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With e-waste reaching record heights every year and being aware of the fact that 62 million metric tonnes were generated in 2022 is enough to rethink how we buy, use and dispose of smartphones. There's an urgent need to keep personal electronics in circulation to reduce the demand for Earth's finite resources. While phones as subscription services isn't a thing yet, there are companies that you can rent a phone from. While from environmental standpoint there are claims made we can agree with, we want to find out whether financially this smartphone consumption model is better or worse of. So to ease off your decision making we compared the costs involved with owning a phone through rental, buying on a contract or purchasing outright.
Phone rentals are a relatively new concept in the UK, however retailers offering rent-a-phone service are springing up left, right and centre. In its nature renting a phone is similar to a lease where you pay monthly to use a brand new or a refurbished phone. Rental periods vary depending on the retailer, but the majority offer monthly rolling, 12, 24 and 36 months. At the end of a rental period you can either:
1) Return the phone to the retailer and upgrade to a newer model
2) Carry on renting it and paying the monthly charges.
If you choose to upgrade, you will need to return the phone you've been renting in the condition you first got it. Unfortunately, companies such as Raylo do not give you the option to purchase the device once the rental period ended and Ooodles now only offers their mobile phone rental service to businesses.
The price of a phone rental will depend on which model you'd like to rent and for how long. Monthly payments for 3 - 6 months rentals can be as high as £60 with Raylo, whereas 24 - 36 months long phone rental can cost in the region of £30 per month. While monthly payments for a phone rental in comparison to having it on a contract with a network might seem lower, you shouldn't forget that phone rentals don't include any SIM plans. So this is going to be an additional cost on top of your monthly charges for renting a phone to be able to actually use it.
At Compare and Recycle, we're all about comparing available options, and we decided to break down total costs associated with 3 different ways you can get a phone: buy it on a contract or buy it directly from the manufacturer outright and rent it. In order to have a fair comparison, our calculations of having a phone outright or through rental include Three’s SIM-only plan at £7.99 per month (12-months unlimited calls and texts with 30GB or £8 for 24 months). For the comprison of what it costs to have a phone on a contract, we used Vodafone's contract deals for the below smartphone models.
To calculate the total cost of how much you’ve spent on renting the phone after the rental agreement is up, we've taken:
Raylo's monthly charges for renting the phone
SIM-only plan from Three.
| Phone Model | Period | Monthly cost of rental (Raylo.com) | Cost Of The Rental For The Period | SIM cost (cheapest Three plan unlimited + 30GB) | Total Cost Of Renting | Retail Price | Cost Of Owning Outright¹ | Contract Upfront Cost | Monthly Contract Payments | Cost Of The Contract | Total Cost Of Ownership on Contract |
|---|---|---|---|---|---|---|---|---|---|---|---|
| iPhone 15 Pro (128GB) | 12 | £41.59 | £499.08 | £95.88 | £594.96 | £999.00 | £1,094.88 | n/a² | n/a² | n/a² | n/a² |
| iPhone 15 Pro (128GB) | 24 | £32.59 | £782.16 | £192.00 | £974.16 | £999.00 | £1,191.00 | £50.00 | £52.50 | £1,260.00 | £1,310.00 |
| iPhone 15 (128GB) | 12 | £29.59 | £355.08 | £95.88 | £450.96 | £799.00 | £894.88 | n/a² | n/a² | n/a² | n/a² |
| iPhone 15 (128GB) | 24 | £23.99 | £575.76 | £192.00 | £767.76 | £799.00 | £991.00 | £30.00 | £45.00 | £1,080.00 | £1,110.00 |
| Samsung Galaxy S24 Ultra (256GB) | 12 | £32.99 | £395.88 | £95.88 | £491.76 | £1,249.00 | £1,344.88 | n/a² | n/a² | n/a² | n/a² |
| Samsung Galaxy S24 Ultra (256GB) | 24 | £27.49 | £659.76 | £192.00 | £851.76 | £1,249.00 | £1,441.00 | £40.00 | £72.50 | £1,740.00 | £1,780.00 |
| Google Pixel 9 Pro (128GB) | 12 | £40.99 | £491.88 | £95.88 | £587.76 | £999.00 | £1,094.88 | n/a² | n/a² | n/a² | n/a² |
| Google Pixel 9 Pro (128GB) | 24 | £28.99 | £695.76 | £192.00 | £887.76 | £999.00 | £1,191.00 | £50.00 | £63.50 | £1,524.00 | £1,574.00 |
Prices correct as of 05.09.2024.
