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How to Be a Smart iPhone Buyer, Part 1

The new iPhones have been launched at Apple’s latest event on 12th September 2017.

The best way to buy an iPhone will depend, to some extent, on what sort of buyer you are and to your personal preferences. In these two tutorials, I’ll show you how to be a smart iPhone buyer and make how to make an informed decision.

Ways to Buy an iPhone

There’s essentially four main ways to purchase a new iPhone:

  1. Outright purchase
  2. From a mobile provider
  3. On finance
  4. On the Apple iPhone Upgrade Programme

1. Outright Purchase

Cash is king. Well, that’s usually the case but it’s highly unlikely that you’ll persuade any Apple Store to give you a discount for cash.

That said, if you’re the sort of person that likes to avoid debt, and you have the money, then purchasing a new iPhone outright will give you the peace of mind that it is yours and you’ve paid for it in full.

If, however, you’d like to be a savvy buyer and you’re not necessarily hung up on buying the latest model then your best bet is to visit an Apple Store within a day or two of the release of the new model.

Ask for prices on yesterday’s iPhone and you’ll find that you can pick up yesterday’s model for a significant saving, or upgrade to more memory within the price that you expected to pay yesterday.

Even yesterday’s iPhone is powerful enough to future-proof you for a few years.

Apples new iPhone X
Apple’s new iPhone X

2. Purchase With an Airtime Contract From a Mobile Provider

This has, historically, probably been the most common way that people have purchased mobile phones, certainly in the United Kingdom at least.

A mobile provider, such as O2, Vodafone, EE or Three will offer you a 12, 18 or 24-month contract. Typically, you’ll pay a monthly fee and they’ll provide you with the mobile phone and give you a call, text and data allowance.

To work out if you’re getting a good deal:

  1. Multiply the monthly payments by the minimum contract term to give you the total cost over the duration of the contract
  2. Subtract the cost of the handset (refer to Apple’s website) from that total to give you the total cost of the airtime contract alone
  3. Divide the total cost of the airtime contract by the number of contracted months and compare to other mobile phone deals

It used to be the case the purchasing an iPhone in this way meant that the iPhone was locked to that particular network. Unlocking the phone require you to pay off the contract in full, either early or allowing it to run its course, and then paying an additional unlocking fee often around £20.

Without unlocking the iPhone, it would only ever work on that particular network thus limiting its attractiveness to prospective buyers if you came to sell it on.

3. On Finance

You can purchase a new iPhone on finance from Apple. In the UK, by way of example, you can do this through PayPal or Barclays:

  1. PayPal requires a minimum purchase of £99 spread over 6, 12, 18 or 24 equal monthly payments. The current interest rate is 17.9% APR
  2. Barclays requires a minimum purchase of £399 spread over 24, 36 or 48 equal monthly payments. Or you can choose an instalment period between three and 18 months. The current interest rate is 14.9% APR

Purchasing on finance is an expensive way to purchase an iPhone. More expensive than purchasing outright and, possibly, more expensive than buying the handset through a mobile phone provider.

An alternative would be a personal loan. Again, that is certainly more expensive than purchasing outright. You may consider a peer-to-peer lending service, such as Zopa, that offers interest rates as low as 3% though I’d recommend you think carefully before taking a loan for this purpose.

4. On the Apple iPhone Upgrade Programme

The Apple iPhone Upgrade Programme
The Apple iPhone Upgrade Programme

The Apple iPhone Upgrade Programme was introduced to allow people to purchase a new iPhone on a flexible upgrade plan.

It works a little bit like personal contract hire car-leasing plans, but for iPhones.

The Apple iPhone Upgrade Programme is a scheme that was introduced, in the United States, with the iPhones 6S and 6S Plus in September 2015. It followed in the United Kingdom and China when the iPhones 7 and 7 Plus were introduced in September 2016.

The scheme is an alternative to buying an iPhone on contract with a mobile provider. It is entirely separate from an airtime contract that you’ll take as a Pay-As-You-Go (PAYG) or SIM Only (SIMO) elsewhere.

By paying £69 upfront, and the balance over 20 months, you’ll be able to get the latest iPhone.

After 11 months, you’ll have the option to upgrade to the next latest iPhone. To do this, return the now old iPhone in good condition to take out a new upgrade plan.

You may upgrade at any time between 11 and 20 months, but you’ll have to return the existing iPhone. 

After 20 months, the iPhone is yours if you choose not to upgrade. 

Before entering into the iPhone Upgrade Programme, you should consider whether your the sort of person that wants the latest and greatest every year, to upgrade every other year or hold onto the iPhone for longer. 

The Upgrade Programme may benefit you if you’re going to Upgrade immediately every year or if you wish to spread the payments, interest free, over 20 months. Upgrade beyond 11 or 12 months and you’ll be handing back a capable iPhone rather than being able to pass it down through the family or sell it on.

You can read more about the upgrade program on Apple’s website

Further Considerations

In this tutorial, I have explained different ways of purchasing a new iPhone. In the next tutorial, I’ll explain some further considerations before you make a choice.