Could renting a smartphone save you money?
Leasing the latest device could save you cash and help the planet too, according to a new raft of smartphone rental services.
MusicMagpie.co.uk, Raylo.com, and Ooodles.co.uk all offer rental deals for the latest mobile phones from the big brand names, offering contracts similar in structure to car finance deals.
These gadget rental services have sprung up as the cost of the latest tech continues to surge. People commonly pay four-figures for brand new smartphones only to ditch their phone a year or two later when a new model comes along. Not only is this potentially a waste of money, but it’s bad for the planet too.
Smartphone rental services reckon they tackle both these issues by reducing the monthly cost of phone ownership, while also slashing the number of handsets which are thrown away or sit in drawers unused.
Under the rental schemes, customers lease a smartphone for up to 36 months. At the end of the lease, depending on the company, you can return the phone and end the contract, pay a fee to keep the phone, or start a new rental contract on a different device.
How does renting a smartphone work?
At MusicMagpie, users choose either a new or refurbished device and pay a monthly fee to rent it for 12 months. After a year they can carry on renting the device for a cheaper monthly fee, upgrade to a new model, or return the phone and walk away. However, there is not an option to buy the device and own it outright.
MusicMagpie says renting promotes “a circular economy” with its “refurbish and reuse” approach meaning every phone gets a new lease of life.
At Ooodles, you choose a new or refurbished phone and rental contract from three to 36 months; the longer the contract, the cheaper the monthly rent. When your rental period ends, you can choose to upgrade your phone on a new contract, return your gadget and end the rental agreement, or carry on renting it.
With Raylo you can choose a new or refurbished smartphone and choose a 12 or 24-month lease. At the end you can upgrade your phone with a new rental contract, or return the device and end the contract. Unlike the other services, there is also the option to pay a ‘non-return fee’ to buy the device.
With all these firms, phones are rented SIM-free so you’ll need your own SIM card to put in the phone. This can either be a pay-as-you-go SIM or SIM-only monthly tariff.
It’s not just smartphones that you can rent instead of buying – but other tech too. MusicMagpie offers games consoles, MacBooks, and Apple Watches for rent. Ooodles has laptops, tablets, games consoles, TVs, headphones and smart watches, while Raylo has laptops and tablets.
You’ll need to pass a credit check to rent a phone or other tech product. MusicMagpie, Ooodles and Raylo will all carry out a ‘soft’ credit search before offering you a deal.
Which phones can you rent?
MusicMagpie offers both new and refurbished iPhones for rent. However, with other brands such as Samsung, Google and Sony, only refurbished phones are available to rent. It lists smaller brands too such as Nokia and Motorola.
Ooodles offers both new and refurbished phones for rent, but only Apple and Samsung models.
Raylo has a small number of new phones for rent, including various models of the iPhone 13 and Samsung’s latest flagship phone the Galaxy S22. Its refurbished range are all iPhone 11, 12, XR or XS.
How much does renting a smartphone cost?
The monthly rental price depends on the smartphone model, its memory size, colour and whether the phone is new or refurbished. If the phone is refurbished, its condition will be categorised, and this will also impact the price.
As an example, on MusicMagpie a refurbished gold 256GB iPhone 12 Pro Max in pristine condition costs £41.99 a month (£503.88 a year).
Is this a good deal? A quick Google search reveals you can buy the same refurbished model from 4gadgets.co.uk for £774.99. Although this price is about £271 more expensive, the phone is yours forever while at MusicMagpie you’ll either have to hand the phone back after 12 months or pay a lower fee to keep renting it.
Raylo charges £32.99 a month to rent the same iPhone model for a year, or £29.99 a month for a 24-month contract. Unlike MusicMagpie, it lets customers pay a one-off fee at their end of their contract to keep the phone. At the end of a 24-month contract it would cost £269.99 to keep the iPhone 12 Pro Max.
If you want a new phone, a new 128GB iPhone 13 costs £31.99 a month on either Raylo or MusicMagpie, for 12 months. The same phone costs £34.99 a month on Ooodles for 12 months.
To get the best deal, phone users should decide which brand and model they want and whether they want a new or refurbished phone, then check the price on each site.
Find a SIM-only airtime tariff
Once you’ve chosen your phone and the length of your rental contract you’ll need to get a SIM-only tariff from a mobile network for your airtime contract.
There is plenty of choice and the right SIM deal for you will depend on how many calls, texts and GB of data you’ll get through each month.
Whether renting a phone and combining it with a SIM-only tariff works out cheaper than buying a phone on a traditional monthly contract very much depends on the phone you’re after and available deals.
You’ll need to do the maths for a particular phone and compare all the deals on offer to work out whether it’s cheaper to buy the phone on a monthly contract including airtime, or to go down the rental route. For some phones it may be cheaper to buy the phone outright and pair it with a SIM-only tariff.
What happens if I damage my phone?
Although rental phones come with a warranty, insurance is up to you. Raylo sells its own insurance underwritten by AXA, but you’re also free to shop around for your own mobile phone insurance (you may already have this with a packaged bank account).
Your phone will need to be in decent condition when you hand it back at the end of the contract. Although the rental companies all accept that there will be some wear and tear on devices, they charge repair fees for more significant or malicious damage.