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Is it cheaper to buy a smartphone outright?

Should I buy my new iPhone or Samsung smartphone outright or as an add-on cost to a two-year phone plan?

woman comparing phones plans lead
Last updated: 10 March 2019

Buying a smartphone outright is almost always cheaper in the long run, compared to locking yourself into a two year contract. But there are some instances where it’s not that black and white, and you may find that new, popular models from Apple and Samsung, wind up costing less on a plan.

  • Buying outright means you pay in full, own the phone and are free to select your preferred carrier. While flexible, selecting a carrier takes extra research, but can save you money in the long run. 
  • Buying on a plan makes it easy to put that new phone in your pocket with no money down, because it spreads the phone's cost over 24 months. The downside of this is that you're stuck with that carrier, and terms, for the life of the contract.

In this article, we compare the cost of the big two brands - Apple and Samsung.

Is it cheaper to buy outright or on a plan?

The amount you spend also depends on brand popularity:

  • If you want the latest premium phone from one of the major brands (Apple and Samsung), then a plan will be normally be cheaper. These brands are so popular, they don't tend to shift from the RRP.
  • Other options including less popular brands and older phones from Apple and Samsung are cheaper if you buy a phone outright, then pair it with a bring your own (BYO) SIM. This process works well with companies such as LG, Oppo and Huawei.
  • When you lease, you can simply give the phone back when your contract is over and continue with a new model.
  • If you become attached to the phone, most service providers and retailers will give you the option to buy the mobile when your contract is over.
  • All you need to do is pay the difference between a lease contract, and an own contract.

What are the best Apple two-year plans

Apple iPhone 8 plans (Previous generation mobile)

  • Cheapest The most affordable plan over 24 months, looks like a great deal from numobile that's $500 cheaper than the next best contract. But this is a lease of a pre-owned iPhone 8 so you don't own it at the end of the contract so be wary of the small print when seeing a great deal.
  • Best value Vodafone and Optus offer good deals under $1,500 for 24 months of use with a good data plan and you own the phone outright at the end of the contract.
  • See Apple iPhone 8 (64GB) plans

Apple iPhone 11 Pro plans (Latest premium mobile)

  • Cheapest The most affordable plans over 24 months includes an Optus plan at around $2270 over 24 months but they only include 10GB of data.
  • Best value The Vodafone $50 Red plan costs more over the 24 month period, due to the extra monthly cost of the handset. However, you get a much better data allowance.
  • See Apple iPhone 11 Pro (256GB) plans

What are the best Samsung plans?

Samsung Galaxy S10 (128GB) plans (Previous generation mobile)

  • Cheapest The most affordable plan over 24 months, looks like a great deal from Woolworths Mobile that's over $300 cheaper than the next best contract. But they claim to only use part of the Telstra 4G and 3G network. This does include a large, 20GB data allowance that should factor into your decision.
  • Best value Telstra have a good value plan for the S10 on their $50 per month plan if you choose the lilac model. However it seems that this model is finally becoming end of life.
  • See Samsung Galaxy S10 (128GB) plans

Samsung Galaxy S20 (128GB) Plans (Latest premium mobile)

  • Cheapest The most affordable plan over 24 months, looks like a great deal from Woolworths Mobile that's over $300 cheaper than the next best contract. But they claim to only use part of the Telstra 4G and 3G network. This does include a large, 20GB data allowance that should factor into your decision.
  • Best value If you plan on using 60GB of data per month then there are a couple of very good Vodafone plans available but if you only use up to 15GB you can go with a full Telstra network plan for around the same cost ($2099 over 24 months) which will cost around $2600 over the life of the contract.
  • See Samsung Galaxy S20 (128GB) plans

What are the best BYOD (SIM-only) plans?

If you already own a phone you'd like to keep, or you're eyeballing one that isn't available on a plan, you can shop around for a SIM-only plan (often called bring your own device or BYOD). These can drive the price down over 12 to 24 months.

  • Sim-only plans typically offer the same data, talk and text as phone contracts for far less.
  • They generally come in two flavours; monthly "no lock-in" payments, and 12 month contracts. The latter is typically the cheapest option.
  • You're free to compare prices, data limits and so on across different carriers.
  • Carriers regularly have sim sales online. These deals often stay intact for as long as you stay with the provider, even after the contract has ended.
  • If you find a plan you like, you can use it with other unlocked phones in the future.

We've sorted SIM-only plans to show the total cost for a 24 month period, with the cheapest plan shown first. The best plan is available for under $500.

Why we've partnered with WhistleOut

We've partnered with search engine WhistleOut to help you find and buy the right plan for you. The links above send you to a selection of SIM-only or contract phone plans for you to consider. While we make money if you buy through WhistleOut, this doesn't influence our rankings and 100% of the money we make goes straight back into our nonprofit mission.

How can I save money on a new phone?

If you want to purchase on a plan, sales are you friend:

  • Telcos can offer surprisingly good deals, if you're prepared to lock in for 24 months.
  • This can actually results in a cheaper outcome over two years, compared to an outright purchase with a BYOD plan. So keep an eye out.
  • They can also entice you with bonus features such as extra data, unmetered Netflix, damage insurance and so on.
  • You can even get discounts for bundling other services such as internet or home phone.
  • Shop around and compare sales across different service providers.

So while you'll still wind up paying a lot, sales can increase the overall value of a plan package.

Over to you

We invite you to share you experiences in the comments to help others who are weighing up their options.

  • What have you chosen?
  • Have you found a good deal?
  • How did you make the choice?
  • What are you looking for with your next phone or plan?

Our smartphone reviews test models from Apple, Samsung, Google and more, to find out which ones have the best sound quality, displays and cameras.

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