Should I lease a mobile phone?

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Lease plans: no longer an option

As of 22 July, 2019, Optus will no longer offer its Lease options on 24-month handset plans.

This means that lease plans won’t be available to new customers, but if you’re on an existing lease agreement, you’re probably wondering how this will impact your current plan.

What to do if you’re on an Optus Lease plan

If you’re still on your first year of your plan, you can upgrade to a new device before the 12-month mark and end your lease agreement. To do so, you’ll need to pay out the remaining balance of lease phone, plus a ‘cancellation fee’ that’s presumably the equivalent of the gap between your device’s lease price and full retail cost. You’ll then need to re-contract to a new non-leasing plan, but you’ll own your phone.

Customers who are on months 12-24 of their lease plan have a less confusing option for ending their contract. You can simply pay the $99 early upgrade fee, hand back your leased device, and sign up to a new 24-month phone and plan. If your leased phone is in good working order, there’s no more to pay; however, if you do return a damaged device, you’ll need to pay a fee of up to $499, as per your original lease agreement.

If you’re at the end of your lease plan, you can return your phone in good working condition to Optus, and either sign up for a new plan, or cancel your service completely. You also have the option of paying the extra ‘fair market price’ and keeping your leased device, or continuing to lease for up to an additional six months. Customers who began their lease between 6 May 2017 – 3 December 2017 can lease for a further six months; if you signed up after 4 December, 2017, you can lease for an extra two months.

Optus will charge a non-return fee to any customers who fail to return their leased phone after their contract ends and any permitted extra lease months have lapsed. This fee is determined by the ‘fair market value’ of your leased device, and is basically the same as paying extra to buy your phone: once it’s paid, the handset is yours to keep.

Although lease plans are no longer an option for Optus subscribers, the following information may still be helpful for existing lease customers. Just be aware that if you’re not already on an Optus lease plan, you’re unable to lease any device from an Australian telco, as Telstra ended its similar lease options will the revamp of its postpaid phone plans.

 

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The following table shows a selection of 24-month Optus postpaid phone plans on Canstar Blue’s database, listed in order of cost, from the lowest to highest and then by data allowance, largest to smallest. Device payments are not included. Use our comparison tool above to see plans from a range of other providers.

Brand Features Max Data**/billing period Advertised Cost^^/billing period
Optus Logo

$45 My Plan Plus

  • Unlimited standard national calls & SMS
  • Stream Optus Sport & Nat Geo data free
  • Special offer: Up to 12 months free Apple Music

min. cost $1,080 over 24 month plan period, plus any device repayments

4GBMax Data**/billing period $45Advertised Data^^/billing period
Optus Logo

$65 My Plan Plus

  • Unlimited standard national calls & SMS
  • Stream Optus Sport & Nat Geo data free
  • Special offer: Up to 12 months free Apple Music

min. cost $1,560 over 24 month plan period, plus any device repayments

60GBMax Data**/billing period $65Advertised Data^^/billing period
Optus Logo

$85 My Plan Plus

  • Unlimited standard national calls & SMS
  • Unlimited standard international calls & SMS to 35 countries
  • Stream Optus Sport & Nat Geo data free
  • Special offer: Up to 12 months free Apple Music

min. cost $2,040 over 24 month plan period, plus any device repayments

80GBMax Data**/billing period $85Advertised Data^^/billing period
Optus Logo

$105 My Plan Plus

  • Unlimited standard national calls & SMS
  • Unlimited standard international calls & SMS to 35 countries
  • Stream Optus Sport & Nat Geo data free
  • 2GB overseas roaming data
  • Special offer: Up to 12 months free Apple Music

min. cost $2,520 over 24 month plan period, plus any device repayments

200GBMax Data**/billing period $105Advertised Data^^/billing period
Optus Logo

$125 My Plan Plus

  • Unlimited standard national calls & SMS
  • Unlimited standard international calls & SMS to 35 countries
  • Stream Optus Sport & Nat Geo data free
  • 4GB overseas roaming data
  • Special offer: Up to 12 months free Apple Music

min. cost $3,000 over 24 month plan period, plus any device repayments

200GBMax Data**/billing period $125Advertised Data^^/billing period

What does leasing a phone mean?

