Why is Hetzner so cheap?

If you are looking for cheap servers in Europe or the USA, you will likely come across Hetzner. After looking at the price, you might wonder: Why is Hetzner so cheap?

Do they compromise on quality (performance) or are they not a genuine provider? Let’s find out in this post.

Let’s see the top reasons why Hetzner has cheap servers.

Why is Hetzner so cheap (10 Reasons)

We will see the 10 most important reasons for the cheap price of Hetzner.

Reason 1: Hidden Charges

Most of the hosting providers have this issue of hidden charges.

Setup fees: Usually VPS and dedicated servers have hidden charges in the form of setup fees (Hetzner does this too). The good part is that you can see the exact setup fee right below the main pricing.

There are a few servers with 0 setup fees. You can also filter for them in the left panel.

Addons: If you have been researching this topic, you might have come across something called Flexi-pack. Earlier, Hetzner used to charge extra for Flexipack which is an addon pack for the server.

However, this is no longer the case. So there’s no longer a charge for Flexipack.

Reason 2: Old Hardware

Hetzner is known for building their own servers instead of buying them directly from the supplier. This allows them to buy the hardware and components in bulk.

As you might have guessed, they reuse some parts of the hardware and components that some other providers have already stopped using. This allows them to decrease the overall cost.

You can expect low-end servers if you consider hardware as a factor. However, they check for the quality. It still gives decent performance.

Note: They also save some money on redundancy. There are no redundant power supplies in servers and server racks. They do have redundant UPS facilities to ensure reliability, though.

Reason 3: Limited Support Options

Customer support looks like a small thing. However, it costs hosting providers a lot to offer technical support. Hetzner has different teams for different products.

It saves them a lot of money in terms of training.

On the other hand, the support is not fast or good enough. It’s safe to assume that they have fewer people in the support team. As there are fewer members for support, they can save a lot of money here.

Reason 4: They Own the Data Centers

Data centers are a crucial part of any hosting company. Hetzner owns the data centers. They can not only keep the scalable infrastructure design but it also allows them to add any number of servers if needed.

If a company owns the data centers, it can also provide co-location services. As you might have guessed, Hetzner provides such services. They also make decent money from that side.

Reason 5: Location

EU locations are best suited for many hosting companies. People are ready to pay more for the location. On the positive side, the company can save costs as there are more renewable energy sources and network connectivity.

Hetzner has its own data centers in Germany and Finland, and also offers cloud servers in the US (Ashburn and Hillsboro) and Singapore. They have more peering points (partners) for connectivity. This allows them to control the cost.

Reason 6: In-house Staff

It’s not just about the support team and data centers. One of the reasons why Hetzner is so cheap is because of the in-house team.

Whether it’s builders or electricians, they have their own team. Even the system admins, software developers, etc. are from their team and not outsourced.

With this, they can save more money on staffing.

Reason 7: Green Energy

Your website runs 24/7. It needs energy to operate.

Using green energy is Hetzner’s way of saving money. Electricity is expensive and it’s a great way to promote eco-friendly servers.

Reason 8: Cheap Bandwidth in Europe

Most of Hetzner’s servers sit in its European data centers in Germany and Finland. In Europe, bandwidth is cheap, so Hetzner can include a lot of traffic with each server.

The overall operating cost decreases a lot.

Hetzner also keeps transit costs down by exchanging a lot of traffic directly. It publishes its network capacity on its data center page, and most of it isn't paid transit at all:

Traffic sent over a peering link costs Hetzner far less than traffic bought from a carrier, and it helps explain how Hetzner can include 20 TB of traffic with each cloud server in its European locations. For the transit part, these are the carriers Hetzner lists, with their capacity added up across all locations:

Source: Hetzner's data center page, checked October 17, 2026. Totals per carrier are my sums of the individual links Hetzner lists.

Reason 9: Automation

When you order a VPS or dedicated server, many things are done behind the scenes. In some companies, this process is manual especially if you add more add-ons to the existing server configurations.

That’s not the case with Hetzner due to their automation process.

The configuration is automated. It saves them a lot on staffing costs. As there is very little manual work, you can expect your server to be ready in minutes without Hetzner having to spend a lot of time and money on staff.

Reason 10: Discounts

Why is Hetzner so cheap? It’s because of the discounts that are offered. Due to their huge bulk orders in hardware configurations, they save a lot of money.

For this reason, they are able to offer decent discounts to customers.

When a user’s plan ends, Hetzner doesn’t scrap the server. It resells the same server as “ auctioned servers ”.

Anyone can buy such instant servers. These servers are fully formatted and reset.

They work as new servers.

However, these auctioned servers are pre-configured and you have very little to no control over the configuration part. Other than that, auctioned servers are not only cheap but are also available instantly.

These auction servers not only save money for users but even Hetzner can save a lot of money by reselling the same servers.

Is Hetzner still cheap after its price increases?

Hetzner has raised its prices several times, so it’s worth knowing what changed before you compare it with other hosts.

September 2022 (energy costs). Hetzner raised the prices of many products by about 10% for new orders from September 1, 2022, and for existing products from January 1, 2023. The reason was the jump in European energy prices: power for colocation rose from €0.29/kWh to €0.45/kWh in Germany and from €0.12/kWh to €0.22/kWh in Finland. Products that don’t use electricity directly, such as IPs, domains and setup fees, didn’t change.

February and April 2026 (hardware costs). Hetzner first raised the one-time setup fees for dedicated servers, then raised monthly prices from April 1, 2026. This time existing servers were included, with no exception for long-term customers. According to heise, Hetzner blamed much higher operating costs and hardware prices, especially RAM and NVMe SSDs.

June 15, 2026 (cloud servers). A second, larger cloud adjustment applies to new orders and to servers you rescale; existing cloud servers keep their price otherwise. Here are some of the changes Hetzner lists (monthly, excluding VAT):

Source: Hetzner’s price adjustment page, checked October 20, 2026.

So the answer depends on the server line. The shared Intel and Arm servers (CX and CAX) rose about 30 to 40% and are still among the cheapest cloud servers in Europe. In Germany and the USA, the AMD shared (CPX) and dedicated vCPU (CCX) lines more than doubled, so for those it’s worth comparing Hetzner with other providers before you order.

Conclusion

These are the top 10 reasons why Hetzner is so cheap, although its 2026 price increases have made some server lines much less of a bargain. I don’t recommend using it for production projects. Instead, you can use it for your testing and hobby projects.

If you are not technical or don’t have experience in handling web servers, it’s not recommended to use Hetzner.

FAQ (Frequently Asked Questions)

Is there a cheaper alternative to Hetzner?

Yes, there are also other cheaper alternatives to Hetzner. At Hosting Revelations, you can check my lists of cheap VPS and dedicated servers.

Does Hetzner charge hourly?

Yes, for cloud servers. Hetzner Cloud bills by the hour with a monthly price cap, so a server you delete early only costs the hours it ran, and you never pay more than the monthly price. Dedicated servers are billed monthly.