Early termination fee

[rchour]

Hi,

i am trying to compare Buying a phone outright vs Getting into a contract knowing that I will cancel in 12 months as I am leaving the country. So far contract seems better in my calculations.

can someone confirm that the contract cancelation fee is only = (Phone full price - upfront cost) * remaining month / 24 ?

also, if I get the iphone 11 pro with 350 upfront cost instead of 450 (limited time offer 100$ off), will the upfront cost be considered as 350 or 450?

[Scooby-Doo · Accepted solution]

Hello @rchour 

Welcome to the community!🙂

In so far  (meaning not having the agreement drawn yet) I may confirm the phone contract cancelation fee is only = (Phone full price - upfront cost) * remaining month / 24.

There might be data plan cancellation fee to factor in which should be mentioned to you in your agreement.

The agreement will be sent to you 3-5 before sending receiving  the phone and once the phone arrives you will have 15 days to cancel upon receiving the phone (without used of data or a max of some MBs. .. you can use wifi that doesn't affect).

The promotion of $100 off should be affected direct on the cost of the phone.. meaning limited time offer 100$ off), will not reduce its like your upfront cost be considered as 450.

Please insure you verify

your agreement wording as it can change.

I hope this helps you🙂

[rchour]

Thank you @Scooby-Doo for the detailed explanation! That answers all my questions

[rchour]

i am trying to compare purchasing a new phone from Apple or Outright from Fido. Price is 1379+tax at Apple and 1415 at Fido for Iphone 11 pro.

is tax included in Fido’s outright price?

[KAPABLE-K]

Hello @rchour,

The iPhone 11 Pro 64gb is $450 upfront on an XXL plan which starts at $115/month. I do not see the $100 offer you reference but I do see you can get a $168 credit.

So you want to know if it's cheaper to get the phone from Fido and cancel in 12 months rather than buying it outright from Apple. 

When doing your math you should include the cost of the plan also.

If you buy the iPhone 11 pro 64gb from Apple it would be $1379 + 13%tax = $1558.27

If you take a comparable BYOP plan 10gb it will be $75/month + 13%tax = $84.75 x 12months = $1017 + $1558.27 (retail cost of the phone) = $2575.27 would be the final cost of the phone and service over 12 months.

If you take the phone from Fido on an XXL plan $115/month + 13% tax = $129.95

Upfront cost of the phone $450 + 13% tax = $508.50 - $168 credit (current promo) = $340.50

The outright price for the phone from Fido is $1415 - $450 upfront cost = $965 on the tab which gets reduced by $40.21 a month. in 12 months your tab balance will be roughly $482.52 + 13% tax = $545.25

The upfront cost of the phone $340.50

12 months of service with tax $1559.40

Tab balance to be paid off $545.25

Add it all up if you take the phone from Fido including service and cancel in 12 months you will pay $2445.15

Because of the current promotion, it works out to be roughly $130.12 cheaper if you take the phone from Fido.

Also, all the prices on Fido's website are before taxes.

Hope this helps.

[rchour]

Thank you @KAPABLE-K , your logic totally make sense!

I ran the numbers on a quick excel sheet following your thought process, and got a similar result. I even assumed buying it off kijiji for $1200 outright while Fido gives me an extra $100 on the upfront cost (350$) without affecting the subsidy amount and the XXL plan at 80 instead of 115 (loyalty offer?).

I tried all scenarios of cancellation (from 2 to 24 months), and the contract still seem like a better option. 

I think that buying the phone outright adds roughly $50/month to the bill I have to pay anyway, so it adds up to be always higher than the contract, even with an upfront cost on the contract.

I also ran a scenario with Financing from Rogers, and it was horrible haha.

Cheers!