Renting vs. Buying a Modem and Router
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If you’ve ever looked at your internet bill and wondered why you’re paying an extra “equipment fee,” you’re not alone. Many internet providers charge a monthly fee to rent a modem, router, or a combo device, called a gateway.
You have options. In many cases, you can rent your equipment from your provider, buy your own, or use a hybrid approach: buying your own router and using the provider’s modem.
This guide shows you the pros and cons or renting vs buying a modem and router to help you decide which is the right choice for your budget and needs.
Key Takeaways: Modems, Routers, and Gateways: Rent or Buy?
- Renting is simple, but monthly equipment fees can add up over time.
- Buying often pays off if you keep service long enough to hit the break-even point.
- Some plans include equipment at no extra cost, so check before you buy anything.
- Router quality and placement affect your Wi-Fi experience more than your modem does.
- Compatibility matters. A modem must work with your provider and connection type.
Quick Decision Steps: Rent or Buy?
Cut to the chase with these quick points to decide if renting or buying a modem and router is best for you.
Renting is usually better if:
- Your plan includes equipment, and you are satisfied with its performance.
- You want the easiest setup and support from your provider.
- You move often or expect to switch providers soon.
- You don’t want to troubleshoot or manage updates.
Buying is usually better if:
- You pay an equipment fee every month (average is $10 to $15 per month).
- You want better Wi-Fi coverage and features than the provider’s router has.
- You plan to stay with the same provider for at least 1 to 2 years.
- You want more control over your home network (settings, parental controls, privacy features).
What’s the Difference Between a Modem and a Router?
A modem connects your home to your internet provider’s network, and a router distributes that connection to your devices through wired and wireless networks.
“Modem” and “router” are often used interchangeably, but they are separate and handle different networking tasks. There is a device called a gateway that combines the tasks of a modem and router into one piece of networking equipment.
What a modem does
A modem connects your home to your internet provider’s network. It’s the device that “translates” the signal coming into your house into something your devices can use. However, not every internet type uses a traditional modem.
- Cable internet typically uses a cable modem (often DOCSIS-based).
- Fiber internet typically uses an ONT (optical network terminal) plus a router. Many fiber providers include an ONT as part of installation.
- DSL uses a DSL modem or gateway.
- 5G home internet and fixed wireless often use a provider-supplied gateway.
What a router does
A router creates your home network and shares your internet connection with your devices via a wired connection (Ethernet cables) or a wireless connection (Wi-Fi).
- A better router can improve range, stability, and performance.
- If you have dead zones, a newer router or a mesh Wi-Fi system can often help more than upgrading your modem.
How Much Can You Save By Purchasing Your Own Equipment?
You can potentially save $100 or more by purchasing equipment, but total savings depend on a few things:
- How much the equipment costs
- How much you pay per month to rent
- How long you use the type of internet for which the equipment is designed
Break-even calculator
You won’t realize savings immediately when you buy equipment. The up-front costs can be high, so knowing what and when your break-even point is can be a helpful factor.
Break-even months = (purchase price) ÷ (monthly equipment rental fee)
You’ll start saving money when you hit the break-even point and keep using the same equipment.
Quick break-even examples
| Example | Purchase price | Monthly equipment fee | Break-even time |
| Budget setup | $200 | $10/mo | 20 months |
| Midrange setup | $300 | $15/mo | 20 months |
| Higher-end setup | $450 | $15/mo | 30 months |
| Example | Budget setup |
| Purchase price | $200 |
| Monthly equipment fee | $10/mo |
| Break-even time | 20 months |
| Example | Midrange setup |
| Purchase price | $300 |
| Monthly equipment fee | $15/mo |
| Break-even time | 20 months |
| Example | Higher-end setup |
| Purchase price | $450 |
| Monthly equipment fee | $15/mo |
| Break-even time | 30 months |
These are examples, not rules. Your break-even point depends on your plan and how much the equipment costs.
What equipment costs today
Prices change constantly, but these ranges are realistic for most households:
- Router: roughly $50 to $350 depending on coverage, Wi-Fi standard, and features
- Cable modem: often $100 or more for a reliable model, with higher prices for faster tiers and premium hardware
- Gateway (combo modem and router): varies, but often overlaps with the midrange modem and router cost
If you aren’t sure where to spend your money, start with the router. Wi-Fi problems are more common than modem problems, and you have more equipment options to solve those problems.
How Much Are Equipment Fees?
Some providers include equipment at no charge, but most charge between $5 and $20 per month to lease a modem, router, or gateway. Equipment rental fees can show up under different names, such as:
- Modem rental fee
- Router rental fee
- Gateway rental fee
- Wi-Fi fee
- Equipment fee
What to do before you buy anything
- Look at your bill for an equipment line item
- Check your plan details to see if equipment is included
- Confirm whether you are allowed to use your own modem and router
- Ask if renting includes perks like upgrades or free replacements
When Renting is the Better Deal
Buying is not always the best option. Renting can be the smarter choice if:
- Your plan includes equipment at no extra cost. If it’s free, buying won’t save money.
