Smart phones and tariffs come up in conversation now and again, especially when there's a new, big name phone coming out. The Samsung Galaxy S5 is due out soon, and it's out to compete against the current Apple iPhone 5s.
Someone recently asked me what phone I have and how much I pay each month. Whenever anyone asks me how much my Smart phone contract is, they're usually shocked with how low it is, and ask how I got that deal. I currently pay £8 a month for my contract for my phone.
I decided to buy the handset outright and then buy a separate 'Sim only' deal as they were the best value option at the time for having a guaranteed amount of internet usage, call time and texts.
If I were to add the price of the phone (Samsung Galaxy S2 with 16GB storage) and the tariffs for the first 27 months, it would work out at £388.44 in total, which is £14.39 per month.
At the time of buying the phone (November 2011) there were so many different tariffs out there, but I made a note of 2 which stood out at the time as more competitive, and they're still being used for phones today:
- Pay £249 for the handset (same make and storage as mine), and then £21.99 each month for 24 months.
- Have the handset for free, and pay £35 per month for 24 months.
From looking at those two options, which one would you go for?
Without doing the maths, I thought the second one looked more appealing. Actually, the top one would set you back £776.76 over 24 months, whilst the second one would cost £840.
I think a lot of people fall into this trap as they are put off by the initial payment for the handset, but they end up paying £63 more over 24 months.
I wanted to share with you all how I got the same, brand new handset and storage space, for an additional 3 months (27 months), and paid just half the total price = £388.44.
Rundown of costs and cashback
- In November 2011, I bought the handset on Ebay for £288.
- I then signed up for a 12 month 'Sim only' deal which cost me £7.72 per month.
- After the 12 months, the tariff increased to £10 per month, I paid this for 2 months.
- I then signed up to another 12 month 'Sim only' tariff in February 2013. This cost £8.34 per month.
- I signed up to another 12 month 'Sim only' tariff in February 2014, and I currently pay £8 per month.
For those of you that are Math whizzes, you'll be aware that the figures above don't match the total figure I stated earlier at £388.44....... and you'd be right! I received cashback for all of these transactions via Topcashback.co.uk (TCB).
Back in November 2011, TCB used to pay 60% of the Ebay sellers fees to you. I paid £288 for the phone and received £17.28 cash back for it. (Note - Unfortunately they stopped paying out on Ebay purchases in Feb 2013. Gutted!)
The 12 month 'Sim only' contracts back then had great cashback offers as well. I was given £50 cashback for signing up to a £7.72 per month contact.
In February 2013, I bought another 12 month 'Sim only' contract. TCB paid me £45 cashback for a £8.34 a month contract.
In February 2014, I bought another 12 month 'Sim only' contract. TCB paid me £30 cashback for it. Although the cashback isn't quite as high as it once was, there's still a nice amount to be had.
I plan on using my phone until it no longer works, before I look at getting another phone. For me a smart phone is a luxury, and as long as I'm able to use the internet on it, make calls and text, I'm happy!
Low Price Smart Phone Handsets
There was a little bit more work involved with getting the smart phone price at such a low rate. In November 2011, most brand new Samsung Galaxy S2 handsets could be bought between £350-£400.
This is the method I used for purchasing the same handset for £288.
It's not difficult to do, it can take a little bit of time, but the end results are worth it in my opinion.
Selecting the right handset
First step is to establish which phone you want. If you already know which model you want, move onto the next stage.
I tend to speak to my friends, family or colleagues and see what they have. Ask them how they've found it and would they recommend it? Ask if you can take a look and play around with it a little bit. I find that most people will be really honest with you as they know you, and if they recommend anything to you they're more likely to be honest with you than a sales person. Not that I have anything against sales people (as I am one!). A family member or friend will have your full interest at heart, they aren't making anything from it. They're likely to only recommend it if they're happy with the phone. A sales person, might attempt to influence your decision in a certain way if they get more commission for you selecting a specific one.
I would still recommend using a high street shop for gaining information on a phone. I usually ask them for factual information on the phone and then follow that up by asking what that means in 'real' terms or compared to another phone. For example, what's the difference between 16gb and 32gb storage? Will I need it? What do most average users go for? (that type of thing)
I'm fortunate that a friend of mine is a bit of a 'tech geek', and before I decided to buy a smart phone, he had recently researched all the new smart phones models to establish which was the best one. He had also owned the two I had my eye on - The iPhone and Samsung Galaxy.
As he knew me well, he told me categorically that the Samsung was the right choice for me, as it offered everything the iPhone did, but at a lower rate. Also, I wouldn't be restricted to using Apple only products. He said the Android models had more flexibility, and you could personalise them more than an iPhone. After I tried his phone out, I was sold!