¹Cost of owning outright includes the retail price combined with Three's SIM-only plan for the period of either 12 or 24 months.
²Vodafone do not offer 12-month contracts
Renting a phone is only worth it for a very short term (12 months and less). If you're not a frequent upgrader and tend to keep using phones for 2+ years, you risk losing hundreds of pounds if you rent the phone long-term. For example, renting an iPhone 15 Pro for 4 years vs buying outright and having a SIM-only plan will cost you £565 more.
Unfortunately, Raylo no longer offer you an option to buy the mobile phone you rented at the end of the rental agreement, which means you either keep paying the monthly charges or upgrade to a different model and keep renting. Unlike when you are paying for a phone contract with a network provider, at the end of the term you paid out the phone and now own it.
Our research suggests that if you are looking to buy a new flagship phone, it’s best that you look at purchasing it through your network provider instead in order to spread the cost as opposed to splashing out on over £1000's.
Our calculations reveal that with a iPhone 15 Pro (128GB), it would cost you £499.08 to rent if for 12 months, additionally a SIM card will boost the overall cost to £594.96. Most network providers such as Vodafone do not offer 12 month contracts, so your best bet is to in fact rent the iPHone 15 Pro to avoid spending a whopping £1,094.88 in one year - which is the cost of buying the phone outright through Apple and using the cheapest SIM-only plan from Three.
On the Android side, the total renting cost of the Google Pixel 9 Pro for 24 months, including a SIM-only plan, comes in at £887.76. Bear in mind that the retail price of the Pixel 9 Pro without a SIM-only plan is £999 (£1,191 with a Three SIM-only plan) which is only a few hundred pounds more than renting it. If you buy a Pixel 9 Pro instead of renting it for 24 months, not only will you own it, but you’ll be able to trade it in which will earn around £430 (based on prices on Compare and Recycle 2024). This means that when you buy it outright you only really spent £761 over the course of 24 months, as opposed to renting it for £887.76 and getting nothing back in return.
Buying an iPhone 15 (128GB) outright and having a rolling SIM-only plan separately is the most savvy choice with it being £1,110 for total ownership. However, renting an iPhone 15 for 24 months will cost you £991 without giving you the option to buy the device once the rental period has ended meaning you lose out on quite a bit of money.
Choosing to buy or to rent a phone will mainly depend on how long you're going to use the phone for. Our comparison of phone ownership costs highlights how crucial it is to do the maths before making a decision and not to get tempted by low monthly phone rental payments.
Your first option to consider is buying the phone outright, especially if you’re planning to keep the phone for 2 years or more. Buying a new phone or a refurbished phone outright is the most budget-friendly option, with savings on average of at least £240 compared to contracts. Another benefit is that you own it and when you’re done with it you can sell your mobile phone and recover some of its leftover value, keeping the phone in circulation. A great example would be with the iPhone 13 where you can earn around £293 when you recycle it, despite it being a few years old.
If you're a frequent upgrader and swap phones every 3-12 months, renting a phone and returning it after the rental is up is a good option for you. However, with the current lack of innovation in smartphones and no significant differences between new generations, frequent upgrades don’t make sense financially and environmentally. Therefore owning a phone outright and using it for at least 2 years will help you to save hundreds of pounds and reduce your carbon footprint.
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