When it comes to buying a new iPhone, there are generally two options available: purchasing the phone outright or signing up for a contract with a mobile provider. Both have their pros and cons, but which one is cheaper in the long run?

Buying an iPhone outright means you pay the full retail price upfront. The latest iPhone models can often cost over $1,000. This may seem like a hefty price tag, but it’s important to consider that, over the course of a two-year contract, you’re likely to spend much more on service fees and monthly plan costs.

On the other hand, signing up for a contract can seem like the more affordable option upfront. You may only need to pay a small upfront fee for the device, and the rest of the cost is spread out over the contract term. However, you’ll also need to pay for a monthly plan that includes data usage, calls and texts. Over the course of a two-year contract, these fees can add up to hundreds or even thousands of dollars.

To determine which option is cheaper for you, it’s important to factor in your usage needs. If you’re someone who uses a lot of data and regularly exceeds their monthly limit, buying an iPhone outright and using a prepaid or pay-as-you-go plan may be more cost-effective in the long run. However, if you only use your phone for basic tasks like calling, texting and browsing social media, a contract may be a more affordable option.

It’s also worth considering the resale value of your iPhone. Buying an iPhone outright means you own the device, and can sell it for a higher price if you decide to upgrade or switch to a different phone. With a contract, the phone technically belongs to the mobile provider, and you may not be able to sell it for a profit.

Ultimately, the decision on whether to buy an iPhone outright or sign up for a contract depends on your usage needs and budget. While a contract may seem more affordable upfront, the total cost over the contract term can add up to much more than buying the phone outright. It’s important to do your research and weigh up the costs before making a decision.