Most phone-on-a-plan offers mean you’ll pay off your handset as part of your total monthly plan cost. Customers sign a contract for a specified plan term – usually 24 months, but sometimes 12, 18, or 36, depending on your telco. You’ll make a payment for both your plan and phone each month until your contract is up, after which your device is officially yours to keep. If you want to cancel your plan early, you’ll need to pay an early termination fee to cover the remaining cost of your smartphone, but otherwise it’s a fairly straightforward agreement.

However, Optus offers customers the choice to lease selected high-end smartphones, rather than buying on a standard contract. Basically, a lease agreement works the same as buying: you sign a 24-month contract, take your new device home, and make monthly payments for both your mobile plan and phone. But rather than paying off your phone and owning it at the end of your payment term, you’re instead leasing it – meaning you don’t actually own the device, even after your contract ends.

Once your term is up, you’ll need to return the phone to your telco in good working order (a damaged phone means you’ll need to pay an additional fee). If you’d prefer to keep your device, you have the option of making an extra final payment to buy your leased phone; otherwise, simply give back the handset, and you’re free to buy or lease a new device from your telco.

Unlike buying plans, lease contracts also give customers the option to upgrade their phone after 12 months of payments. Once your first year of leasing is up, you can swap your device for an all-new smartphone, but you will need to pay extra: upgrading incurs a $99 fee from Optus.

Once you’ve paid this fee, you’ll need to hand in your current leased device (again, in good working order), then sign a new 24-month agreement for your new phone.

Why lease a phone?

Customers may be attracted to a phone lease plan due to the difference in price. Generally, leasing your phone will save you $10 per month when compared to buying on an equivalent plan from your provider. However, if you do decide to buy your phone later, this price difference may be wiped out by the extra fee you’ll need to pay to own your handset.

Reasons you may prefer to lease rather than buy:

  • You like to upgrade your phone frequently.
  • You’re looking to save money on your monthly phone bill.
  • You don’t care about owning your phone, and don’t normally re-sell your old smartphone when you upgrade.
  • You’re careful with your devices, and rarely damage your phone.

Currently, only Optus allows you to lease your phone rather than buy, and the option is only available for selected devices. Telstra had previously offered lease options, however the telco shifted its focus to offer a smaller range of simplified postpaid plans and no longer offers the lease options.

Optus lease plan details

When you’re leasing a phone from Optus, these are the details you can generally expect on these plans from the telco:

  • $10 monthly discount on your device payments
  • Available with the latest devices from Apple, Samsung and Google
  • Upgrade after 12 months for a $99 fee
  • Damaged device can cost up to $299 for minor damage and up to $499 for significant damage
  • At the end of your lease you can return your phone (and upgrade), buy for a fair market price or lease for an additional two months

Lease Phones

Optus My Plan Flex

Optus’ lease plans are called My Plan Flex, and are offered on a 24-month contract (with the option to upgrade after a year). Optus pushes the flexibility aspect of these plans, as well as the convenience of being able to trade in your phone for a newer, hotter model after only 12 months.

Devices available on Optus lease plans

Like Telstra, Optus only allows certain phones to be leased by customers. The current list of devices which are available on Optus lease plans is below:

  • Google Pixel 3
  • Google Pixel 3 XL
  • iPhone XR
  • iPhone XS
  • iPhone XS Max
  • Samsung Galaxy S10
  • Samsung Galaxy S10+
  • Samsung Galaxy S10e
  • Samsung Galaxy Note9

My Plan Flex lease plans are available with the same talk, text, and data inclusions as Optus’ standard My Plan Plus buying plans; the main difference is that Flex plans are $10 cheaper each month for the handset repayment. Once you’ve signed up, you’ll then make monthly payments over 24 months, but you can upgrade to a new phone at the 12-month mark.

