is it cheeper to buy the handset outright

Is it cheaper to buy the handset outright?

When setting up or upgrading a business, we require handsets for ourselves and our employees. Now we have several options: 

  1. Go for the contract and buy several lines under their business name
  2. Buy all handsets in one go.

What will be the best option and what are the benefits on each side? None of these two options is better than the other, it simply depends on your needs and suitability.

Buying a new handset is exciting but you need to decide what phone is right, what budget you have, and where to buy it from. It gets a bit confusing when you have so many options.

It’s not always cheaper to buy a new flagship handset outright. In most cases, the price ends up being the same or even cheaper at times, especially if the contract is interest-free. 

Difference between contracts and buying in one go.

Pay now or pay in instalments – It’s as simple as that. Carriers come up with monthly plans that include premium handsets with a small upfront cost and then monthly payments including data plans. The contract usually lasts for 24 or 36 months Contracts. Making it easier and more affordable to use handsets that will be otherwise out of our budget.

But not everyone is a fan of being bound to a contract. They go for sim-only plans that are cheaper and give limited texts, data and minutes. Or they top up when they require more data or calls. The difference is that they don’t get a handset on monthly payments they pay in one go. 

It’s not necessary to buy handsets from a carrier either. There are many other options, buying from the retail store or looking online at eBay for a cheaper option. Refurbished phones are a good option too. But then you miss out on lots of services and features that can end up costing you more. 

Monthly Contracts – What’s good about it?

They are flexible and affordable 

One of the biggest advantages of a monthly contract is it makes expensive phones affordable which is the reason most people go for these contracts. Normally we might not be able to buy £1,199.00 but if we distribute the same price across 24 or 36 months, it’s easily affordable. 

Monthly plans include features like battery refresh, warranty care and rapid insurance

Monthly plans come with sweet features that can give you the premium feel you deserve. Especially when running a business, features like rapid insurance give you a phone replacement within a day or even within 4 hours. Battery refresh takes care of your battery and replaces it when necessary. 

Register for Business plans and you can claim VAT. 

Business plans give more value for money. Having handsets registered under your business name also exempts you from VAT. So that saves you on tax and interest-free plans allow you to save more.

They come with great bundles

Handsets under business plans come with bundles giving you unlimited data, texts and calls. Plus, you get to enjoy a lot of other features such as roaming packages and special discounts.

Phone contracts are interest-free

Interest-free plans make it less complicated and you’re paying the same amount in monthly instalments that you would pay outright. Depending on what budget you have for handsets, you can pay a higher cost upfront to reduce your monthly payments

Pro Tip: With interest rates rising, your saved-up money in the bank over the months can help you get a good phone on contract as it is interest-free.

Monthly Contracts – What’s not so good?

  • Requires a credit check: Getting a business contract also requires a credit check and will need proof of ID.
  • The plans are for a longer period: which may be a good or bad thing… depending on you. 
  • Cancelling a contract before its time comes with a cancellation fee.

Buying handsets in one go – Is it better?

Buying in one go has a lot of options that may make it cheaper. But customers who want first-hand experience and go to the flagship store to buy handsets will pay a heavy amount in one go. 

It’s quite satisfying to know that we don’t owe money to anyone. It works great if you have a bonus budget and want handsets for everyone. But if you’re running a business that pays you off every month, Paying monthly will be a better option. Plus it takes care of an employee leaving, as you can then transfer the phone contract to the new employee.

The Good Stuff

There are a lot of options and deals

Now here’s the interesting part: When buying a phone outright you have many options:

  1. Buy from the flagship store
  2. Online from websites like eBay, amazon or from the company itself.
  3. Pay in one go and buy handsets from the carrier you’re using. 
  4. Buy refurbished phones

You’re not bound to any contract

As discussed before, once you’ve paid there are no strings attached. So if you often worry about the overwhelming monthly bills, getting a phone on contract may not be the right option. 

You can upgrade your phone anytime you want 

This option is also available when getting phones on contracts. Normally people tend to keep their phones for at least two or three years before upgrading but if you frequently upgrade to the latest phone, you can buy them outright and sell them on eBay in mint condition. However, for those who want handsets for a longer duration, especially for business owners who require stability in this aspect, getting a contract is worth it.

The not-so-good stuff

You will have to buy a separate package for calls, texts and data.

Since monthly plans come with good data deals, once you’ve paid for the month there’s no worry about your calls or internet data. This reliability often comes in handy when travelling or managing important projects. 

You miss all the features that come in handy to protect your phone.

Let’s face it, phones are prone to battery problems, being lost in that beer festival you went to or being stolen when you have an important client to get to the next day. In these times, insurance is the lifesaver. 

Total care warranty might feel like a sting when giving money for it but it saves a lot of time and even money because one way or another we have to get our phone replaced or repaired so why not be prepared for it? 

Paying upright may not be budget friendly

For those who have monthly budgets for their lifestyle and business, buying a phone upright can disturb it all. Especially when going for premium phones. Instead keeping a certain amount left aside monthly for the phone payment can make things affordable and keeps the business running.

Which one should we go for? 

Go for monthly contracts if you have a good credit score and a monthly budget. Monthly contracts are also useful for business owners, SMEs and sole traders however if you don’t like to be bound to a long-term agreement and have enough budget buy in one go and get a suitable plan from your carrier. 

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Hamza Irfan

Hamza Irfan

Writes about tech, mobiles, and networks with passion, curiosity, and humor.

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