Leasing a phone is a useful alternative to ownership

leasing phone options

iPhones and higher end Androids like the Galaxy range, costing upwards of $1,000 each, (that’s without insurance in case you lose or break it) are quite a costly investment just to be able to do your talking, texting and browsing. There are two other options available in Australia. One is leasing from a phone provider and the other is leasing from a private rental company. If you operate a business you can take advantage of Telstra’s My Business Mobile Lease Plan which ties you to a 24 month commitment or if you want more flexibility there is a company called Flexiway.

If you run a business, small or large, Telstra has caught up with other countries by offering a lease opportunity if you sign up to the My Business Mobile Lease Plan. The main point of leasing is that you never actually own the phone, but it’s easy to upgrade it regularly, as long as it’s not damaged. Telstra’s lease plan is for 24 months and even though you never get to own your own phone, you can keep upgrading every 12 months for just $99, as long as you sign up to a new 24 month plan.

Leasing is a good choice if you want a new, most up-to-date, iPhone or Android, but aren’t worried about being the owner. With Telstra, it costs $10 per month less than some of the company’s My Business Mobile plans and handset combinations. The only real hitch is if you have done some damage to your phone in some way like a faded or cracked screen. In order to be eligible for the 12 month upgrade it will cost $229 and if the damage done is not possible to repair, the upgrade will cost $499.

Of course, you could always take out an insurance policy for an additional $10 per month, which would allow you to upgrade a damaged phone at any time. An extra $190 paid at the start of a new 24 month plan service and handset plan is another option that guarantees you can upgrade a damaged phone at any time.

Compare the savings if you lease a phone with a plan

The dollars you pay out to lease the handset are dependent on the plan you choose and the handset you would like. For example:

An iPhone 7 Plus starts from $90per month, which includes $55 for the plan component and $35 per month for the leasing of the phone. This is for a term of 24 months and costs $2,160. If you prefer a Samsung GalaxyS7 it will cost $74 per month, which includes $55 for the plan and $19 for the lease of the phone.

When you sign up to one of Telstra’s lease deals you will sign a lease device contract with your service plan. You will never own the phone. There are various conditions to leasing that need to be considered before going for this option.

Flexiway offers phone leasing through Good Guys, Leading Edge computers and Bing Lee

Flexiway is a rental company which is offering a far more flexible deal then Telstra if you don’t want to go to the expense or financial commitment or don’t have the cash to buy your own smart phone. Its marketing tactics target those people who want to be seen with the most up-to-date iPhone or Android without the expense of buying outright or joining a telco on a long-term plan with the expectation that ownership of the phone would take effect after the plan period comes to an end.

Flexiway offers this deal through 3 main retailers which are Leading Edge Computers, Bing Lee and the Good Guys. The sorts of phones available to lease/rent are from leading phone manufacturers including Samsung, Apple, Motorola, HTC, Windows and LG.

Estimate for leasing a Samsung Galaxy S5 phone

This phone normally retails for $888. With a leasing agreement over 2 years it could cost as little as $13.65 weekly. The total amount payable would be $1,419. This amount is based on paying monthly. You don’t have to worry about theft, loss or accidental damage as Flexiway offers its FlexiCare programme which covers all that in both Australia and New Zealand and for other world trips not exceeding 28 days. If you become unemployed, disabled or sick, Flexiway will put your lease agreement on hold as required.

Obligations under Flexiway lease agreements

  • If you lose your phone to a thief you are required to inform the police in your area within 2 days of the incident.
  • If your phone breaks down and Flexiway cannot repair or replace it you might not have to pay any further payments.
  • Flexiway may turn down any request for a repair or a replacement if you have no fixed address.

The Good Guys leasing arrangement using Flexiway

  • No cash is required upfront.
  • A single monthly fixed rental payment with offered. 12, 24 or 36 monthly terms.
  • A range of flexible End of Term options to choose from.
  • Option to upgrade.
  • Option to upgrade for protection against theft, accidental loss or damage.
  • Up to 100% taxation deductible+ for businesses.

Advantages of leasing

With so many Mobile Virtual Network Operators entering the call, text and data market there are a lot of good deals available for both prepay and post paid options if you have your own phone, even the bigger telcos are offering BYO options. As long as you’ve got a phone you can switch operators whenever you like without tying yourself down to a long-term plan. You may go overseas a lot, so much of a plan would be lost if you are not in Australia to use it.

Summary

Whatever your reasons for wanting a more flexible phone ownership, leasing is an option you could consider. The Australia Securities and Investment Commission (ASIC) does say that a problem with leasing is that the monthly rental payments appear low, but they do add up over a long period of time. ASIC’s website suggests that you could end up paying 5 times more than the actual original cost of the device.

 

Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.