What does leasing a phone mean?
Like renting a house, leasing a phone means you do not actually own the phone. Rather, you have to give it back at the end of your term, usually in good working condition. So why would anyone willingly go for this option?
- By leasing, providers like to offer customers extra incentives such as bonus data, discounts and other perks.
- You also usually get the opportunity to upgrade your phone after just a year for a relatively low price.
The trade off with this is that you have to hand back your phone at the end of your term (usually 24 months) in good working order, or be subject to an extra fee, similar to as if you left the house you were renting in a state of disrepair (i.e. losing your bond). However, this may be fine for some people, as they would ordinarily upgrade their phones after two years anyway, but keeping it near blemish-free may be an issue to those accident prone people, or those who text while on the toilet!
While you may get extra incentives to lease, at the end of the day you don’t have a mobile phone at the end of your contract to use, or sell second-hand to make a bit of money. So what providers allow you to ‘lease’ a phone, and what are they offering to entice customers?
Optus ‘Flex’ Phone Leasing
Optus is perhaps one of the foremost providers to really push its leasing phone plans – labelled ‘Flex’ plans. These leasing plans claim to offer better flexibility, and this is shown through the ability for customers to upgrade their phone after just a year for $99.
- All you have to do to upgrade is return your current phone in ‘good working order’.
- A cracked screen will cost you $229
- More significant damage could set you back $499
Optus claims you can save up to $240 over 24 months if you lease, rather than buy. The ‘Flex’ leasing plan for the iPhone X 64GB starts at $90, while to actually own the phone at the end of your term you can expect to pay $100 extra. Usually you have to get the hottest phones to go on to a leasing plan, such as those in the iPhone 8 and iPhone X range, and the Samsung Galaxy S8. As you can see below, Flex plans can often carry much more bonus data, and are delivered at cheaper prices.
Telstra ‘Swap’ Phone Leasing
Labelled ‘Go Mobile Swap’, Telstra’s phone leasing program is similar to Optus in that you stand to get a range of extra perks if you lease, rather than repay to own. You also get the opportunity to upgrade in 12 months if you then sign up to a new 24 month plan.
- The opportunity to upgrade costs $99 and you’ll be again subject to ‘good working order’ conditions
- You may be subject to a penalty of up to $499 if not returned in such condition
Alternatively, you can pay ‘fair market value’ to then own the phone if it’s damaged. As you can see below, if you lease you usually receive significant data bonuses in return, as well as discounts, some to the tune of $10 or more per month. Leasing plans also include hefty amounts of data – often 10GB or more – compared to the regular plans’ relatively paltry amounts.
Alternatives to Phone Leasing
The main alternative to leasing a phone is obviously to just hop on a regular old phone plan, for which you can keep your phone at the end of your plan, and keep it or sell it second-hand. Another option is to buy your own mobile phone outright and source a SIM-only plan. While iPhones and Galaxies require significant upfront cash outlays, it could work out cheaper in the long run. Unlimited calls and texts and 1GB of data can be found for as little as $10 these days, so you could stand to save.
While you likely won’t get big data bonuses and other perks, what you do get is simple, no-bull value. Keep an eye out for providers such as Moose Mobile, Amaysim, Lycamobile and Vaya, which all offer cheap 1GB unlimited plans under $15. 2GB from similar providers can be found for under $20, while 5GB can be found for under $30. Keep in mind that to get even better deals, you may have to sign up for 12 months.
Is leasing a mobile phone a good idea?
Leasing a mobile phone presents customers with the obvious problem of not getting to keep their mobile phone after their term expires. However, telcos aim to mitigate this by providing big data bonuses, discounts and other perks to customers in order to get them to sign up. It may be worth it for some people, but may not be for others. If you’re someone who likes to get a new phone after a couple years anyway, leasing could be a good way to save some money and have more data to play with.
- For frequent upgraders, the option to upgrade after 12 months can be handy.
- Those who are accident prone with their phone may not appreciate the hefty fees for damaged phones.
For many other people, traditional handset phone plans may be a better option as you get to keep your phone after, and do what you like with it. Alternatively, buying your own phone outright and sourcing your own SIM-only plan may also be a viable option. In any case, leasing your mobile phone is tempting and is bound to suit a range of people, but others may struggle to see value in being responsible for something you don’t actually own.