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The Economics of Buying Phone - Outright Versus Purchasing a Phone Contract

Whenever the newest iPhone surfaces the market, the smart-phone users have to face the upgrading dilemma. So what exactly is the smart way to purchase your new smart phone? With a close competition between both the Australian and US dollar, the local prices for these premium smartphones go way up for even the basic entry level iPhone 7 models.

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The Economics of Buying Phone - Outright Versus Purchasing a Phone Contract

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  1. The Economics of Buying Phone - Outright Versus Purchasing a Phone Contract

  2. Whenever the newest iPhone surfaces the market, the smart-phone users have to face the upgrading dilemma. So what exactly is the smart way to purchase your new smart phone? With a close competition between both the Australian and US dollar, the local prices for these premium smartphones go way up for even the basic entry level iPhone 7 models.

  3. Given below are the reasons for purchasing both outright and on contract to enable you to make a better choice:

  4. Reasons to Purchase Outright: • You can upgrade or re-sell your phone after 12 months. • You are at liberty to shop for SIM only plan with less or more data and phone whichever suits your needs.

  5. You have the freedom to change the service providers as you are not locked to one provider and can switch SIMS for travelling. You need to find finance for the upfront cost or use a potentially expensive loan.

  6. Reasons to Purchase on Contract: • You are locked to the network for 2 years. • You get to enjoy discounts for bundle services like internet or phone phone and bonus offers like deals for free streaming. • There is no need for you to pay for the phone upfront.

  7. Contract purchase could include damage insurance from the provider for extra cost. Warranty coverage for life of contract.

  8. The Pros and Cons: Now for iPhone fans, it is kind of hard to resist the temptation of latest high-tech smartphone. Outright or contract purchase? The pros and cons of these are given below:

  9. Buying on Contract/Plan allows you to have that phone with you without even passing up the annual holidays as the cost spreads over 24 months. The downside? You have to bear with that carrier for the life of the contract.

  10. Buying Outright could sure burn a hole in your pocket but you get to own the phone at least and can switch to any carrier that offers the cheapest phone plan. You are free to swap down the lane. • Outright Purchase (SIM only Plan) vs. 24-Month Contract: • First of all you are required to see the outright cost of the phone and then add it to the cost of a SIM only plan for a period of 24 months.

  11. SIM only plans happen to be available from telcos that include Vodafone, Optus, Amaysim and Telstra. It is not pay-as-you-go or prepaid though that could be the other option.

  12. Conclusion: Now your decision may come down to data value vs upfront cost when deciding to purchase a phone outright or going for a phone on contract. Now it would be wise to buy a phone outright as SIM only plans tend to have more phone allowances and data along with the choice to switch to a better deal anytime as it involves substantial upfront cost. The plan cost could be a little less over the 2 year life of contract but includes less data value.

  13. Thanks! ANY QUESTIONS? You can find me at: http://www.fix2u.com

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