Crunch the numbers for best phone deal
A NEW iPhone goes on sale within days and one of the questions facing consumers is whether to buy it outright or pay it off through contracts.
The cost of smartphones has surged to above $2000 for highend Apple models – but phone specialists say outright ownership can deliver better deals in a fast-changing market.
Maik Retzlaff, amaysim’s commercial director mobile, said while contracts offered convenience and no lump sum upfront, his preference was to own outright. “Don’t lock yourself into a contract,” he said. “If you’re a savvy shopper, buying outright will pay off in the long run.”
Mr Retzlaff said flexibility was important because a lot changed during a 24-month contract. “We know that over the last 12 months the average person’s data usage doubled,” he said. Some cheap contracts have small data allowances “which can lead to a sting”.
There were finance options available to pay off phones but people should check interest rates and fees, Mr Retzlaff said. They could also wait and snap up a previous model cheaply.
A report last month by consumer group Choice said it was often better value to buy phones outright because SIMonly plans tended to have more data and phone allowances.
Comparison website Whistleout.com.au’s publisher, Joe Hanlon, said outright ownership was usually a better option “but whether you have $2000 to lay down on a new phone is another question”.
In a contract, the cost of a new phone is usually divided into equal interest-free payments over the two-year agreement. “So when you do the maths, it kind of works out the same,” said Mr Hanlon, adding that Vodafone now spreads it out over three years.
Leasing deals are spruiked by some providers but are no use for those who hand down older phones to children.
“The iPhone holds its value over time – at the end of the two-year contract you still have a lot of value,” Mr Hanlon said.
REVEALED: The iPhone XR was launched last week.