In Australia, there are two main options for getting a mobile phone:
These days, buying a phone on a plan won't lock you into a contract as it used to. However, if you leave before completing your committed term, you'll need to pay off the remaining cost of the phone.
In some cases, the discounts you get from telcos are tied to staying with them for a specific period. If you cancel early, you'll have to cover the remaining balance on the phone and lose the discount.
"For as long as I can remember, I have been buying my iPhones as part of a phone plan. Yes, it ends up being a bit more expensive in the long run but it's a cost I'm willing to cop for the convenience and immediate affordability that paying monthly allows me. Maybe one day I'll change tact but realistically, iPhones aren't getting any cheaper and parting with a small monthly amount is so much more palatable to me than parting with a few thousand dollars in one go. It's an expense I'm happy to make because I reap the value of it every day."
Here's a quick look at the pros and cons before we give you our final verdict:
Choosing between buying outright or on a plan really depends on your situation.
If you're okay with paying upfront, buying outright is usually cheaper.
But if you'd rather avoid a big upfront cost - especially for a premium phone that could set you back over $2,000 - paying in instalments might be easier.
Opting for a shorter plan, like 12 months, can save you money compared to a 36-month term.
Just keep in mind that telcos often don't offer discounts, bonus trade-in credits, or gifts with their 12-month repayment plans.
To get these perks, you might need to commit to a 24- or 36-month plan instead.
Most of the time no, it's not cheaper to get a phone on a plan.
Let's break down the numbers to show why getting a phone on a plan might cost more in the long run.
We'll keep this example evergreen by skipping over temporary discounts and other promotions.
For the sake of this example, let's assume you're eyeing the Samsung Galaxy S24 Ultra (256GB model) from Telstra.
And you're pairing it with its cheapest SIM-only plan which is $65 a month for 50GB.
Here's a look at the cost breakdown between buying it outright and pairing it with the cheapest SIM-only plan from Belong (25GB for $30 a month), which runs on Telstra's wholesale network.
Phone RRP = $2,199
12-month cost = $2,976
24-month cost = $3,768
36-month cost = $4,536
Phone RRP = $2,199
12-month cost = $2,559
24-month cost = $2,919
36-month cost = $4,536
Good to know: Vodafone often turns out to be the cheapest option, followed by Optus and Telstra. However, Vodafone's coverage might not be ideal for those in rural or regional areas. Always check network coverage for your address on the provider's website before signing up to a phone plan.
According to Finder's Consumer Sentiment Tracker, more than two-thirds (69%) of Aussies upgrade their phone due to performance issues. 15% felt their phone was too slow, 12% experienced total death of their battery and a further 12% said their battery life was poor.
Other reasons included their contract coming to an end (8%), seeing a new phone they liked (7%), being offered a new phone by their telco (6%), getting a hand-me-down (5%) and losing a phone (2%).
If you decide to buy a phone outright by the end of this guide, don't forget to snag a great deal on a SIM-only plan to go with your upgrade.
Check out our table of plans to get you started.
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