Pay now or pay (more) later
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 phone from one of the major brands (Apple and Samsung), then a plan will be cheaper. These brands are so popular, they don’t tend to shift from the RRP.
- Every other option including less popular brands and older phones are cheaper if you buy a phone outright, then pair it with a bring your own device SIM. This includes companies such as LG, Oppo and Huawei.
- You have to give the phone back when your contract is over.
- However, this will lower the monthly cost.
- If you become attached to the phone, most service providers and retailers will give you the option to buy it 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
- Cheapest The most affordable plan over 24 months, looks like a great deal from Optus that's $500 cheaper than the next best contract. But this is a lease contract, which means at the end, you don't own the phone. However, you do have the option to buy it out or simply move onto another contract, with a new phone.
- Best value Vodafone offers the best deal if you want to own the phone outright.
- See Apple iPhone 8 (64GB) plans
Apple iPhone X plans
- Cheapest The most affordable plans over 24 months includes some options from Optus and Vodafone at around $2400, but they only include less than 10GB of data.
- Best value The Vodafone $45 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 X (64GB) plans
What are the best Samsung plans?
Samsung Galaxy S9 plans
- Cheapest The most affordable plan over 24 months, looks like a great deal from Optus that's $350 cheaper than the next best contract. But this is a lease contract, which means at the end, you don't own the phone. However, you do have the option to buy it out or simply move onto another contract, with a new phone.
- Best value If you don't want to go with one of the big three carriers (Telstra, Optus and Vodafone), Southern phone [LINK] have a good value plan for the S9, with options to try a shorter 12-month plan, or pay month-to-month.
- See Samsung Galaxy S9 (64GB) plans
Samsung Galaxy Note 9 Plans
- Cheapest The most affordable plan over 24 months, looks like a great deal from Optus that's $300 cheaper than the next best contract. But this is a lease contract, which means at the end, you don't own the phone. However, you do have the option to buy it out or simply move onto another contract, with a new phone. This does include a large, 30GB data allowance that should factor into your decision.
- Best value If you don't want to go with a lease, but want a large amount of data, consider the Vodafone $45 Red plan, which will cost around $2600 over the life of the contract.
- See Samsung Galaxy Note 9 (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?