Should I buy a sim free phone or get a phone which is cheaper - or even "free" - with a contract?

In the UK, nearly all phones supplied to personal consumers are on contract, although some consumers (myself included, incidentally) prefer to buy a phone outright and then either use a pay as you go SIM, or a flexible monthly payment SIM where the cost is purely for the calls, texts and data and does not go towards paying off the phone.

The choice of which way you should go is a personal one and there is no right or wrong answer, but I will discuss the pros and cons of each method below.

The Initial Cost

Initially, it is cheaper to get a phone on a contract. A phone on a contract is always availalble at a reduced price and is sometimes "free". Of course, the phone isn't really free - you are paying for it over the duration of your contract in addition to the calls, texts and data transfer. It's more that the cost is invisible.

Flexibility

With a contract, you are tied in to the same phone and same provider for a specified period. One year, eighteen month and increasingly two year contracts are the norm now as the cost of the more expensive smartphones need to be recouped by the operators. However, two years can be a long time to hold the same phone when technology is progressing rapidly.

With a SIM free phone, you pay less each month because the phone is already paid for, and you usually have the option to change provider without being locked in. I say usually, because it is possible to buy a contract for calls, etc, which does not include the phone.

SIM Locks

When you buy a phone on a contract, the handset is usually "locked" to that network. This means that you can only use the phone with SIM cards from that network. It is possible to get unlock codes from the networks, but their policies vary on this. Some will not provide the unlock code until the contract period has expired. It is possible to unlock mobile phones, but many people view it as a hassle.

SIM free phones are not locked to a particular network and can be used with any network, as you choose.

Retailers offering SIM Free Mobile Phones on Interest Free Credit

Retailer Information Payment Terms
Littlewoods

Littlewoods offer a choice of SIM Free mobile phones by brands including BlackBerry, HTC, Motorola, Nokia, Samsung, Sony Ericsson.

Delivery is free

 

Pay interest free over 52 weeks or buy now pay nothing until 2013 with promo code 27ZG5 on orders over £50, valid until 1st January, 2013

Get 10% off when you open a credit account - quote code 29U99.

New customers only, excludes audio, gaming, computers and sale items; offer ends 31st January, 2013. See voucher code Terms & Conditions.

Very

Very offer a similar choice to Littlewoods above. Prices are cheaper but the standard interest free credit period is shorter.

 

Many different buy now pay later options including:

  • 3 months interest free credit
  • Buy now pay nothing for 6 months with voucher code 28E9H on orders of £120 or more, expires 4th September, 2013
  • Buy now pay nothing for 9 months with voucher code 28E9G on orders of £220 or more, expires 4th September, 2013
  • Buy now pay nothing for 12 months with voucher code 28E9E on orders of £270 or more, expires 4th September, 2013.
  • Buy now pay over three years (interest applicable)

Get 10% off when you open a credit account - quote code 29U99.

New customers only, excludes audio, gaming, computers and sale items; offer ends 31st January, 2013. See voucher code Terms & Conditions.

All credit is subject to status.