Do operators charge interest for handsets?

SirSnogALot

Does anyone know what mobile providers charge interest for handsets if you get them on a monthly contract?

They don't tell you what the underlying contract cost is, but trying to work out from Vodafone website, there isn't an exact tariff match but very closer, see example:-

Iphone 8 – 64gb, on apples website for £599 brand new (incidentally available with 12 months 0% finance).

Vodafone - Red entertainment bundle #1

25GB data, unlimited calls/texts, 24 month sub to Spotify/tv etc (worth £10), £29 upfront and then 24 payments of £57

Sim only deal (12 months), almost same (but 5gb less data). 20GB data, unlimited calls/texts, 24 month sub to Spotify/tv etc, £20 PCM

If we assumed the underlying cost of the contract above without the phone was the same £20 (might be slightly more for the extra 5gb data). That would mean the cost of the phone is £37 PCM plus £29 deposit. £37 x 24 = £888 and with the deposit is £917, for a £599 handset (and I assume they get them cheaper as a bulk purchaser). That's a £318 mark up.

I calculate that as an equivalent APR of 55%

SirSnogALot

tempus_fugit

Nearer 26% surely as it is over two years. APR is ANNUAL percentage rate.

Takmon

SirSnogALot wrote: »

Does anyone know what mobile providers charge interest for handsets if you get them on a monthly contract?

I'm not sure why you want to calculate it as interest, i would just class them as pricing the phone a lot higher than if you bought it from elsewhere.
Unless your saying that across a range of phones and contracts they offer the calculations show a consistent percentage of "interest"? which would be quite interesting.

When looking at some contracts recently i have also found that they are more expensive than if you buy the phone and network plan separate. The last time i checked this a few years ago it was the other way round and was cheaper to buy the phone with the contract. But this could have just been unique to the specific plans i looked at.

Jon_01

This doesn't take into account the fact the you'll pay less for the handset/plan on a retention deal. And that the networks change more for a new handset in the first month of release as early adopters will 'just have to have it'...

SirSnogALot

tempus_fugit wrote: »

Nearer 26% surely as it is over two years. APR is ANNUAL percentage rate.

Ahh, yes, you're quite right.

Still very high though, no?

SirSnogALot

I've just bought a nearly new handset from Argos with a years warranty, 256GB iPhone 8 for £418. they had a 64gb one for £356.

So will just get a sim only deal for c£15.

Even buying a brand new handset from Apple direct on interest free would be better.

SirSnogALot

Jon_01 wrote: »

This doesn't take into account the fact the you'll pay less for the handset/plan on a retention deal. And that the networks change more for a new handset in the first month of release as early adopters will 'just have to have it'...

Not quite sure what you mean?

I contacted Vodafone they initially offered me the same deal as website, I then waited a whole 2 hours on the web chat for them to offer me £2.25 off a month as an existing client!

Still a terrible deal.

Cisco001

I don't know what you want to achieve.

No one will pay £57 per month for iphone 8 when you can gen iphone XS cheaper than that!

And if you want iphone 8, there are plan for £33 per month with 30GB data on EE network.

Cisco001

SirSnogALot wrote: »

Not quite sure what you mean?

I contacted Vodafone they initially offered me the same deal as website, I then waited a whole 2 hours on the web chat for them to offer me £2.25 off a month as an existing client!

Still a terrible deal.

Ask for PAC and move.