Does Buying Phones Outright Make Any Sense at The Moment?

Lp3rsonally on 11/11/2023 - 11:48
Last edited 11/11/2023 - 11:49

So I figured this out in looking at a deal on a iPhone.

The best outright deals on these phones are like ~5% off the RRP; but carriers are offering 0% monthly repayments on RRP, for 3 years.

If you try to adjust for 3 years' inflation, the carrier price almost universally wins. I do this in a crude way by looking at RBA's inflation calculator for the last available 18 months (10.5%) and applying that to the whole phone price.

This is especially true if you have (a) any sort of interest-bearing loan, or (b) enough cash to want to get a good rate from a bank; as the interest accrued from a decent bank account will likely make up the difference.

Thoughts? Have I got this right?

Mobile Mobile Phone

Comments

  • rb123 on 11/11/2023 - 11:52
    +26

    You will be stuck on an overpriced plan for the 3 years too

  • Muzeeb on 11/11/2023 - 12:14

    @DashCam AKA Rolts

    Does this make sense? Cheers

  • Stopback on 11/11/2023 - 12:17
    +2

    The human mind will find a way for you to justify your purchase

    Just buy and move on

  • AwesomeAndrew on 11/11/2023 - 12:29
    +7

    You should buy your phone using an OzBargain deal to save money compared to RRP and use a prepaid mobile plan deal which is likely to be much cheaper than the postpaid options from the major carriers.

    • WatchNerd on 11/11/2023 - 12:33
      +9

      Awesome comment Andrew.

  • Hugh G Rection on 11/11/2023 - 12:33
    +3

    i always buy outright. you will be stuck with a bad carrier like vodafone or optus for 3 years. way too long. your plan is also expensive.

    i would be more willing to do it if it is telstra. but telstra is so good that they don't really have deals. they have no problem getting people because there service is amazing.

    fyi, i also buy a new 1TB iPhone pro max every year and pass my old one to my family members, but you could also sell every year and buy every year and the value still remains very high in comparison to other phones.

    the longest i will do is a 1 year contract. 2 year contract is way too long, and 3 year is ridiculous.

    • p3rsonally on 11/11/2023 - 13:17

      Yeah, I'm with Telstra either way as I need roaming and good service quality, so I just kinda assumed this, it's not fair to do that I guess.

      • AwesomeAndrew on 11/11/2023 - 15:33

        You can consider buying a local SIM card at the destination. It should be cheaper than using roaming.

        Boost mobile and some other carriers use the Telstra network, and their service quality is almost as good as going direct with Telstra, just with capped data speeds (150mbps).

        If you really cannot slightly compromise the service quality need it then I guess you'll have to pay the premium for Telstra, and if you want iPhone then it's worth getting it on contract as iPhones are almost never significantly discounted.

        • p3rsonally on 11/11/2023 - 23:12
          +1

          It's not service quality, it's contactability.

          I'm in IT and I need to be contactable in an emergency, on my existing number, even when overseas (and often in some pretty weird countries). Even things like MFA text tokens can cause a major issue. That risk calculation is just part of a professional expectation for me, and there's just an assumption in my case that I need to pay for the best possible option. It comes with the job title (SRE)… It didn't occur to me that this was factoring in to my decision, but it absolutely is… and I have to say I agree with most of the arguments here for most people, that requirement doesn't apply, and so this argument makes no sense.

          Incidentally, I do supplement my Telstra roaming with the Flexiroam X app + eSim. Definitely recommended if you're planning on travelling and don't need your number to be the same.

  • Nillionaire on 11/11/2023 - 12:44

    As opposed to a plan? Yes lol. I buy my phones outright because my sim plans cost is significantly lower than the lowest that Telstra, Optus, Voda have

  • freefall101 on 11/11/2023 - 12:46

    Inflation over 2-3 years isn't really going to be enough to sway purchasing, compared to say the Pixel 8 Pro being $830 + getting a $200 a year annual phone plan.

    The only half decent option is the really big upfront discounts, like the JB hifi $1400 giftcard promotion recently then paying $2400 over 2 years. But you should be accounting for 3-5% inflation for the next year and hopefully back down to 2-3% range in 2 years.

  • CodeXD on 11/11/2023 - 13:48

    The best outright deals on these phones are like ~5% off the RRP

    This is where you are way off. There are way better deals than this, unless you are exclusively talking about iPhone.

    last available 18 months (10.5%) and applying that to the whole phone price.

    It doesn't just apply to phone prices, pretty much everything. The real question is what the future inflation rate will be.

  • Jimothy Wongingtons on 11/11/2023 - 14:07

    High end phone no

  • MeesusEff on 11/11/2023 - 14:18
    +3

    I've got the grandfathered price protection on 28D and Coles Mastercards, so buying everything outright pays off for me in the long run

  • mskeggs on 11/11/2023 - 14:54
    +4

    Everyone does these calcs assuming a risk free world.
    Breaking even or saving tens of dollars over 2 or 3 years is meaningless if you lose a job and suddenly an $85/m phone plan you are committed to for years looks very costly.

    The flexibility to be not locked in works the other way too, when an amazing deal comes up.

    • Minimum chips on 11/11/2023 - 16:32

      In this way it's like financing a car. Sure it's a big purchase price but if you can pay upfront it gives peace of mind.

    • p3rsonally on 11/11/2023 - 23:20

      You could just put the money in the bank, to me that seems like better risk protection.

  • coffeeinmyveins on 11/11/2023 - 21:57
    +1

    I love how you haven't even factored in the overpriced phone plan you're stuck on which is where they make their money. But sure. Go ahead and do it while I enjoy my super cheap long expiry sim at 50c a day

  • watwatwat on 11/11/2023 - 22:34

    the carrier price almost universally wins.

    Makes no sense. Post an example?

    You can get annual plans for $100 per year for mobile services.

  • Love Cheap on 12/11/2023 - 13:54

    Get a credit card that offers balance transfer for more than 12 months(0% fees). A while back NAB was doing a promotion and offering balance transfer for 24 months(0% fees). That way you are not stuck with overpriced mobile plans and paying in instalments without any fees

  • bobbified on 12/11/2023 - 15:25

    It was better before when the carriers subsidised the handsets. Now, it's not worth it on a plan. The phone on a plan is the same phone price (at full RRP), divided by the number of the months. And you're locked into their plan that is often worse than their SIM-only plan.

    Thing is, phones (other than the iphone) have a huge price drop a couple of months after release and the carriers still sell them at RRP.

  • notJV on 16/11/2023 - 10:33

    I bought my iPhone using the 15% JB Hifi gift card going on in September. Saved ~$300 on the phone, which will be used to prepay my Boost annual SIM plan and then some change.

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