Want the 3GS, on O2, then the 2010 iPhone, is this the most cost effective way?

[drpellypo]

Sorry if this is a load of maths, but I have always tried to be thrifty!

As I see it, there are several options, all of which expensive, but some considerably more expensive than others.

The first option is the most obvious. Pay off your contract and start a new one.

The actual real term cost of this is:

Pay off your current contract (7x35) = £245
Buy a new 3GS = £184.98
Sell existing iPhone = £200 (minimum I reckon)

Total: £229.98

BUT...

In July next year, if you've bought the 3GS, you are going to want the new one.

So, let's do that sum again for July 2010.

£229.98 + £229.98 = £459.96

Now if we add line rental onto this the actual cost is:

£1,509

(because you will have 12 months line rental to pay til July 2010 plus the cost of the paying off early fee's and handset prices, then add 18 months line rental that you will be tied to from July 2010)


The second option is to get a new 3GS, with a new contract and run the two concurrently, putting your existing sim in the new phone. Although this spreads the cost of paying off early, it's still the same amount of money.


The third, which I think is the most cost effective option is buy a PAYG which is:

Handset = £440.40.
7 months left on your current contract = £245

£685.40

Once you have paid this £685 you are then free to either switch to PAYG, or go to a simplicity tariff, both of which will make your total cost of ownership drastically cheaper. In addition to this, you won't have to pay an early pay off fees in July next year.

 

[beardboy]

I'm going down the PAYG route on release day.

Then the i can start a new contract next summer, if the phone is drastically better, or i'll skip that and get the 2011 one.

 

[drpellypo]

Makes a lot more sense, doesn't it? I would be gutted if I started a new contract now and then a drastically different iPhone came out next year. Still a shed load of money though. But worth it in my eyes, cos the iPhone is the best phone out there.

 

[Phil A.]

The only problem with your last calculation is you don't have the cost of the 2010 phone in there anywhere. Also, although you have included line rental in your first costings because you are tied to a contract, you've included nothing in your "cheaper" option. Granted, you can go PAYG or simplicity, but it still costs something if you want to use the phone and you should factor it in.

So, on top of your £685.40, you need to add next year's handset
(another £450 or so if you don't want to be tied in) then, say, 12 months contract to take you to 2011 at at least £20 per month.

This gives you a total of £1375.40. Admittedly, it is cheaper than the £1,509 for your other option, but that higher figure includes 18 months of line rental, not 12.

Comparing like for like and adding another £120 for 6 months line rental brings the figure up to £1495 or almost exactly the same...

 

[drpellypo]

The only problem with your last calculation is you don't have the cost of the 2010 phone in there anywhere. Also, although you have included line rental in your first costings because you are tied to a contract, you've included nothing in your "cheaper" option. Granted, you can go PAYG or simplicity, but it still costs something if you want to use the phone and you should factor it in.

So, on top of your £685.40, you need to add next year's handset
(another £450 or so if you don't want to be tied in) then, say, 12 months contract to take you to 2011 at at least £20 per month.

This gives you a total of £1375.40. Admittedly, it is cheaper than the £1,509 for your other option, but that higher figure includes 18 months of line rental, not 12.

Comparing like for like and adding another £120 for 6 months line rental brings the figure up to £1495 or almost exactly the same...

Yes, I'd missed that bit out!

Of course the alternative is that you will be able to 'upgrade' to the 2010 iPhone and get it at a cheaper price, as oppose to having to pay a penalty and extend your contract 6 months further than you would have had to do if you bought out early.

I'm starting to get confused now

 

[MattZani]

Cheapest option is.

Buy 3GS on Pay&Go
Sell 3G
Put 3G Sim in 3GS
Wait for Contract to End
When contract ends, take out Simplicity Contract

No Buying out your contract every year.

 

[iSimon]

The best way to compare the costs is to look at what position you will be in next summer when the 2010 iPhone comes out.

In these cases I assume you currently have a 3G 16GB with "£35" contract that expires in Jan 2010 and you are wanting the 3GS 16GB. I keep all prices at the current VAT level to keep it simple (it actually goes back to 17.5% in Jan 2010).

Option 1 (Buy-out current contract, sell 3G and buy 3GS on new contract):

This will have cost you...

6x£34.26 (£205.56) to buy out current contract
£184.98 to buy 3GS with new 18 month contract
12x£34.26 (£411.12) for a year's worth of that new contract

You will have got some money back from selling your 3G (£200 going rate on phone recycle websites for the 16GB 3G) but you will also have 6x£34.26 (£205.56) left to pay on the 3GS contract should you want to upgrade...

Some come June 2010 your net expenditure + outstanding obligation will be £205.56 + £184.98 + £411.12 - £200 + £205.56 = £807.22, and you will have a 3GS available to sell of course.

Option 2 (Sell 3G, buy 3GS PAYG and continue existing contract / switch to simplicity):

£440.40 to buy the 3GS
6x£34.26 (£205.56) to continue existing contract
6x£19.58 (£117.48) for 6 months of Simplicity20

Less what you sell the 3G for of course (£200), but this time with no outstanding contractual requirement - so you would be free to either buy the 2010 iPhone on contract, or PAYG again and continue with the Simplicity deal. So in June 2010 your net expenditure will have been £440.40 + £205.56 + £117.48 -£200 = £563.44. This is clearly better financially than Option 1, with the only downside that you would lose visual voicemail and free cloud wifi when switching to Simplicity. If free cloud wifi is important you can retain that as a bolt on with Simplicity (6x£26.92 instead of 6x£19.58) which would still only bring the net expenditure up to £607.48. If you can't live without visual voicemail either then of course you would be free to simply remain on the iPhone contract beyond the minimum term and keep it rolling along month by month (6x£34.26 instead of 6x£19.58), which would end up with a net expenditure next summer of £651.52, which is still far better than Option 1.

So in summary, in June 2010 your net expenditure (including any outstanding contract at the time) with the various options would be:

Buyout+new contract = £807.22
PAYG+current contract+simplicity = £563.44
PAYG+current contract+simplicity(inc wifi) = £607.48
PAYG+current contract (rolling) = £651.52

I know which one I'm going for!

 

[fireshot91]

So is this pretty much this (Didn't understand correctly):


Sell current iPhone- Pay off contract
Buy 3GS
Sell 3GS next year
Pay off contract (Or get an early upgrade price)
Buy the new iPhone

 

[iSimon]

Sorry if my post wasn't clear, but it is *far* cheaper to sell current 3G and buy the 3GS PAYG and simply continue on your existing contract. Even if you don't move down to simplicity and stay on your current iPhone tariff it will save you money - but you'll save an extra shedload if you do downgrade to Simplicity when you can.

 

[limesmoothie]

Cheapest option is.

Buy 3GS on Pay&Go
Sell 3G
Put 3G Sim in 3GS
Wait for Contract to End
When contract ends, take out Simplicity Contract

No Buying out your contract every year.

Amen to that. This whole debacle made me actually question the cost of the contract, then the penny dropped and I realised this. The only thing I need is to retain my number and the simplicity tariffs are pretty good value.

 

[fastbite]

I'm doing the same: Pay&go, sell, wait, simplicity. Buying from the apple store.