Why Do VPNs Cost Money (Explained)

You probably heard before that “there’s no free lunch.” Many online services and platforms are touted as being “free.” That, of course, couldn’t be further from the truth as companies have to keep the lights on somehow, and their CEO’s Lamborghini isn’t exactly cheap to run. 

So, why should VPNs be any different? The truth is, they aren’t. While there’s plenty of “free” VPNs out there, ALL the good ones cost money. It might not be much money, but it is a considerable amount in the long run. So, why do VPNs cost money?

VPN providers, just like other companies, have many expenses and have to maintain a vast network of servers around the world. Servers are indeed their main expense as they’re very costly to maintain, and many VPN providers have thousands of them. There are also considerable marketing costs associated with VPNs. 

Why do VPNs cost so much?

There are basically two main expenses for VPN companies. Those are servers and their maintenance and marketing costs. Both can climb up very quickly as the company is growing in terms of customers and numbers of servers worldwide. 

Servers

data center

Servers are the most expensive elements of being a VPN provider, and it costs VPNs “an arm and a leg” to maintain them. So, how much exactly are an arm and a leg these days? 

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You have to keep in mind that servers aren’t only hardware that you keep somewhere; it’s also software. But, more importantly, they run on electricity. And a lot of it. 

ZDNet did a calculation for a single server using an average of 850 watts per hour. That comes out to 7,446 kWh per year. If we multiply it by 10.59 cents, the average cost for commercial use in 2020 in the US, we get $788,53 per year. For a single server.

VPN companies have thousands of servers worldwide, and the costs aren’t going to be the same for all of them as some countries or states are cheaper than others. Some will cost much higher than the figure we presented above, while many others will cost much, much less. 

Still, maintaining servers is a costly business and the main reason why VPNs cost money and are expensive in many peoples’ eyes. 

Marketing costs 

vpn marketing

Marketing is also a considerable expense for VPN companies and the one that can make or break them. On one side, you need to get as many customers as possible to use your service, and on the other, the cost for ads, influencers, and affiliate marketing can very quickly add up. 

It’s a balancing act of finding a reasonable ROI so that the company can continue to grow while being able to maintain servers and other costs.  

Other costs

There are, of course, many other expenses from taxes to payroll. It also depends if you’re starting a VPN service from the ground up or using one of the existing VPNs that you can re-brand.

Is it worth paying for a VPN?

It is definitely worth paying for a VPN as privacy, security, and peace of mind are priceless. There are many VPNs out there that are free, but they don’t offer the same level of service by a long shot.

Although VPNs can seem like a bit of a luxury in some countries with lower standards, privacy IS luxury these days. 

With every company, organization, and government institution tracking all our moves and trying to sell us something or even worse, trying to control us, VPN shouldn’t seem like a luxury, but a necessity.

Once you look at it that way, you’ll find that a couple of bucks each month isn’t all that much. 

Are cheap VPNs worth it?

NordVPN’s prices. Can you put a price tag on privacy?

There’s definitely a difference between cheap and free VPNs. In fact, some of the best VPNs available don’t cost (too) much money and can be an inexpensive way to protect your privacy and add a layer of security to your internet connection. 

Major VPN providers have millions and some even tens of millions of customers. That’s why they can afford to have lower prices than smaller VPNs although they have much more servers to maintain (thousands, instead of low hundreds).   

Are free VPNs worth it?

Most free VPNs aren’t worth it and can actually be outright dangerous to use as they’re selling your data to third-party companies to make some money. 

There have been numerous news reports of free VPNs that sold their customers’ data to third parties. They are often doing precisely the opposite of what a VPN is deemed to do. 

You will have to make sure that your data and personal information aren’t being used against you. The best thing to do is to do your research before you install a free VPN from the internet, Google Play, or App Store.

Can VPNs be free? (Does it cost money to have a VPN?)

There’s just about a handful of good free VPNs out there. The thing is, they all come with some restrictions. Often it’s a combination of data limits, ads, only a few servers to choose from, and similar constraints.  

However, they do protect your data, offer privacy protection, let you browse content outside of your region that is otherwise restricted, and are free. Sometimes, people need just that and don’t need any additional features. Therefore, it doesn’t have to cost money to have a VPN. It all depends on what you’re looking to get out of one. 

You also need to be aware that good VPNs, that are also free, aren’t good for one thing in particular, and that’s streaming video. You see, they have data, and often, bandwidth restrictions and are in general not even supporting video streaming or P2P file transfers (torrenting). So, if that’s one of your requirements, you better open your wallet. 

RELATED: 7 Best Free VPN Services

Why do VPN’s vary so much in price? 

A VPN provider (or any company for that matter) has to decide at what price point they can sell their products and services in order to be able to pay for all of their expenses and overhead and still make some money. 

It’s up to the company to find out what their target customers are willing to pay for their service. Some VPN companies will lure customers in with a lower price as a part of their overall strategy while others think that their superior features and benefits will make customers shell out more money out of their pockets. 

As we already mentioned, more servers mean more expense. That’s why, to be successful in the long run, you either have to have a lot of customers, or prices that will make server maintenance manageable.  

Some companies are also trying to capitalize on their brand recognition and existing customers on other platforms. An example of that is Mozilla and their VPN service that is considerably higher than the Mullvad VPN it’s based on. 

How to keep your VPN costs low?

The easiest way to keep your VPN costs low is to sign up for a multi-year contract. This will drive the monthly cost to only a couple of dollars a month. 

You can also use a coupon that can sometimes drive the price even further down. For instance, specialized websites such as AppSumo have incredible deals all year round and some of the top VPNs such as NordVPN make an appearance regularly. Sign up for their newsletter and get notified of the newest VPN deals. 

And lastly, wait for Black Friday and find an unmissable deal. That’s when I buy most of my software, apps, or hardware. Get an annual contract and renew it every Black Friday for the lowest prices. 

Why should I pay for a VPN?

Not all VPNs cost money. There are hundreds on the market that are free. But the vast majority is considering you to be the product and are selling your data to other companies in order to make up for the free VPN service that they’re providing. 

On the other side are many major VPNs that offer great service and even have a moral authority. They do charge for their service but offer a far superior product to the general public. And that’s why you should pay for a VPN.

READ NEXT: Will a VPN Protect You When Torrenting (Explained)

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