Financial literacy

Should you rent, buy, or lease a phone?

A few years ago, if you wanted a new phone, the only way to get one was to buy it. Now, there are other methods like leasing and renting, which give you more options.

Lots of telephone companies, in trying to make mobile device ownership easier for their customers, are implementing these new methods that are more flexible. From allowing monthly installment payments to leasing the mobile device for a while, the options are increasing. Why pay so much money to buy a mobile device, when you might want to change it in a few months? On the other hand, why spend so much to lease a phone, when you could just buy and resell it?

With this, let us look at leasing a phone vs buying one.

Until recently, the go-to method for purchasing a phone was the free contract method. Here, users could get locked into a contract of about 24 months, where they gradually paid for the device, after which they completely owned it. This basically means that they buy the device on credit.

However, with newer methods like leasing coming into the market, a lot of people are starting to drift to this option.

Methods of acquiring a phone

So, there are three main methods of acquiring a mobile device. They include:

  1. Full purchase;
  2. Installment payment;
  3. Leasing.

Let us consider the pros and cons of these three methods:

Full purchase:

Pros:

  • You do not have to worry about a hike in price subsequently.
  • There is this peace of mind that comes with buying a cellphone without a contract, and making a one-time payment will exempt you from debts.

Cons:

  • Prices of new mobile devices are currently breaking the bank.
  • The discounts attached to this method are not very much.

Installment payments:

Pros:

  • The payments in installments help you manage your money more without breaking your bank.
  • There are a lot of deals and discounts with this method.
  • Installment payments are usually interest-free.

Cons:

  • This will be an addition to your monthly bills.
  • Carriers cannot be switched until the full payment is made.

Leasing:

Pros:

  • This is the cheapest method of the three.
  • You have the liberty to upgrade regularly.
  • There are lots of deals and discounts on this method as well.

Cons:

  • The device will no longer be yours at the end of the lease period unless a buyout price is paid.

The major difference between leasing a mobile device and purchasing one is the pricing. While leasing will cost you less in the long run, you must remember that phones can get very personal. People get attached to their devices after a while, and you cannot form a bond with a leased device since it will not be yours at the end of the deal.

Why do people prefer buying a phone?

Some people love the idea of exclusive ownership of a property. There is this certain sense of security that comes with buying, unboxing, and using a mobile device exclusively. People like this will prefer buying a device to a lease. Also, it is only this option that allows you to unlock the device with any compatible network of your choice. Then of course, there is the peace of mind that comes with knowing that you have completely paid for a property and can take full advantage of it.

Why do people rent a phone?

Most times, renting is done on a short-term basis. People mostly rent a phone when they travel because some devices are restricted to their carriers. This can be solved with data roaming, but most people will prefer renting for the period they are in a new location.

What kind of people is better off with a leased phone?

If you see yourself wanting the next version of a device the moment it launches, then leasing might be the best option for you to consider. Getting a lease will help you save a few hundred dollars on your next purchase.

Note that you can always buy the device at the end of the lease if you like the idea of keeping it, by simply paying a buyout fee. This will obviously cost more than it would have to make a one-time purchase or a monthly installment.

What is the right choice to make?

The decision to lease, rent or buy a phone is dependent on the user based on preference and other factors. You should consider your finance, your level of flexibility, and your reaction towards mobile devices before making this decision.

If you find that you are always eager to get the latest devices, leasing will be the perfect option for you.

However, if you would rather have full ownership of your mobile device at once, then you should consider purchasing it completely. All you need to do is consider the pros and cons and make the best decision for your situation.

Several companies are in this business, and they offer a lot of attractive deals to facilitate the leasing process. They also have numerous rent to own smartphones. After making your decision, you can find a reliable company and get a suitable deal.

Back to the list of blog posts Go to PocketGuard