Upgrading

To upgrade, you’ll need to pay a $99 fee and return your phone in good working condition. You’ll then sign a new 24-month agreement for your next device, either to lease or buy. You can upgrade at any time after 12 months, but keep in mind that the $99 charge applies no matter how little time is left on your contract – so if you do plan to upgrade, you’re better off doing it as soon as the option is available.

If you want to upgrade a damaged phone, you’ll need to pay extra. A cracked screen incurs an upgrade fee of $299, but more substantial damage – including phones that can’t be unlocked – may cost you up to $499. This $499 fee also applies if you return your phone in damaged condition at the end of your 24-month agreement.

Ending your lease

If you do stick out the full two-year Flex plan, you have three choices once your 24-month term is over. You can return the phone to Optus with nothing more to pay (unless your device is damaged, in which case you’ll pay the fees listed above). You also have the option of extending your lease for an additional two months, at the same monthly price; after 26 months, you’ll then be charged the fair market value for the phone.

This ‘fair market value’ charge also applies if you decide to keep your phone at the end of your Flex plan. This price is determined by Optus when you request to buy out your device, and will vary depending on the model and storage size of your phone. However, once you’ve paid it, your once-leased phone is officially yours to keep, and can be used on any SIM-only Australian phone plan.

If you do decide to lease with Optus, you can save up to $240 over 24 months when compared to buying the same phone on an equivalent Optus My Plan Plus data plan. However, keep in mind that this saving may decrease if you decide to upgrade, if you want to buy your phone later, or if you damage your phone and still want to return it.

Alternatives to phone leasing

There are two main alternatives to leasing your device. The obvious solution is to sign on for a regular phone plan, in which you make monthly payments and eventually own your phone outright.

While this does mean your phone won’t technically be yours until your contract ends, once your agreement is up, there’s nothing more to pay and the phone is yours forever. You’re then free to change to another plan or provider, or sell your phone second-hand for some extra cash.

SIM-only plans

If you’ve got the money upfront, you could also buy your new phone outright and pair it with your choice of SIM-only plan. While the phones that tend to be offered on lease plans – namely iPhones, and Samsung’s flagship Galaxy range – require significant upfront cash outlays, this initial investment could work out cheaper in the long run if you opt for a low-cost mobile plan. Unlimited calls and texts, and 1GB or more of data each month can be found from as little as $10 monthly, depending on your provider.

While you may not get big data bonuses and other perks, what you do get is value for money. Keep an eye out for providers such as Moose Mobile, Boost Mobile, AmaysimCatch Connect, Hive Mobile, and Exetel, which all offer cheap 1GB unlimited plans under $15. Many providers offer 3GB or 4GB of monthly data for under $20; so if you’re not a heavy data user, a cheap SIM-only plan is a great way to save money.

SIM-only plans are available on both a prepaid and postpaid basis, depending on your choice of telco. However, to get the best postpaid deals, you may need to sign up for a 12-month contract – something to think about if you value the flexibility to change providers and plans without penalty.

Is leasing a mobile phone a good idea?

The downside to leasing a phone is that it won’t be yours to keep once your contract is up – unless, of course, you plan to pay extra. However, if you do tend to hang on to your devices for longer than 24 months, you’re probably better off on a standard two-year phone plan or similar.

In theory, leasing will save you money, provided you stick out the 24-month agreement and avoid damaging your device. But if you decide to upgrade after 12 months, you’re hit with a new $99 charge – and if you damage your leased phone at any point, you’ll need to pay up to $499 in fees.

If you’re lucky, damages may be covered by your phone’s warranty, or Australian Consumer Law. If this is the case, your device may be repaired or replaced for free, and you won’t need to pay extra when you eventually upgrade or end your lease plan. Otherwise, the money-saving benefits of leasing may be lost in the event of a smashed screen.

Overall, if you’re accident prone, not hugely concerned about upgrading annually, like to sell your devices when you do upgrade, or otherwise unsure, a mobile phone lease probably isn’t right for you.

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