More and more people are leasing their smartphones instead of buying them. Instead of shelling out big bucks up front, you can simply sign a deal and pay a low monthly payment to use your device for as long as you need it. Some carriers even let you change your phone as many as three times a year.
But is leasing as opposed to buying a smart decision?
If you like to upgrade your phone frequently, it probably is.
However, there are some basic things you should be aware of before taking the plunge.
- If you lease the phone, you do not own it. At the end of the contract, you will need to return the phone, buy it from the vendor or upgrade to an alternative device.
- Leasing allows you to have the latest phone. If you’re the type of person who likes to have the latest mobile phones every year, leasing makes perfect sense. Look out for contracts that will allow you to upgrade your phone on a regular basis.
- Early upgrades may be available on standard contracts. In some cases, you may be able to upgrade your phone early on standard contracts providing you pay off any balance that is due on the device. As such, leasing isn’t necessarily the only way of keeping abreast of new phone releases.
- Leasing is cheaper than paying for a phone on an installment plan. You can reduce your monthly outlay if you lease as opposed to buying.
- If upgrading your phone on a regular basis doesn’t bother you, you could be better off on a standard phone contract.
- You’ll need to check the small print. Leasing contracts can be complex and it can be hard to figure out what is, and is not, included. Make sure you read the fine print carefully so that you don’t get caught out.
What’s the difference between leasing and standard equipment installment plans (EIP)?
While they both involve making a monthly payment over a fixed term, when you sign an EIP you own the phone at the end of the contract; when you sign a lease, you need to renew the contract or return the phone.
The biggest advantage of leasing versus an EIP is that you can have the latest phone for a low monthly payment. With an EIP, you are pretty much stuck with the same phone until you decide to upgrade and, thereby, start a new contract.