For the longest time, homeowners have described signing up for home security programs as a lot like taking out a second mortgage. Homeowners signed long contracts for the peace of mind that a monitored home security system provides. Contract programs are still available to those who want them, but we are now seeing the emergence of no-contract home security as a viable alternative.
The home security landscape began to change a few years ago thanks to the rise of the on-demand economy. This new economy is built on giving consumers the freedom to opt-in or out of services with the tap of a smartphone. It is built on giving consumers access to the products and services they want when they want them, and at a price they can afford.
It is also worth noting that the on-demand economy put consumer interests before their corporate counterparts. It has worked so well over the last 6-7 years that it was only a matter of time before the home security industry adopted the model.
An Explanation of No-Contract Home Security
It’s important that consumers do not confuse no-contract home security with DIY home security. They are two different things. ‘DIY’ only applies to equipment installation and monitoring. By contrast, no-contract home security is actually a service model offered by providers like Vivint. It’s a model in which consumers are not legally bound to a long-term contract that typically runs 3-6 years.
Vivint’s HomeProtect package can be had with or without a contract. Under the no-contract model, consumers pay for professional monitoring on a month-to-month basis. There is no early cancellation fee because there is no legally binding contract involved.
While many no-contract systems are DIY systems by design, not all are. Take Vivint’s HomeProtect package once again. Vivint offers free professional installation regardless of whether customers choose the contract option. You still get high-quality equipment installed by professionals but with the freedom to pay for monitoring services as you see fit.
Core Differences Between the Models
The choice of contract or no-contract is not as casual as you might think. The choice matters because it has implications for long-term budgeting. There are three core differences that make these implications clear:
1. Total Costs
A big advantage of contract-based home security is the lower upfront cost for hardware and installation. Essentially, the contract system works on a subsidized hardware basis. Providers are able to sell hardware at a lower cost because the difference is made up in monthly monitoring fees. Likewise for installation.
No-contract home security usually requires spending a little more upfront. You save in the long term by managing monitoring costs to fit into your budget. How much you actually spend over many years of service might not be all that different between the two models. But figuring it out would require a bit of math before making a decision.
2. Installation
Vivint Home Security might offer free installation with the no-contract version of its HomeProtect package, but not all of their competitors do likewise. That is why choosing a no-contract option often means DIY installation. If you are able to handle installation on your own, great. But if not, a no-contract package could end up being more trouble than it’s worth.
3. Service Lock-In
Last but not least is service lock-in. In exchange for the convenience and lower upfront cost of contract-based service, you are agreeing to lock yourself into that service provider for the entire length of the contract. If circumstances dictate that you terminate early, you will probably pay a substantial early cancellation fee.
Because no-contract home security is month-to-month, you are only locked in for thirty days at a time. You can cancel because you can no longer afford service. You can cancel because you want to move to another provider. You can even cancel simply because you do not want to pay for monitoring services anymore.
Advantages of the No-Contract Model
Assuming you were to compare both contract and no-contract options across a predetermined amount of time, the total costs would probably be in the same neighborhood. So once you take total cost out of the equation, what are the advantages of the no-contract model? We have already talked about no service lock-in; here are three more to consider:
- Financial Transparency – No-contract home security offers complete financial transparency. You pay a monthly fee with no hidden costs or service fees buried in contract language. You also aren’t paying interest on equipment purchases.
- Portability – Although not guaranteed, most no-contract systems offer portability. You can pick up your system and take it with you when you move. This is ideal for renters and homeowners alike.
- Seasonal Monitoring – No-contract home security is perfect for people who want seasonal monitoring. Think of snowbirds and other homeowners who frequently travel for long periods of time.
Not being locked into a contract offers a level of freedom you just do not get with traditional contract-based home security. But there are disadvantages. There are valid reasons to choose a contract.
Reasons for Going With a Contract
Some homeowners prefer contract-based security. For starters, they like the brand authority that comes with a system backed up by professional monitoring services from a company like Vivint. Some also appreciate the lower upfront costs. Contract-based security allows them to invest in a system they would otherwise not be able to afford, paying for it through monthly service fees.
When confronted with the choice of professional installation versus DIY, certain homeowners prefer the former. Sometimes, the only way to get professional installation is to choose the contract-based model. Homeowners are willing to pay for a few years of service in exchange for knowing their systems are installed correctly.
In the end, the choice between contract and no-contract home security is more than just a financial one. There are multiple things to consider, things that impact the overall usefulness and affordability of a system. Fortunately, there are options for everyone.
