Why Are VPNs So Expensive? (Plus Free & Cheap Options)


NB – Some links in this article are affiliate links and we may receive a commission for purchases made through these links at no additional cost to you.

A Virtual Private Network or VPN is a clever piece of software which can route a user’s internet traffic through very secure, strongly encrypted servers for maximum privacy and security. They are a great online privacy tool for people who don’t like the level of surveillance that goes on in today’s world, or are cautious about hacking and online data fraud and want more protection than standard Wi-Fi can provide.

However, subscribing to a Premium VPN plan isn’t always very cheap, with plans ranging anywhere from $4/month to $8/month for private use VPNs. That’s $50-100 a year, recurring if you want to keep using it (not one-off), which can seem quite expensive for many first time purchasers.

But why are VPNs this expensive? Does it really cost that much just to route traffic through a specific server in a specific country? Are the VPN providers ripping us off? What exactly goes into the cost of running a VPN service?

In general, VPNs can be quite expensive mainly due to the costs of running servers in multiple countries, especially energy costs for high usage servers. There are also associated setup and running costs that need to be recouped by VPN providers, especially to continue providing reliable access to streaming services which continue to attempt to block them, which is why they sometimes need to charge expensive subscriptions.

Therefore setting up, and running and truly legit VPN service that is reliable, fast and actually protects user data is not cheap, and these costs have to be passed onto the customer in the form of paid plans.

That said, in spite of this, there are still some good viable free VPN options out there that can work for many users. We’ll give some good options on this as well – you don’t always need to pay to get good VPN servers. It’s also very true that the Premium VPN market is very competitive, with dozens of providers, so cheap options are available there as well, from as little as $2.50/month (we’ll provide some good options here as well).

But let’s first cover some of the factors that go into making Premium VPNs quite costly.

The Costs Of Running VPN Services

Here are some cost factors that contribute towards the subscription plans VPN providers need to charge:

Server Costs – The biggest obvious cost is the running of servers. Some VPN providers have their own data centers, which is very costly to set up and maintain, but does provide a unique selling point of having everything “in house” which is more privacy friendly. Others rent servers off third party data centers – I have a feeling many VPN servers even use the same data centers/servers in many countries, since they always seem to be located in the same city in many countries. Doing this is cheaper than having your own, but still costs a lot. Either way you need to pay for servers to route VPN traffic through in every country you offer server locations in, which costs money.

This general cost itself can be broken down into several more specific factors:

  • General cost of renting server/data centers off third parties if this is their model. And this needs to be done in every single country where you operate servers (in rare cases, geo-located VPN servers are used, which are routed though another country, but this isn’t so common).
  • Even higher cost of creating and running their own proprietary server centers if this is their model. Imagine adding up the costs of all server towers, PCs, cabling, technicians, building rental, etc
  • Energy costs – server centers can use quite a lot of electricity, both to operate server towers and also to cool them down. The cost of running these centers can run into tens of thousands per month, and will only increase as energy prices rise in the current climate.
  • Cost of running separate proprietary DNS servers as well if this is their model.

Of course, VPN servers are nothing like the scale of those used by Amazon or Google, but the major VPN providers still have millions of customers around the world. Therefore, maintaining a server system to accommodate all these users comes at a high cost.

Server Obfuscation – This is why the more top end premium VPNs like ExpressVPN and NordVPN and ProtonVPN‘s Plus Plan – the ones typically relied upon to reliably access streaming services – tend to be quite pricey, up to $8/month for plans. For a VPN provider to provide reliable, long term access to multiple streaming platforms, it’s not a set-and-forget process. There’s a constant cat-and-mouse battle between streaming services and VPN providers, with the streaming companies constantly finding and blocking VPN IP addresses, which means the providers have to issue new ones and keep constantly observing to spot and act quickly whenever one of their IP addresses is discovered and blocked, and create new ones, and so on. It’s a constantly dynamic, changing battle that costs money for the VPN providers to keep up with, which is why the best streaming VPNs tend to cost more money. And then there’s the related problem of finding ways to allow (and maintain access) for users in very restrictive nations like China, for providers that promote this as a selling point (eg. “works reliably in China”). Some providers have to create their own proprietary VPN protocols to fool attempts to detect and block their usage, which costs even more money.

