You’re thinking of getting a home alarm system. You’ve looked at various companies and compared the systems and the different kind of monitoring. You’re close to making your decision, but one question needs to be answered: is it better to own or lease your home alarm system?
Some home alarm companies will sell you an alarm system while others lease you a system. Both have their advantages, however, you need to truly see the big picture to make a wise decision.
Companies like AlarmForce will lease a home alarm system to you once you sign up for their service. This zero down leasing concept is nice upfront as it doesn’t require the homeowner to put any money down. They do require you though to sign a multi-year contract. With the lease, the company will cover some service, depending on what it is. Sometimes, however, you will still have to pay for the service call. The negatives to leasing are the already mentioned contract (which is a big negative as you’re stuck with the company even if you’re unhappy with their service) and the fact that once the contract is over, you are left with nothing if you were to go to another company. With a lease, you’re paying for something someone else owns, so at the end of the day, you will be left with no ownership and no system.
Some home alarm companies like Simplisafe or Ackerman will sell you a home alarm system. The positives are that you have actual ownership of your alarm system and that you can switch to other monitoring companies if you aren’t happy with your service (if you haven’t signed an alarm contract). A homeowner needs to understand that not all alarm systems are created equal. Some systems can cost $199 while others can go into the thousands of dollars. Beyond that different systems have different features and monitoring capabilities. Ownership provides the customer with options and an asset – pending they don’t spend too much money for their system upfront.
At Think Protection we believe that the customer gets the best value by owning their alarm system. A lease may seem like a good idea upfront, however, over the course of your contract you’ll end up spending thousands of dollars and will be left with nothing at the end. A high value, low-cost alarm system will require you to spend some money upfront, however, in most cases, you’ll be able to pay less for monitoring and will have the asset of ownership. You can also avoid signing a long-term contract and if you’re unhappy with your service you can go elsewhere.
Never lease when you can buy a feature-rich home alarm system at a low cost.
You’re thinking about getting a home alarm system. You’ve looked at a few options and are wondering to yourself what kind should you get: one that comes with professional monitoring or a self-monitored system, where only you and a select contact list are notified if an alarm is triggered. How can you make a smart decision?
There is no shortage of options for a self-monitored alarm system and a monitored alarm system. Companies like ADT, AlarmForce, Simplisafe, CPI, and Ackerman offer a traditional monitored home alarm system, while companies like Canary and Dropcam have a self-monitored solution. What’s the difference between self-monitored and professionally monitored alarms?
When a professionally monitored home security system is tripped a signal is sent to the monitoring station who can then assess the situation and then contact the police if necessary. A self-monitored system only notifies the homeowner through a text, email or automated phone call.
If the homeowner is busy or doesn’t have their phone on them, then they can’t deal with whatever situation is occurring. Plus, if they are far from their home, they may know that the alarm was tripped but can’t get any information beyond that. Self-monitored systems rely solely on the homeowner to resolve the situation, which may not always be possible.
A professionally monitored system has the monitoring station involved in the assessing process and the dispatching of whatever first responder is needed. This provides unmatched peace of mind and a response regardless of the homeowner’s activities or location.
While a self-monitored system is better than nothing, it doesn’t come close to the value that a professionally monitored home alarm provides. The peace of mind and level of security is unparalleled, giving the homeowner a better response and ultimately better security.
Remember though that not all alarm systems are created equal, so do your research on what type of alarm monitoring they provide, if their central station is a 5-diamond certified central station if they have an alarm contract and also the monthly price should factor into your decision. Think Protection and make an informed choice.
Ackerman Security, a very successful home security company that operates throughout the greater Atlanta and Washington regions, was acquired by Canadian Private Equity firm Imperial Capital. Ackerman Security specializes in taking over the monitoring of existing home alarm systems by offering a $20/month service. They have been very successful with this model and continue to grow at a solid pace.
Ackerman Security employs an outbound sales team, that comes to your home to assess your security needs. They also have a five diamond central station, which monitors all of their accounts.
Ackerman requires a 1-year contract for service.
This is Imperial Capitals first venture into the home security space, however, they say they will continue to monitor the industry and potentially be involved in other opportunities.
You can read all about the Ackerman Security purchase here in an article in Security Systems News: http://bit.ly/1CeNMHM
Virtually all alarm companies make you sign a contract when you agree to their services. Usually security contracts are for 36 months (ADT, AlarmForce, Reliance Protectron, Monitronics, Safetouch, Bay Alarm, Vivint, Rogers Smarthome Monitoring, CPI, Frontpoint and Protect America are all 36 month contracts). Ackerman will make you sign a one-year contract. Why is it these companies make you sign a contract and what value is it to you to sign it?
