Mobile phone pay monthly interest charges for handset

[handbraketurn]

Hello,

Does anyone know what mobile providers charge in interest for handsets if you get them on a monthly contract.

They don't tell you what the underlying contract cost is, but trying to work out from Vodafone website:-

Iphone 8 – 64gb, on apples website for £599 brand new (incidentally available with 12 months 0% finance).

EG: Vodafone - Red entertainment bundle.

25GB data, unlimited calls/texts, 24 month sub to Spotify/tv etc, £29 upfront and then 24 payments of £57 (http://tiny.cc/abse4y)

Sim only deal (12 months), almost same (but 5gb less data). 20GB data, unlimited calls/texts, 24 month sub to Spotify/tv etc, £20 PCM (http://tiny.cc/zbse4y)

If we assumed the underlying cost of the contract above without the phone was the same £20 (might be slightly more for the extra 5gb data). That would mean the cost of the phone is £37 PCM plus £29 deposit. £37 x 24 = £888 and with the deposit is £917, for a £599 handset. And I assume they get them cheaper as a bulk purchaser.

I calculate that as an APR of 55% (https://www.thecalculatorsite.com/finance/calculators/interest-rate-calculator.php)

That does not seem like a good deal

Anyone know more about how they work?

[hutchst]

No no no, the extra isn't profit, it's the charge they make for letting you use their own specialised locked-down firmware on your phone, to make sure that they can monitor all your activity, to ensure that they can tailor your online experience to best suit your requirements.

[Paul Drawmer]

I was under the impression that everyone knows that buying a handset via a usage contract is a bad deal. It's just the most convenient for those that must always have the latest phone.

[hotchy]

Then again I'm still pay as you go £10 a month and it's been so long iv built my data up above your quoted amount and cant get s better deal so buy my handsets. Got the galaxy s9 when it was £899 for just over £450 from Italy. Dual sim slot too which was nice as I can pop a work sim in if i ever have too.

[Mike335i]

Paul Drawmer said:

I was under the impression that everyone knows that buying a handset via a usage contract is a bad deal. It's just the most convenient for those that must always have the latest phone.

Not always, mine is £51 pcm for unlimited everything and a phone that cost £899 new. Sim only deal was £27.

51-27=24 cost for the handset per month.
24x24= £576.

Total cost would have been 27x24+899= 1547.
Or 24x51= £1224 on contract

[cobra kid]

Paul Drawmer said:

I was under the impression that everyone knows that buying a handset via a usage contract is a bad deal. It's just the most convenient for those that must always have the latest phone.

If I was to buy a handset and go sim only, what's the warranty on the phone as opposed to if I was on a 24 month contract?

[hotchy]

cobra kid said:

Paul Drawmer said:

I was under the impression that everyone knows that buying a handset via a usage contract is a bad deal. It's just the most convenient for those that must always have the latest phone.

If I was to buy a handset and go sim only, what's the warranty on the phone as opposed to if I was on a 24 month contract?

Drop it and its your fault. Buy insurance separately from protect my bubble or something for a few quid.

A fault then the same as any electrical item, which is 2 years I'm sure.

[karma mechanic]

Paul Drawmer said:

I was under the impression that everyone knows that buying a handset via a usage contract is a bad deal. It's just the most convenient for those that must always have the latest phone.

Depends on the deal. My Mate 20 Pro is on a 2 year contract, 80 GB and unlimited texts and calls, lots of roaming. Spotify Premium included.

£37 a month, so £27 after deducting the Spotify I was otherwise paying, and then another tenner a month off via redemption.

£17 a month for two years of pretty much unlimited everything and an unlocked unbranded 900 quid phone, total £408. There's no way I could match that by buying the phone separately even through grey imports.

Edited - it is 80 GB data. Still a lot.

Edited by karma mechanic on Monday 25th March 09:22

[Oakey]

I've never paid interest on any contract handset from O2.

[mcflurry]

I am paying £36 a month with a £200 rebate for a Huawei P20 Pro.
The phone was £699 to buy outright, whereas I get 100gb a month for an all in price of £664