to a modem with an Ethernet cable. It creates a Wi-Fi network for multiple devices to connect wirelessly and simultaneously to the internet in your home. A range of Wi-Fi frequencies (wireless band) transmit 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 (or a 6 GHz band)

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 a modem and a router is that a modem can provide internet access only via an Ethernet cable, while a router 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.

>> Related Reading: The Best Wi-Fi Routers, Tested and Reviewed

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 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. Buying a modem can save you a lot of money over time, but there are some drawbacks you should consider.

Buying a Modem

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.

Modem prices depend on the brand and type. You’ll pay more upfront 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. 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 Mbps. If you have a 200 Mbps internet connection with a bandwidth of 100 Mbps, for example, you can download data at a rate of 200 megabits per second. However, 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 choosing 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 networks:

• 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 5 GHz band supported by 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 into 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 upfront cost of purchasing a modem or router can be higher than renting one, but you will save money over time by owning your equipment. Consider the monthly prices and potential yearly costs below for your internet provider, then weigh that against buying your own equipment.

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 upfront? Depending on your answers, one option may be better than the others.

Frequently Asked Questions About Modem vs. Router

How long should a modem last?

Modems generally last between three 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.