When you sign up with an internet provider in your area, you receive a modem and router to set up your home network. Most internet service providers (ISPs) charge a rental fee for the equipment, which appears as an additional cost on your monthly internet bill.

While an ISP-rented modem is convenient, you can always swap it with a third-party router for up-to-the-minute technology, a higher level of personalization, and money-saving.

If buying your own modem sounds like a good idea, you better know what you're getting into. A third-party modem offers more freedom, but that freedom also entails greater responsibility.

What is a Modem?

A modem is the intermediary between your home network and internet service provider. “Modem” and “router” are often used interchangeably, even though these two are separate entities with different functions.

Both modems and routers are essential to access the internet. The modem converts analog signals to digital signals and vice versa. This allows you to send and receive data on your device/computer over the internet and communicate with other devices/computers all over the globe.

While the modem serves as the gateway between you and your internet provider, the router enables internet usage on multiple devices via Wi-Fi or ethernet.

ISP-Rented Modem vs. Purchased Third-Party Modem

Most ISPs provide a modem and router combo for renting, which costs $10-$15 per month on average. Some ISPs give the option to purchase the modem and router as well, so you have to pay a bigger amount in the beginning (one-time cost).

ISP-Rented Modem: Pros & Cons

PROSCONS
  • Complimentary technical assistance and repairs
  • Faulty or obsolete modem is replaced at no extra cost
  • No need to pay a lump sum amount
  • Free software updates
  • No compatibility issues
  • You may receive a second-hand modem with outdated hardware
  • Tends to be expensive for long-term usage
  • Customization or change of settings can be problematic

Key Takeaways:

  • You cannot request a modem of your choice, so you'll have to make do with whatever your ISP provides as per their policy.
  • If you consider yourself technologically challenged or inexperienced, an ISP-rented modem is the most fitting option. Your ISP will take care of the setup, configuration, and everything else in between.
  • An ISP-rented modem does not belong to you, so you have to return it once you discontinue the service. You cannot sell the modem or use it for a different ISP.
  • Even though a rental fee may seem nominal initially, you end up paying more than the modem's total cost over the course of a year or less (and you still don't own it).

Purchased Third-Party Modem: Pros & Cons

PROSCONS
  • You can get a modem tailored to your needs and budget
  • The modem could be used for different ISPs as long as it's compatible
  • No ongoing payments
  • You can resell it to fund newer technology partially
  • Cheaper in the long run
  • Requires upfront investment
  • If it breaks or malfunctions, your ISP won't take responsibility
  • You have to install, repair, and replace it at your own expense

Key Takeaways:

  • Buying a third-party modem requires you to spend more initially, but it's a one-time cost so you evade the burden of monthly payments.
  • The average modem has a lifespan of 2-5 years and you can easily get a brand-new one for about $100; prices can be lower or higher depending on the quality and overall features. Considering the average rental fees, this route is certainly more cost-effective.
  • When you purchase a third-party modem, you can go for the latest technology or whatever you prefer.
  • If you know your way around a modem, you can manipulate the settings to your liking – go above and beyond!
  • Your ISP will not accommodate any issues related to a third-party modem.
  • When purchasing a third-party modem, make sure that it is compatible with your chosen ISP.

Choosing between an ISP-Rented and Third-Party Modem

There is no one right choice between an ISP-rented and third-party modem. It all comes down to what best suits your lifestyle.

Settle for an ISP-Rented Modem if:

  • You don't stay in one place for long or your job requires you to move often.
  • Your employer pays for your internet service.
  • You share your network with roommates and split the bill.
  • You know nothing about modems and neither have the time (or enthusiasm) to look into the subject.

Purchase a Third-Party Modem if:

  • You don't see yourself leaving your current home in the next five years.
  • You have the budget to invest in a modem of your choice.
  • Setting up and configuring the modem is not a hassle for you.
  • You value personalization and freedom.
  • If the modem fails, you can manage without any kind of assistance from your ISP.

FAQs

Can I use a third-party modem instead of the one my ISP provides?

Yes, you can, as long as it's compatible. You can visit your ISP's official website to learn about compatible modems or seek guidance from customer service.

Will my cable internet modem work for fiber internet?

No, it won't because fiber internet utilizes an Optical Network Terminal (ONT) device instead of a traditional modem.

Is a modem-router combo device better than buying the two separately?

Getting a modem and router separately is the better option because it provides more stable connectivity, stronger signals, and faster speed. On the other hand, purchasing a modem-router combo is cheaper than getting them separately.

Can I connect to the internet without a modem?

You cannot connect to the internet without a modem even if you have a router. The modem alone can provide internet access on one computer, but the router is necessary to accommodate multiple devices through Wi-Fi and Ethernet.

Do modems have an impact on internet speed?

Yes, the quality and type of your modem do affect download and upload speeds. A lower-end modem may not support high-speed internet and is likely to perform poorly. Therefore, get a modem that is compatible with your ISP and chosen internet plan.