- You want provider support. Providers can troubleshoot most equipment issues remotely, minimizing the need for a tech visit.
- You want easy replacements. If the rented gateway fails, the provider may swap it quickly, and the replacement may be an upgrade.
- You will switch providers soon. If you won’t reach break-even, buying may not pay off.
- You want “set it and forget it.” Some people value convenience more than long-term savings.
Benefits of Owning Your Modem & Router
Besides cost savings, the biggest boon to purchasing your modem and router is that you cand choose the equipment you want and need for how you use the internet. Do you have thick walls or a large house that would benefit from a mesh router? Does your online gaming require a router that minimizes lag during crucial rounds? When you buy, you’re in control of how much you spend and the specs you need. Beyond that, you’ll also have:
- Long-term savings if you are currently paying a monthly equipment fee
- Better Wi-Fi coverage options, including mesh systems for larger homes
- More control over your network settings and security features
- Freedom to upgrade on your schedule, not your provider’s schedule
- Potentially better performance if the provider equipment is outdated or underpowered
Keep in mind that owning gear means you are responsible for selecting compatible equipment, updating it, and repairing or replacing it if it malfunctions.
Selecting a Modem & Router
Modems and routers are sold separately or as a combined gateway. Most experts agree that separate devices will yield higher performance, but if you’re after maximum savings a gateway will work just fine. Use this checklist before you purchase anything to save time and make an informed decision.
Step 1: Confirm your connection type
Different types of internet services require different types of networking gear and will determine what you need.
Step 2: Check your provider’s approved list (especially for modems)
For cable internet in particular, modems have certain specs, such as DOCSIS 3.1 or newer, to be compatible with modern cable internet networks. Check your provider’s equipment compatibility list before buying any equipment.
Step 3: Match the modem to your speed tier
Modems and routers come in different price points with different capabilities. Be sure that the equipment you’re buying is capable of the speeds you’re paying for, as well as not too much (and too expensive) for a lower-tier speed plan.
Step 4: Choose a router based on your home and device count
Some homes and households call for more advanced equipment based on their size, layout, and the number of people using the internet. Consider the following when selecting a modem, router, or gateway:
- How big is your home?
- How open is the floor plan? (More open means more efficient Wi-Fi distribution.)
- How many devices are connected at once?
- Do you have dead zones?
- Do you work from home or game online?
If you have dead zones, consider a mesh system or moving your router to a better location.
Step 5: Pick a Wi-Fi standard that matches your needs and budget
As all technology does, Wi-Fi standards advance and improve. Depending on your needs, you could get away with an older, less expensive standard. But if your needs are demanding, getting the latest Wi-Fi technology, although more expensive, may be the best solution.
- Wi-Fi 5 (older)
- Wi-Fi 6 (common modern choice)
- Wi-Fi 6E (adds a 6 GHz band, useful in congested areas)
- Wi-Fi 7 (newer and higher-end)
Wi-Fi 6 is ideal for most households. Wi-Fi 6E is better if you live in an apartment where there are many other networks or have other sources in the home that create interference.
Rent or Buy: The Quick Way to Decide
Weighing the convenience of renting equipment from your internet provider against the savings and customization potential of purchasing your modem and router is ultimately a personal choice.
FAQs: Renting vs Buying a Modem and Router
It depends on your monthly equipment fee and how long you keep service. If you’re paying a rental fee each month, buying your own gear often becomes cheaper once you reach the break-even point. If your plan includes equipment with your internet plan, renting may be the better value. (To estimate your break-even point, divide the purchase price by the monthly rental fee.)
Many internet providers charge $10 to $15 per month to rent a modem, router, or gateway, but the price varies by provider and plan. Some plans include equipment at no charge, while others add separate fees for Wi-Fi features or gateway rentals. The best way to know what you’ll pay is to check your bill and your plan details.
Renting can be a smart choice if you want the simplest setup and built-in support from your provider. It also makes sense if you expect to move or switch providers soon, since you may not keep the equipment long enough to break even. Renting can also be worth it when your plan includes equipment, or when you want hassle-free replacements and upgrades handled by the provider.
In most cases, you can use your own router with nearly any provider, since routers work across many connection types. Modems are more restrictive because they must be compatible with your provider and the type of internet you have (such as cable internet or DSL). Fiber internet usually requires an optical network terminal (ONT) versus a modem. Before buying anything, confirm compatibility with your provider to avoid activation issues.
Usually not. Fiber internet commonly uses an ONT (optical network terminal) that is provided by the fiber provider instead of a modem. You will still need a router, or a mesh Wi-Fi system, to create your home network and provide Wi-Fi.
Return the equipment using your internet provider’s official process and keep proof of return, such as a receipt or tracking number. Then check your next bill to confirm the equipment fee has been removed. If the fee still appears, contact customer support and provide your return documentation so they can correct the charges.
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