Mobile phones: How to buy
PAYG or contract?
Once you’ve chosen which handset you want to buy, you then need to decide whether you’d prefer to sign up for a monthly contract or just want to pay as you go (PAYG). This decision will have a serious effect on the cost of your new phone.
If you take out a 12 or 18-month contract your phone will be heavily subsidised by the service provider, and may even be provided free of charge. However if you choose to pay as you go, the phone will only be slightly subsidised and so is likely to cost at least £40 for a basic model. The choice of handsets available on PAYG tariffs can also be limited and call charges tend to be higher than with contract tariffs.
However its worth baring in mind that being tied in to a long-term contract can be expensive. If you don’t spend much time on you phone, and hence your monthly costs are fairly low (under approximately £20), then a PAYG tariff is likely to be the better option.
Buying outright
If you already own a phone then a third possibility is to buy a new handset outright to use with your existing Sim card. These phones won't be subsidised, but are a viable option if your current contract is very cheap and you don't want to change deals (to something more expensive) just to get a new handset.
Tariff and network
There are a huge range of different tariffs available and it can be difficult deciding which one to choose. However its important that you spend some time thinking about this as selecting the wrong one can be an expensive mistake, especially if you are tied to it for 18 months.
It’s a good idea to work out how much you use, or think you will use, your phone on average each month - if available, you can look at your last few bills as a guide. If you want a pay monthly contract, you can then search for a deal that includes free minutes and texts close to your average usage.
And if you’re interested in a PAYG tariff then look for one that offers low price calls when you need them, such as in the evenings or at weekends.
Different network providers such as Orange and Vodafone all offer their own tariffs. But your choice shouldn’t just depend on price – customer service is very important. See how each network provider did in our regular customer satisfaction survey.
Where to buy
Whichever phone and tariff you choose, its worth shopping around for the best deal, both directly with mobile operators and with third party suppliers like Phones4U, Dial a Phone and Carphone Warehouse. Check online too as you may get slightly different offers or more minutes/texts for your money, although its always a good idea to see a phone in person before ordering it.
Renewing
If you fancy a new mobile phone you don’t necessarily have to buy a new one from a different provider. If you’re on a contract and its running out you can ask your existing provider to upgrade your handset (although this won't necessarily be free).
Alternatively if you're happy with your handset, you could consider moving to a Sim-only or PAYG deal (you might have to pay to unlock your phone for use with another provider’s Sim card).
And don’t just take the first phone your provider offers – if you play your cards right and are prepared to haggle, you’ve got a better chance of getting the handset you want.
Find out which phones are free for new customers – use brochures and search online.
Ask your current provider what handset deals it can offer you.
Phone insurance
Mobile phone insurance can be an expensive drain on your wallet. Cover usually costs around £6 a month, which may sound reasonable, but that’s £108 over an 18-month contract.
As with an extended warranty, you may end up paying almost as much as the cost of the original product. There are also exclusions on many policies, which mean that there’s no guarantee they’ll pay out if anything goes wrong. Even if they do, you may have to pay an excess.
Instead check if you’re covered by your household contents insurance. If not, and the worst happens, most people have spare old phones they could use or you could pick up a cheap replacement model.