Here’s how to make sure that carrier smartphone deal is really a deal

This time of year, there are tons of smartphone deals happening at Canadian carriers. But not every deal is a deal and not every $0 phone is free.

In many cases, it’s cheaper to purchase a phone outright and get a lower-cost monthly plan than to get a phone from a carrier. As such, it’s important to consider a variety of factors when it comes to smartphone deals:

• The cost of the phone (both the cost to finance it and the outright cost).
• The monthly plan over 24 months (the typical length of a phone contract).
• Whether you need to pay an additional fee to keep the phone at the end of your contract.

Then, compare that with buying the phone outright with a plan of your choice. Plus, keep in mind that most phones will last three to five years, so keeping them beyond a 24-month contract improves the value proposition.

If buying a phone from a carrier and the cost of the plan is less than buying the phone outright with a cheaper plan, that’s great! But in many cases, it won’t be, which is why it’s worth checking these details.

Example 1: $0 Pixel 9

For example, several wireless providers have the Pixel 9 available for $0/mo financing on a $75/mo plan, which works out to $1,800 total over 24 months if you agree to return the phone at the end of your contract. And it can be as much as $360 to keep the phone, depending on how carriers divvy up the price for their device return programs. That raises the total cost over two years to $2,160.

However, Freedom Mobile charges $4/mo for the Pixel 9 on a minimum $45/mo plan, for $49 total or $1,176 over 24 months (again, you need to return the phone). Freedom charges $264 to keep the Pixel 9, making the total cost $1,440.

The Pixel 9 usually costs $1,099 outright (from Google — wireless providers tend to inflate the outright price on their websites). That’s $341 less than Freedom’s total price, but you still need a plan with your phone. To match Freedom’s price with an outright Pixel 9, you need a plan that’s roughly $14/mo or cheaper, and good luck finding one of those in Canada. So, the Freedom Pixel 9 deal is, in fact, a deal.

But the calculation shifts with other providers offering the $0/mo Pixel 9, as there’s a $1,061 difference between the price of the outright Pixel 9 and the total cost of financing at the carrier, which means you need to pay roughly $44/mo or less for your plan to beat that ‘deal.’ And that’s actually fairly easy to do since several providers offer really good plans in the $35/mo realm.

And to throw one more complication into this, Google has the Pixel 9 on sale for $849 right now, what means buying outright with a $24/mo or cheaper plan beats Freedom’s deal, while a $54/mo or cheaper plan beats most of the other providers.

Example 2: $20/mo iPhone 15

As another example, let’s take Telus’ iPhone 15, which is currently $0 down and $20/mo financing with Bring-It-Back. Telus’ fee to keep the phone is $230 and the minimum plan is $70/175GB (after $5/mo autopay discount). That’s a total of $2,390 overall.

But if you buy the iPhone 15 from Apple, it costs $999, which means that as long as you get a plan that costs less than $57/mo, you come out ahead in the long run. Apple also does 24-month financing at $45.17/mo, or a total $1,084.11 for the iPhone 15. If you go this route with a $54/mo or cheaper plan, you also come out ahead of the Telus price.

It’s important to break down the pricing this way any time you’re looking at purchasing a phone from a carrier, but it’s especially helpful during the holiday deal season when every provider is pitching deals and savings on phones. And with carrier pricing often being split up over 24 months and other factors like device return pricing, it can get confusing, so breaking down pricing can really help you figure out if you’re getting a deal. Plus, going the outright route means you’re not locked to one carrier for 24 months, allowing you to hop providers to take advantage of surprise deals or win-back offers, potentially netting even lower monthly wireless rates.