How to get the best deal when getting a new Phone

I got a new phone (finally). A HTC Desire which is pretty cool. I was tempted to get an Iphone 4 – but then every man and his dog already has an iphone!

Summary of the deal:

I went with Vodaphone (so I can call my girlfriend on Vodaphone for free) with  a  $59/month plan (Vodaphone had a special on the $69/month plan).

Extras I will pay $5/month for the handset and $10/month for insurance.

Questions to ask yourself when getting a new phone

  1. Is it really worth getting a new phone?

I held off getting a new phone for a long time because it wasn’t worth paying $75 a month with a new phone vs. $30 a month with an old phone.

With my old phone I was on an Optus plan with my parents (2 mobiles) and could pick another 3 numbers (landlines or Optus mobiles) which I could call for free. But now that I like to talk to my girlfriend (who also likes to talk) – it didn’t seem to make sense to have calls to home/parents for free (which last 2 minutes or less) and pay per minute to talk to the girlfriend (which can last 30mins+!).

So yes – worth it to get a new phone!

2.       Can you afford it now and in the future?

If you are going to end up paying more each month (which I think there is a good chance) think about whether you can afford it. While $20/ month extra doesn’t seem like much – these things do add up.

I have had a few friends who want to cancel their mobile plan but can’t. For example they have lost their job or work less hours, or are thinking of moving overseas.

Also – even if it costs the same – it might cost you to cancel your existing plan (see below)

Currently my mobile bills range from $45-$60 a month. To get a new phone and pay a bit more each month seems pretty worthwhile.

3.       Does it cost to cancel the old phone?

I have to pay a cancellation fee to Optus to cancel the agreement (about $120 -which I think is pretty unfair). I had assumed that because I was past the 2 year initial plan that I could just cancel at anytime. But no – my dad signed on for another year agreement back in March and 9 months later I still have to pay to break the 1 year agreement.

4.       Which provider will be cheaper based on how you use your phone?

Mobile plan providers are in business to make money. You either pay a high amount each month (via a cap) or pay a low amount and probably pay extra because you go over the small allowances.

Also if you go overseas – BE VERY CAREFUL. International calls you make (and even those you receive) can be very expensive. And don’t get me started on international data (I’ll write more about ways to reduce your mobile bill while you are overseas).

As I was on Optus and my girlfriend on Vodaphone – we checked out which of these had the best deal.

The cap deals were quite similar with similar value, call rates, etc (I’ll expand more on this in another article).

But with free calls – Optus offered 5 mins free to Optus mobiles – but Vodaphone offered free calls to other Vodaphone mobiles. Because of this we decided to go with Vodaphone.

Vodaphone was also offering a $10 discount on the $69 plan (so we got for $59/month).

5.       Do you really need the newest/best phone?

The newest/best phone will force you up onto a higher cap (and you may have to pay extra per month on top of the plan).

With the HTC desire I will pay an extra $5 a month (an Iphone 4 would be the same).

But a cheaper phone might do 95% of what I want to do, 95% of the time. I mean my new phone has a camcorder which is sweet – but how often will I use it really? 

6.       Should you insure the phone?

While phones usually come with warranty – this warranty only covers regular use of the phone. It DOESN’T cover if your phone gets stolen, you drop it, you jump in the pool with it, etc.

Self-Insurance You don’t have to take insurance – you can self-insure. This means that you just take the risk and if something happens you pay for a new phone. Whether you self-insure or take insurance will depend on a few factors: whether you are happy to buy a new one, cost of insurance, likelihood of something happening, likelihood that it won’t be covered by warranty, etc.

My girlfriend decided to self-insure but I decided to pay the $10 a month to insure my phone. As the handset costs over $500 to buy again I decided that $10/month was reasonable in case something happens. In 6 months (or a year) after the phone is scratched and I don’t care as much if something happens to it – I might cancel the insurance and self-insure.

7.       When can you get the new phone & use it?

I was not a vodaphone customer –so I could sign up and take the phone with me on the day (20 December) and rang Vodaphone the next day and went through the automatic service and activated my sim card.

As my girlfriend is an existing Vodaphone customer – she has to be mailed her phone and wait a few weeks.

Posted in Saving Money

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