Selecting a service provider
Once you've pinned down the smart phone you're interested in, you can decide which service provider you want to go with.
You might already have years of experience with your current provider and be happy with the phone's reception and the companies customer service. If so, you can move onto the next step. If not, shop around, make sure you check the phones reception for the areas you plan on using it in as well.
Are there any extra's you're interested in having with a particular company? For example, 'Orange Wednesdays' with 2 for 1 cinema tickets.
I decided to go with T Mobile at the time, as they had the joint highest cashback for a 12 month 'Sim only' deal (£50), and they had the lowest tariff out on the market (£7.72 per month). The reception where I live is poor on all service providers. That's living in the countryside for you!
Always check a cashback website! It doesn't matter which one you use (Topcashback, Quidco or any other), but just remember to check. Mobile phone tariffs are usually featured quite high in the payouts for these sites.
Why select a Service Provider before buying the phone?
I'm currently with EE (T-Mobile are now part of this company). As I mentioned earlier, I decided to go with T mobile as a service provider before buying the handset. I made this decision as I wanted to narrow down the competition on Ebay. When buying a phone on Ebay you'll see that 'unlocked' phones (where you can use ANY service provider) are higher in price than 'locked' phones (where you have to use a SPECIFIC service provider). The 'locked' phones have a smaller customer base due to their limited choice, and these are almost always cheaper than the 'locked' option for exactly the same phone.
It's time for Ebay
Now we can get to the exciting bit......Buying the handset you want at a low price!
I've just gone onto Ebay now, and searched for the Samsung Galaxy S4 so I can use a real example.
I found that you can buy the Samsung Galaxy S4, with 16GB storage capacity, brand new, for £275 including postage with the 'But it Now' (BIN) function. I use the 'BIN' price as a bench mark to start my search.
Once I have an idea of the lowest 'BIN' price, I then tick the 'completed listings' box which is in the filtering options on the left hand side. It's under the category 'Show only'. Here you can see what prices previous Ebay listings sold for or didn't sell for. They mark the price in Green if it sold or Red if it didn't. I make a note of the the lowest prices it recently sold for. Most of lowest selling prices are sold in an 'auction' style, with people bidding on them.
I checked the 'completed listings' and I found a Galaxy S4, 16GB storage, with the provider EE for £220, the next lowest price was £230.
I now know it's worth holding out for an auction style item rather than a BIN on Ebay, as I can save around £40 to £50 by buying it that way.
Now you can untick 'competed listings' and go back into the regular Ebay search and find a phone and seller you're happy with.
Make sure you check the sellers feedback, and ensure it's 100% positive. Preferably, they've sold this item numerous times before with positive feedback.
Do they have a manufacturers guarantee? Are you happy to proceed if they don't?
I've found the a great Phone/Seller, Now what?
If you have a Smart phone already, I would suggest using the Ebay bid sniper app - 'myibidder Auction'. I talk about this app in a previous post Ebay for additional income and frugal living. It's under the section, 'Increase your chances of being the highest bidder on Ebay'.
If you don't have a smart phone and therefore don't have apps, then not to worry. I would suggest bidding on the item within the last 20-30 seconds of the auction (don't leave it too late!). Bid with the top price you're prepared to pay and leave it! So, in the example above we've found that the Galaxy S4 has sold for £220 and £230. You might decide to pay no more than £230. You can bid for £230 and see if you're the highest bidder at the end of the auction. If you aren't, it's because someone has bid more than your top valuation. You can now be satisfied with not getting the item as it no longer represents 'good value' to you.
If you have the Ebay sniper app, then you follow the same process, but you're able to bid well in advance, knowing your bid will only register 5 seconds before the auction ends. I think this app is brilliant for 3 main reasons:
- It prevents people outbidding me before the auction ends.
- It helps me keep to my top end valuation.
- I can enter my top end valuation, then forget about the whole auction process and get on with my life.
.........and finally! Putting it all together
Once you have your phone and your sim card, your work is done. Have fun and enjoy your phone!
This post was quite lengthy, so if you're still here, thank you for staying with me.
This was my approach and it worked for me. I see no reason why others can't benefit from it to. You might very well have your own system in place that allows you to benefit from a better deal than what I've suggested. If so, please share your thoughts. I'd really like to hear what you do.
If you haven't done anything like this before and you care to try out some of things I did, please let me know how you get on.
Thank you all once again for reading, and I wish you all luck on finding the best smart phone deals out there!
Labels: Frugal Living, Strategy