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Buying a Phone Outright

Buying a phone outright vs a contract package, which is best?
Like many of you, I find it hard to choose the right phone especially at the right price as there are always newer and better models available! If you are looking to purchase any phone, I think this post will be useful to you!
For those of you who aren’t familiar with both methods of purchasing your phone, I will give a little bit of detail here. Buying the phone outright is like the old days before instalments were available, you either had to save up enough to buy it or you had to go without it. Once you obtain enough money, the phone is yours, no questions asked. A contract package is more complex, it is essentially paying for your phone in instalments (normally over 24 months!) A contract involves two bills; one for the device and one for the ‘contract’. The device costs are for having the phone in the first place and the second is for the data, texts, and calls that you choose to have. Now for the part, most of you savvy savers are waiting for! You’ve read the previous paragraph and currently have some idea of the difference between the two, and now you’re wondering so which is cheaper? To help you understand, I’m going to exemplify the differences between the two methods for two models!Therefore, you’re looking to purchase a brand spanking new iPhone X with 64 GB capacity. You’ll be sure to see tariff options which would include an upfront cost and then a monthly payment. Say you walk into a well-known provider and they offer the following for a 2gb data plan and the iPhone X 64gb:
£69.99 upfront and £62.00 monthly payment for a 24-month period
If you crunched the numbers ((69.99) +(62 x 24)) you would end up with a total of £1558. This doesn’t sound bad for 2gb of data a month and then being able to call your iPhone X yours at the end of the contract, right? Well, it depends on whether you like being overcharged approximately £400.

If you had bought the iPhone X 64gb outright, it would have cost £1000. You could then purchase a sim only plan with 2gb of data which would be available at roughly £7.50 per month.
The breakdown looking something like this:

Apple iPhone X 64gb £1000.00
2gb data plan with unlimited calls and texts £7.50 (monthly)

If you crunch the numbers for the same 24-month period ((1000) + (24 x 7.50)) you would get £1180 for an identical product and plan. I’m sure some would argue this is because it is a modern phone and that the mobile phone company must make a profit somehow. Therefore, I present a less modern model for sake of argument!

Take the OnePlus 3T 128gb which was released in 2016 and is three models behind the latest model available to the public. According to a reputable mobile phone provider, you can get 4gb of data a month as well as the phone for the ‘reasonable’ price of £41 a month. This contract would be for 24 months and so you would shell out a total of £984 in total. Compared to purchasing the device outright and then paying £10 monthly for 24 months, you would have paid £648 for the same deal. This would have saved you £336!

In conclusion, buying a phone outright and then a sim only offer works out cheaper than a contract package. The savings can constantly be used to buy a new phone and don’t forget you can always sell your most recent device to reduce your long-term costs in terms of upgrading when you want!