Want to buy a new phone but confused about what your options are? This article will explain a significant new option for mobile phone customers: phone financing.
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Hopefully this article will clarify things so next time you get excited about a new phone, you can get the best deal on a plan that you can understand.
As always, you can purchase your phone outright and unlocked; that has not changed.
Additionally, you can shop our great selection of mobile phones online or visit a Best Buy location to get your new device. Whether you are financing or setting up an unlocked device over the phone, our Blue Shirts can help you get the best monthly plan possible. And, of course, if you prefer to learn more in-person, you can talk to one of our knowledgeable Blue Shirt mobile advisors at your closest Best Buy location.
What’s happening in the mobile industry?
“Financing” is the buzz word.
The major Canadian mobile/wireless carriers are now offering what’s called device financing. TELUS, Bell, and Rogers already have this financing option in place.
How is it different from before?
Subsidy vs. Financing.
For years, phone carriers in Canada have offered mobile phones under what is known as subsidy. With subsidy, you often had to pay a chunk of money upfront for a new phone. This was essentially a down-payment on your phone and then the cost of paying off the device was built into your monthly plan. Unfortunately, looking at your phone bill, it wasn’t very clear how much of your monthly payment was actually going towards paying off your device and how much was going towards your data and usage.
How does financing work?
Financing is different.
With phone financing, carriers give you the option of spreading out the cost of your device over a 2-year term with 0% interest. So, financing takes the retail price of the phone and splits it up over 24 months. You would then pay 24 equal payments as part of your monthly wireless bill. For example, when financing a $600 phone, you would pay $75 each month for 24 months.
How does phone financing affect my phone plan?
The financing amount is added separately to your phone plan instead of being included. You will be charged 0% interest, and once the term is complete no longer pay for the phone.
As mentioned above, financing also means that you will be able to see the breakdown of exactly how much of your monthly payment is going towards your device and how much toward your mobile plan. Separate, detailed payment listings mean more clarity on your bill.
The other good news is that if you choose to keep your phone after your financing term is up, your monthly bill will go down substantially.
What do terms like Easy Payment and SmartPay mean?
Easy Payment, SmartPay, Rogers Financing, etc.…
Same thing, different name. As part of their specific branding, each carrier uses their own lingo to describe financing or subsidy. Telus uses the term Easy Payment; Bell calls it SmartPay; Rogers refers to it as Rogers Financing. Essentially, these plans are very similar, with slight differences on things such as upfront payments and taxes.
Are there any special conditions I should be aware of?
Device tax is structured differently depending on carrier.
The tax on your new phone (not the tax on your usage plan) is paid differently depending on the carrier. Rogers spreads the tax of the device out over your term (e.g., 24 months) while TELUS has structured their offers so the tax on the device is due upfront.
Is financing more expensive?
Data packages and promotions can keep prices down.
With the introduction of financing, carriers have launched more comprehensive plans with either larger data offers or unlimited data dollars. Promotional activity from carriers has remained just as it had been in the subsidy world, so there are ways to keep your monthly costs down.
How can I get make my payments lower?
Here are some ways to reduce your phone balance.
There are additional ways to keep your costs down. If you pay some of the cost of the phone upfront, you can reduce your monthly payments. Carriers often give you trade-in value for your old phone that can further discount the price. Also, carriers make certain promotions available from time-to-time. During activation, ask our friendly Blue Shirts on the phone or at the mobile department of your local Best Buy about any available promotions, so you can take advantage of extra savings.
Finally, another savings option is to sign up for leasing. This option enables you to pay for the use of a phone (you would not own the phone); after the term of the lease (e.g., two years) you would return the phone and upgrade to a new device.
What is Bring-It-Back, Device Return Option, and Upfront Edge?
Leasing options can further reduce your monthly payments.
For example, under a regular financing plan, if you chose a $600 phone that would mean a monthly payment of $25 over 24 months (For just your phone not including the usage plan). With TELUS’s Bring-It-Back program, for example, you would only pay $12.50 per month providing you return the phone at the end of the term in good working condition. So, when your term expires, you can upgrade to a new device or pay $300 to keep the phone. Again, each carrier has a different name for this (TELUS Bring-It-Back, Bell Device Return Option, Rogers Upfront Edge,).
Still have questions about phone financing?
There is a lot of information in this article, so you may still have questions. The main takeaway is that with financing your phone bill will be interest-free and more transparent—the amount of your bill going towards paying off your new phone is clearer. Your options for device ownership have evolved (beyond buying it outright at full price) and there are more ways to upgrade without necessarily taking on future costs. Lastly, your monthly bill could become more affordable if you agree to a leasing agreement or other special offers.
We hope this makes you feel better equipped, with enough knowledge to confidently purchase that new mobile device you’re after. Check out the latest phones, start your mobile activation from home, or visit your closest Best Buy location to get dialed in.