MOBILE MATHS
Why buying your phone on contract is often a false economy
If you’re planning to buy an affordable phone, getting a SIM-free one is almost always the best way to do it. Contracts offering a low monthly fee and no money upfront can make it feel less expensive, but of course the network makes its money back on the associated phone plan. It’s also expensive to cancel or switch before the contract period – typically two to three years – is up.
Here’s a real example: the iPhone SE with free calls, free texts and 2GB of monthly data. That’s free upfront and then £ 21 per month, and the contract is for three years – so your total expenditure will be £756. But you can buy the phone SIM-free for £389 or less and get 3GB of data for £180 over the same period. That’s a saving of nearly £ 200.
The other benefit of buying SIM-free is that you don’t have to commit to a particular network for the long term. For example if you go with GiffGaff, which uses the O2 network, you don’t have a contract: if you decide you don’t like the coverage or the cost you can simply buy a SIM from somebody else and use that instead. You might jump ship to TalkMobile, which uses the Vodafone network, or PlusNet Mobile, which uses EE.
If you don’t want to pay up-front there are other ways to spread the cost. Some retailers use services such as Klarna or PayPal Credit, which enable you to pay in three interest-free instalments, and some credit cards have long interest-free periods on new purchases. Just make sure you’re choosing the right deal – pay-later services also have longer borrowing periods and those ones charge interest – or that you pay off your credit card before the interest-free period ends.
Another way to make your affordable phone even more affordable is to sell your existing phone, or any other phone you have sitting around. Sites such as MusicMagpie will happily buy old phones if they’re still working, and while the sums aren’t huge you’d be surprised what the sites will buy: MusicMagpie offered us the princely sum of £7 for a 2013 HTC One M7. Expect to be offered around £60 for a five-year-old iPhone in good condition and half that for a Samsung Galaxy S of similar vintage.
Watch out for lightning deals too: phone retail is competitive as phone retailers frequently offer phones with short-lived special offers that can cut the cost considerably. If you’d rather let someone else find the special offers for you, we have live phone deal trackers online at T3.com.