This Calculator Shows You Whether It’s Best To Buy A Phone Outright Or Lease It

This Calculator Shows You Whether It’s Best To Buy A Phone Outright Or Lease It
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Buying a phone outright using beats getting a “discount” with a contract. Of course, that might depend on the carrier and the phone plan. This calculator tells you how much cheaper it is, over time, to buy the phone outright or lease it.

WalletHub’s Cell Phone Calculator crunches the numbers to tell you which is the better option — buying the phone outright or leasing it via contract. You enter both options and the tool tells you the total cost over a two-year period. This calculation is based on net present value, the changing value of the phone over time and it also assumes a five per cent annual discount.

In most cases, you’ll find that buying outright is the more frugal option in the long run, but it’s still interesting to see how much the cost varies.

Try the tool out for yourself at the link below.

Call Phone Calculator [WalletHub]


  • That’s pretty handy! A PAYG option would be good as they’re usually 28 days not 1 month, meaning 26 payments in a 24 month period.

    • The magic function in excel is present value – PV. It looks like that calculator is doing something like:
      With the rate being around 5%pa.

      If you want to compare that to PAYG, change those 24s to 26s.

      Before someone needs to correct me on the internets: That change will result in a number slightly higher because you’re compounding a value over 26 periods instead of 24 periods. (1+0.05/24)^24=1.051216; (1+0.05/26)^26=1.051221. Not much of a difference.

  • Also doesn’t take into account bundled discounts. For example, home broadband + mobile service on the same bill with Optus nets a discount each month.

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