Smartphones; they have become an essential part of our daily lives so much so that in recent surveys more 18-34 year olds would rather give up their car, sex and coffee or even lose their wallet than give up or lose their smartphone. With new and improved smartphones being released on a regular basis having the ‘latest’ model is quite important to many people.
Smartphones are not cheap however, so when mobile operators advertise FREE phones with new contracts, customers generally jump straight in. I think deep down we all know that the smartphone that is advertised for free is not actually free, but how much is your free contract phone actually costing?
Let’s break it down to have a deeper look into your free contract phone:
Imagine your contract is £45 per month for 24 months so the phone is free
You are committing to pay the operator a minimum of £1080
An iPhone 5S 16GB costs £450
£960 – £450 = £510 profit for the operator. Of course they have costs and overheads to pay, but the chances are that you are paying £200-300 extra for your iPhone 5S. What is worse is that you will likely end up on a tariff that has far more minutes than you use and even much more data than you consume on a monthly basis. In fact over 50% of people on contracts are in this situation.
So what other options do you have?
Well you could buy the phone upfront (if you have £450)
Then add a £20 a month contract over 24 months costing £480
Total cost is £930
Savings made = £150
Of course there are always variations in between where you can pay a certain amount upfront for the phone for a lower monthly contract. Whichever way you take a contract out, if you want the latest phone the operator will be the winner. Just take some time to look at all the options and work out what you need. You could also come and talk to us, as we will happily work out what the best deal for you is.