The reason why you have to sign an alarm contract to get home security monitoring from the companies above is so they can lock you in to being a customer and make you commit to continuing service for those 36 months. This allows them to more than cover the cost of any equipment you’re leasing and also they can make a good profit off you as a customer.
Alarm companies may have zero money down offers, but over the course of the contract you are will be paying significant amounts of money far beyond that of the upfront costs. Beyond that, by locking yourself into a contract, you are forced to stay with the alarm company, even if the service is bad.
So, what value does the customer get from signing a contract?
Truthfully, it all depends how you look at it. The alarm company will market the value as no money upfront and continued service, but the fact is that with most companies the cost of the monthly will be outrageous and the company will profit tremendously from you over the course of your contract. For example, monthly two-way voice monitoring with ADT is $39.99/month, and you have to sign a 36-month contract, so that guarantees that ADT will receive $1439.64 from you over the course of your contract. Vivint charges $49.99 for their basic monitoring package with a 36-month contract, so that works out to $1800 over the contract.
Large amounts of dollars guaranteed to the company, regardless of the quality of service.
Marketing-wise, the companies will claim the contract promises you no charge service, however there are certain things not included in the contract which will be required for servicing, which will result in money coming out of your pocket to pay for it.
Think protection is free? Not quite.
When a company starts to offer a premium alarm service without a contract, then the industry will change forever. Contracts aren’t necessary for the customers. In fact the customer benefits from not having a contract for their home alarm. The thought in the industry is that if a customer doesn’t sign a contract, then they’ll leave their monitoring service far before the 36 months, once a better offer comes around. Personally, if the alarm company is providing a superior home security service, at a low price, then the customer will stay with the company without a home alarm contract.
In fact, the lack of a home alarm contract could very well be the main reason the customer stays with the home security company.
ADT, Vivint, Frontpoint, Protect America, AlarmForce and the rest could never switch to a no contract model, since they have so many current customers already under contract, the rebound effect would be tremendous. Beyond that, if they did offer a secondary no contract offer, the monthly monitoring and upfront costs would have to be significantly higher, due to them eliminating some of the risk which would arise by not having a contract to tie down their customers.
Prospective customers should weigh all of their options when shopping for a home security system, and ask themselves if a 36-month contract is in their best interest. If it is, then sign the bottom line, but if they think protection can be found at a more reasonable price without a contract, then look elsewhere.
Alarm companies charge varying upfront rates and monthly charges for their services. These can range anywhere from $99 upfront to hundreds of dollars and then monthly rates can range from $20/month to over $60/month. When looking at these amounts, we have to ask ourselves, why do alarm companies charge such high prices for their equipment and services?
The answer is simple – because they can.
The home security market is elastic. An alarm company will typically charge as much as they can, while remaining to acquire new customers. If the customer will pay the amount, then the company will charge it. Once the business volume is established, the company becomes locked into those prices.
AlarmForce charges $25/month for two-way voice security, CPI is around $30/month, ADT’s prices range from $29.99/month to $40/month for two-way voice protection and Vivint’s packages can from $49.99/month to as high as $70/month.
ADT and Protectron have dealers, so the pricing on their monthly monitoring ranges. AlarmForce, Frontpoint, Protect America, CPI, Ackerman, Bay Alarm and Vivint do not, so it’s more of a fixed price depending on features and equipment.
Prices range based on amount of equipment, type of monitoring, if home automation features are included, and the company’s feeling on what the market will pay for service. Supply and demand is a constant amongst the industry – however, different companies have differing views on what truly equals the best value for their customers.
Beyond that, alarm companies understand that it’s always easier to raise prices than lower them. When prices are raised, the company benefits but the customer loses out. Typically, most home alarm companies have it written into their contracts that they reserve the right to raise the monthly monitoring rates at anytime. And they do.
It’s hard for an alarm company to lower their monthly monitoring prices due to the negative effect it would have on the bottom line. If you already have 5,000 customers and you lowered your monthly monitoring prices by a $1 for new customers, then old customers would want the discount as well, or they’d cancel their contracts. Once the discount is given, then suddenly the alarm company is now down $5000 per month. The rebound effect is huge, which is why it’s almost never done.
So in summary, the main reason why home security companies charge the high amounts they do per month is because the market allows it. If prospective home alarm shoppers stopped going with these high priced home alarm solutions, like ADT and Vivint, then they’d be forced to charge less. Plus if another alarm company came into the market offering a lower cost solution for protection, customers would think of going elsewhere.
The alarm market dictates how much the companies can charge.