Why do domain prices go up after the first year?
The promo pricing model
Most registrars advertise a deep discount for the first year to get you in the door. That price often doesn't cover their costs, so they make it back on renewals. After year one, you pay the standard renewal rate, which can be two to five times higher.
This is standard practice across the industry, not a scam. The registrar is betting you'll stay because moving a domain is a hassle. Some registrars offer lower renewal rates than others, so it pays to check the renewal price before you buy.
Registry and ICANN fees
Every domain extension has a registry that sets wholesale prices. For .com, the registry (Verisign) can raise prices in certain years, and those increases flow to you. ICANN also charges a $0.18 annual fee per domain, which registrars pass along.
Some extensions have seen steep registry hikes. For example, .xyz and .top have raised wholesale prices significantly in recent years. If you own a domain long-term, those increases add up.
How to avoid surprises
Before you buy, look for the renewal price, not just the first-year price. Check the registrar's pricing page or your cart total for year two. If the renewal is high, consider a different registrar or a different extension.
You can also transfer your domain to another registrar after the first year, often to get a lower renewal rate. Just remember that transfers add a year to your registration and may have their own fees.
- Check the renewal price before you buy.
- Look for registrars with flat or low renewal rates.
- Consider transferring after year one to save.
- Watch for registry price hikes on newer extensions.
Common mistakes
- Assuming the first-year price is what you'll always pay.
- Thinking the registrar is scamming you when renewal prices are just their normal rates.
- Forgetting that registry fee increases affect all registrars, not just yours.