General Operational Costs – And then there’s other basic operational overheads that most businesses have to incur on some level both to get themselves running and to keep themselves viable:

  • All good VPNs have apps for all major devices. These apps need to be created and coded for maximum safety and reliability, which means hiring expensive developers – a big up front cost to launch a VPN service.
  • Cost of employing and 24/7 customer service team (all major VPNs offer 24/7 support)
  • Cost of employing networking technicians to identify and fix any problems that occur.
  • Legal and compliance costs of operating servers in all countries they use. Keeping on top of current laws regarding user data in all countries, plus keeping track of any changes in laws that may require them to withdraw services in certain countries if new laws are brought in that mean they cannot guarantee customer privacy.
  • Marketing and promotional costs, plus commission payments to affiliates (like me!)

If you add all these upfront and ongoing operational costs, you can see why Premium VPN services do need to charge quite a lot of get their money back and make a profit. Setting up and running a truly legit, credible Premium VPN service is not cheap and needs a lot of investment on the front end and ongoing investment to keep it competitive versus other VPNs on the market.

Why Do VPNs Vary In Price?

In general terms, it’s fair to say that most VPNs are pretty much the same, they operate on the same general principle and probably run through the same data centers in may countries, and are about as fast and reliable as each other. It’s just the branding that’s different, as there are hundreds of different providers now.

That said, paid for VPNs do vary in price, from $2-3 a month up to $8 a month for residential users (businesses probably pay more for bespoke VPN packages). So what’s really different? Do the more expensive VPNs actually have anything to offer, or are they just ripping you off?

Here are some general differentiators to look for in VPNs, when comparing what they cost versus what they are offering you:

Streaming Access – The big factor that can lead some VPNs to be more expensive. If you want reliable access to streaming services globally, then it is advised to go with a more expensive big brand name like ExpressVPN (generally considered the best for streaming), ProtonVPN Plus Plan or NordVPN, where you’re paying $6-8/month typically. Cheaper brands can get you access, but it’s best to go for providers that specifically focus on optimizing this.

Server choice – It’s not a perfect correlation, but in general, the more expensive VPNs like ExpressVPN tend to offer better server choice in more countries (80-100) than cheaper ones (35-50 countries). That said, you can get cheaper VPNs that also offer good server choice (PIA stands out here). But not everyone needs servers in loads of countries anyway – all VPNs, regardless of price, offer servers in the major countries you’d expect (USA, EU, UK, Commonwealth, Far East).

Bypassing censorship – Again if you’re in a more tricky spot in terms of wanting to use a VPN in a country that actively tries to block their use, or has very restrictive censorship laws, it’s generally better to go for a more expensive VPN that has it’s own servers and specifically has access in China, Russia etc as a selling point. Cheaper VPNs that are probably using the same data centers as loads of other cheap VPNs are probably less useful for this.

And then here’s some factors that are pretty much the same between different VPNs, regardless of cost, with only minor differences:

  • Unlimited data use (all paid-for VPNs have this)
  • Server speeds and reliability
  • 24/7 support (they all offer this)
  • Zero logs policy (they pretty much all offer this – skip over any provider that doesn’t)
  • Number of connections – some offer 4 or 5 devices, some 10, some unlimited, but doesn’t really correlate with price that much.
  • 30-day money back guarantee with almost all providers if the service is not to your liking.

See our full guide on whether all VPNs are basically the same, for more on these and other differentiating factors between different providers.

Best Free VPN Options

It should be pointed out though that you don’t necessarily have to pay anything to use a VPN – there are plenty of decent, working free VPN services out there, some of them even with unlimited data usage.

Server choice does tend to be restricted on free versions, but if you can make do with the selection they do have, then some users can do just fine using a free VPN.

