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Is it cheaper to buy a smartphone outright?

We look at the pros and cons of buying a high-end iPhone or Samsung outright, and on a plan.

woman comparing phones plans lead
Last updated: 22 December 2020

Buying a smartphone outright is often cheaper in the long run, compared to locking yourself into a two-year contract. But you may find that new, popular models from Apple and Samsung end up costing less on a plan.

  • Buying outright means you pay the full retail price to 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 or even 36 months. The downside of this is that you're stuck with that carrier, and their terms. Also, even if you aren't locked into a contract, you still need to pay off the rest of the price of the phone if you want out of the plan before all the handset instalments are paid.

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 depends on brand popularity:

  • If you want the latest premium phone from one of the major brands (Apple and Samsung), then a plan will normally be cheaper or at least no worse than buying outright and adding a SIM-only plan. These brands are so popular, they don't tend to shift from the RRP for the first year of availability.
  • Mid-priced and previous generation smartphones from Apple and Samsung may be cheaper if you buy the phone outright, then pair it with a bring your own (BYO) SIM. This process also works well with companies such as LG, Oppo, Huawei and Motorola.

What are the best Apple plans

Apple iPhone 11 plans (Previous generation mobile)

Cheapest and best value

Although the Apple iPhone 11 is a premium mobile, it has now been replaced by the iPhone 12 range which means better deals on what is still a very good smartphone.

The cheapest iPhone 11 plan over 24 months and also very good value is a Vodafone mid-range ($40 lite) plan that will cost you about $1500 over 24 months. The plan includes unlimited voice and text as well as a promotion where you get 50GB of internet data. One thing to note is that the iPhone 11 is 4G only, which means you won't get 5G performance regardless of the network carrier you select. The good news is that you can select virtually any network carrier as you'll get 4G across the network.

See Apple iPhone 11 (64GB) plans

Apple iPhone 12 Pro Max (256GB) plans (Latest premium mobile)

Cheapest overall

The most affordable plans over 24 months for Apple's top of the line smartphone includes a Vodafone plan at around $2200 over 24 months. The plan includes unlimited voice and text as well as a promotion where you get 50GB of internet data. However, the iPhone 12 Pro is a 5G mobile, and until Vodafone improves its 5G coverage, there may be fewer areas for you to take advantage of the higher speeds.

Best 5G plan

The Telstra $65 Small mobile plan costs more than $3500 over the 24-month period, which is significantly more than the other plans going around on the other networks. 

Telstra is most likely to deliver the most areas with 5G access, so if you really need the extra speed, this is the one to consider until the other networks catch up. Or you can buy the iPhone 12 Pro (256GB) outright for about $1900 and get a SIM-only plan. Telstra's cheapest plan ($55) doesn't include 5G support. The cheapest plan with 5G is about $65. 

See Apple iPhone 12 Pro (256GB) plans

What are the best Samsung plans?

Samsung Galaxy A51 (128GB) plans


The most affordable plan for the mid-priced Samsung Galaxy A51 looks like a great deal from Woolworths Mobile. This plan has a reasonable data allowance of 18GB. The cost is just over $1000 over 24 months but the plan on offer is over 36 months with handset repayments of $17 per month. You aren't locked into a contract but if you want to leave after 24 months rather than 36 months, you'll have to pay out $204 ($17 x 12) to own the handset outright. An interesting bonus is a 10% discount on your grocery shop at Woolies once a month.

See Samsung Galaxy A51 (128GB) plans

Samsung Galaxy Note S20 Ultra (256GB) Plans (Latest premium mobile)

Cheapest (not recommended if you want 5G)

The most affordable plan over 24 months is from Woolworths Mobile. But they claim to only use part of the Telstra 4G and 3G network which seems pretty useless if you want to take advantage of all the 5G potential this premium smartphone has to offer.

Best 5G value

While there are some cheap plans from Vodafone and Optus, the Telstra mid-priced plan at $65 on top of the handset repayments of $84 offers a lot. You get 80GB data and no charge for going over that limit, although the data speed will be reduced till the next month. There are other plans available, but be sure to look at the fine print for any limits on data or whether the 5G network is supported.

See Samsung Galaxy Note 20 Ultra (256GB) 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.

See SIM-only plans with unlimited talk and text and 10GB of data

Should I lease a phone?

When you lease, you can simply give the phone back when your contract is over and continue with a new model and you may also be able to claim the cost in your tax.

If you become attached to the phone and want to keep it, 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.

How can I save money on a new phone?

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

  • Telcos can offer surprisingly good deals, if you're prepared to lock in for 24 months.
  • This can actually result 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 end up paying a lot, sales can increase the overall value of a plan package.

Over to you

We invite you to help others who are weighing up their options. Select the CHOICE Community button below to share your experiences:

  • 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?

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 'Search Providers' button above will take you to their site. While we make money if you buy through WhistleOut, this doesn't influence our rankings. 100% of the money we make goes straight back into our nonprofit mission.

We care about accuracy. See something that's not quite right in this article? Let us know or read more about fact-checking at CHOICE.

Stock images: Getty, unless otherwise stated.