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iPhone 6: Should you wait, get a new contract now or go SIM-only?

You’re nearing the end of your contract, waiting for an iPhone 6, New iPhone, iPhone 5S or whatever it ends up being called. You’re also in two minds, should you even be waiting? Do you really want to sign your life away all over again to another iPhone when there are incredible phones out right now, such as the HTC One, the Sony Xperia Z and Google’s Nexus 4?

If you’re anything like us you’ll want to wait until the iPhone 6 is announced before committing to a two-year contract. Only then will all the techy cards be on the table for you to make a truly informed decision. 

But what if you need a phone now? What are your options and which option is right for you?

iPhone 6? New contract? SIM-only or Interest Free?

Waiting for an iPhone 6 – Your options:

  1. You could buy a flagship phone on contract. This is a low upfront commitment, but you’ll be locked down for no less than two years if you want one of the higher end models. You’ll also need a credit rating which may rule some people out.
  2. Alternatively, you could buy a phone offline, get a pay as you go SIM card, or a SIM-only plan from the likes of giffgaff. The up front cost of the phone is initially expensive, but this option is as commitment free as you’re going to get and could save you money down the line, especially if you end up having a phone for longer than 24 months. 
  3. If you don’t have a £400+ lump sum to spend though, the final option is slightly unconventional and slightly brilliant all at the same time. It involves an interest free payment plan and is offered here in the UK by Expansys.

Option 1: Get a phone on contract

Sim-Only imageThe traditional way to get a phone now is by signing up for a 24 month contract. This is probably the easiest to do provided you have a decent credit rating. What makes it easy? You have your monthly bill, included is a monthly usage allowance and you get a phone without having to pay a hefty upfront cost.

If you’re thinking about a flagship phone like the HTC One, Samsung Galaxy S4 or the Sony Xperia Z, you’ll be looking to pay around £30 – £40 per month. This monthly cost covers two things – your monthly minutes, messages and data, as well as the cost of the phone itself.

Chances are, when you sign up, you’ll also have to pay a one off fee of about £30 for your shiny new flagship. All in all, it’s looking like an outlay of around £850 to £1000 for the duration of your 24 month contract.

Sound like a lot? That’s because it is.

What’s more, if you’re thinking about getting the latest iPhone when it arrives, you can easily expect to add another couple of hundred pounds onto that figure.

You can get your phone on contract either in-store or online with major networks such as EE, O2, Orange, T-Mobile, Three and Vodafone. Shops like Carphone Warehouse and Phones4U also often have more leeway with handset choices and tariffs. Finally, you can opt for an online shop if you want to exhaust all your options, a couple of these include Mobiles.co.uk and BuyMobilePhones.net.

Option 2: Pay as you go and SIM only

GiffgaffAlternatively, you could opt for a pay as you go, or SIM-only option. 

Historically, pay as you go has entailed walking into an O2, Orange, Vodafone or Three store, perusing over a range of budget handsets, picking one for between £20 and £100 and giving it to your teenage son or daughter.

Nowadays, more and more people across the board are buying high-end handsets offline, getting their SIM cards from shops like those mentioned, or getting SIM-only plans from the likes of giffgaff. 

Pay as you go and SIM-only options are special as they’re ultimately commitment free ways of getting connected. 

The first mentioned, pay as you go requires you to simply top up a SIM card with some money. Once you use up your allowance, you can’t use the phone until you top it up again, and so on. It’s a safe way of avoiding nasty surprises in a monthly bill, though can end up costing more if you’re a heavy data and voice user.

The second option, SIM-only involves a monthly rate that you can cancel at any time, entitling you to a quota of minutes, messages and data. If you go with giffgaff for example, one tariff, or goody bag as giffgaff calls them includes 400 minutes, unlimited mobile internet and unlimited texts, enough for most people, and all for just £15 per month.

Over 24 months, this works out to £360, around £500 – £650 less than a 24-month contract with an Android flagship like the Samsung Galaxy S4 or HTC One. If you’re thinking about the iPhone 6, if that’s what it ends up being called, you’ll probably be looking at a saving of over £650 – £800 by going SIM-only.

This saving would go towards the cost of a handset, so if you can find a new phone for less than the difference, can’t stand commitment or are happy with the phone you’re using, SIM-only options make perfect sense.

Option 3: Interest free phones

Expansys Interest Free phonesThe third, final and most innovative option we’ve seen comes from the guys over at Expansys – interest free phones.

We’ve heard about interest free deals on washing machines, computers, cars, even cameras. All these are offset against credit that’s paid off over time – why not do the same with phones?

They can cost the best part of a grand, people rely on them and they’ve converged to replace many of the aforementioned.

With the offer in its early stages, Expansys’s interest free credit is available across nine phones and one tablet. None of these are the very latest, but many quad-core beasts with ample pixels and impressive spec-sheets. 

How does it work? When you sign up, you pay 20% of the handset cost up front, then the remainder is split over ten months. 

Couple that with a SIM only deal like the giffgaff goodybag outlined prior, and you’re looking at a considerably shorter commitment to a handset than traditional means would permit.

Now if we’re actually talking costs here, a Samsung Galaxy S3 is available for £400 offline. Getting it at Expansys with interest free credit would set you back 20%, £80 up front. This coupled with a 10%, £32 charge for the first month means in month one you’ll be paying £112 in total.

A large initial outlay? Maybe; but it’s significantly less than £400. 

For the next nine months, you can expect to pay £32 per month and then you’re free. Even before that though, any time after you receive the phone, you can sell and upgrade, commit to a new contract or simply carry on enjoying the reduced rate your SIM-only deal affords you.

If this sounds right for you, you can find out more at Expansys.com/finance.

What would we do?

If you’re waiting for the next iPhone and want to buy it on the day it launches, odds are, you’re going to carry on waiting, and rightly so. Only when it lands will you be able to decide if it’s worth being your next smartphone.

If you’re an iGal, iGuy or iPerson who doesn’t need to be on the cutting edge and is happy to wait for the contract price of the iPhone 6 to drop, likely around winter, it might be worth biding your time with another phone for, say, eight to ten months.

Consider a Samsung Galaxy S3 or HTC One X+ from Expansys on interest free credit for example. Less initial outlay than an all-out purchase, a shiny new smartphone and the option to sell up anytime.

Coupled with a giffgaff SIM card, you’ll have everything you need to take full advantage of your smartphone with hardly any commitment. 

Finally, if you’ve decided it’s time for a change – the iPhone 6 isn’t for you and another phone is now the apple of your eye, perhaps it’s time to take the plunge on a new contract. You can get a newer phone than Expansys offers on interest free credit, such as the HTC One or Sony Xperia Z.

While this will tie you down to a 24 month commitment, it also means you only pay one party – your network – and you can spread the cost out pretty evenly over two years.

Which option is the right choice for you? Only you can decide. We can say this for sure though: gone are the days of smartphone wars being a one horse race, there are more mind-blowing smartphones available and en-route than ever before and many more ways to buy them.

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