See the table below for a comparison of some good, reputable, reliable free VPN options (you do need to be selective when picking a free VPN as there’s quite a few rubbish ones out there)

Free VPN Services (some links are affiliate referral links)

ProviderFree Server LocationsData LimitMore Info
ProtonVPN3 (USA, Amsterdam, Japan)UnlimitedSee here
AtlasVPN3 (USA East, USA West, Amsterdam)5 GB/monthSee here
TurboVPN4 (USA, Germany, Singapore, India).UnlimitedSee here
Hide.me5 (Netherlands, USA*2, Germany, Canada)10 GB/monthSee here
PrivadoVPN10 (USA, UK, Canada, Germany, France, Netherlands, Switzerland, Mexico, Brazil, Argentina)10 GB/monthSee here
Windscribe10 (USA, UK, Canada, Hong Kong, France, Germany, Netherlands, Switzerland, Romania, Denmark).10 GB/monthSee here
Tunnelbear49500 MB/monthSee here

 

However, here’s some caveats to bear in mind when using free VPNs:

  • Data usage is often (not always) restricted on free versions – see table above.
  • Server speeds are also often slower than on premium plans.
  • Customer support is either limited/slow or zero on free VPNs
  • Free VPNs will almost NEVER allow access to streaming services. You need Premium plans for that.
  • There are lots of shady, not-100%-legit free VPN/proxy hybrids (eg. Opera VPN, UrbanVPN, DewVPN) that are NOT recommended for really serious stuff. You don’t know where your data is going and can’t be sure it’s secure. Especially avoid free “VPNs” built into browsers if you’re really privacy conscious; use legit VPN apps only. Stick to free versions of reputable, legit VPN brands as we listed in the table above that maintain zero log policies even on free versions.

But if you can get past these limitations then there are still plenty of great free VPN options that will provide for the monthly internet privacy needs of many users without needing to pay anything.

Best Value Premium VPN Options

It’s also true that not all Premium VPNs cost the earth in terms of subscriptions – there are some quite cheap options out there.

Here’s some good value VPN plans that stand out for total actual cost per year to get started with a plan:

  1. AtlasVPN – An excellent newcomer service that offer 12 month plans for $3.29/month ($40/year) and a no nonsense server selection in just the main American/European/Commonwealth countries you’d expect. No paying extra to have servers in loads of countries, most of which you’d never even use. Just a stripped down, basic VPN service with a price to match.
  2. Private Internet Access (PIA) – A great value, long standing VPN service that offers the best of everything – servers in 80+ countries plus great values plans at $3.33/month for 12 months ($40/year), with flash sales often even cheaper.
  3. PrivadoVPN – Use our special deal affiliate link to get a 12 month plan for $2.50/month (just $30/year). Great value and a fully legit, safe, Swiss based VPN service.

Therefore, while you can spend $80-100 a year on a Premium VPN, you don’t always have do. It’s true that the top end, more costly providers like ExpressVPN and NordVPN are probably best to go for specifically for users who want reliable long term access to multiple streaming services worldwide, or lots of server choice, not all users need these features. They just want a no nonsense VPN that encrypts their connection, and will only ever use a couple of server locations. In these cases, a budget option is fine (plus all 3 of the above options currently still do provide pretty reliable access to streaming platforms).

And then here are some of the best value VPNs in terms of pro-rata cost if you buy longer term plans (ie. the total initial outlay may be substantial, but the actual pro-rata cost per month is very low to use them):

  1. AtlasVPN – 3 year plan works out at $2/month ($72 for 3 years use, plus 3 extra months free with current offer). Excellent value no nonsense VPN service, even better value per month than the 1 year plan.
  2. Private Internet Access – 3 year plans works out at $2.03/month ($79 for 3 years, plus 3 extra months free currently on offer).
  3. PrivateVPN – 3 year plan for around $2.00/month (around $70 payment)
  4. Surfshark – 2 year plan for $2.50/month ($60 payment).

Oliver

Online gamer and general home networking enthusiast. I like to create articles to help people solve common home networking problems.

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