Curious if Rogers’ Device Financing program is right for you? We were too, so we did some research to understand who this program is best for.
The program works more or less as you’d expect based on the name: it allows you to spread out the payments for your phone equally* across 24 or 36 months.
Spoiler alert! This program is a good fit for you if you want a high-end phone and:
1) don’t want to make a large upfront payment, and/or
2) expect to keep your phone for more than 24 months.
In order to explain why that is, we need to clear up some details about Rogers’ other offerings.
We call these programs the ‘Contract Model’. Here’s how it works.
Rogers’ Contract Model
When you sign up for a two-year contract, you pay an upfront fee for your phone (as low as $0, depending on the phone that you choose) and then a monthly service fee until your two-year contract is up.
What is unclear about the Contract Model is that the upfront fee is not the full price of the phone.
The carriers know that their customers do not want to pay in full for their phones. So they sell the phones at a discount (say $720 less) and then you pay down that discount over the next 24 months of your contract.
The Contract Model works pretty well… until you needed a new phone before the end of your contract.
Then you’re in trouble: the carrier wants a big ‘early upgrade fee’.
Since they never bothered to explain how the Contract Model works, this has been a major pain point for customers for years. This early upgrade fee is the part of your original discount that you have not yet paid off.
One of the tricks of the Contract Model is that Rogers expects you to upgrade your phone after 24 months. However, if you held on to it for longer than that, you would have fully paid off your discount. But your monthly payment would not be adjusted (we’ve heard unconfirmed rumours that you can call and request lower payments).
That means you wind up paying more than full retail for your phone if you do not upgrade right at 24 months!!
In the last couple of years, Rogers introduced plans with “Tabs” that make it clearer that part of your monthly payment is to pay back that upfront discount. But it’s still clear as mud for most people.
Okay, so that’s the Contract Model. Now let’s look at this new Device Financing program.
Rogers’ New Device Financing Program
Rogers’ Device Financing program is similar in many ways to the Contract Model. The biggest difference is that they fully separate the Wireless Service payment from the Hardware Payments for your phone.
This is important because if you have fully paid off your device, you no longer have to make the Hardware Payments, and your total monthly payment to Rogers will go down as a result.
The second difference is that unlike the Contract Model, Rogers will allow you to get a phone with no upfront payment (you’ll make up the difference with larger payments over the next 24 months).
At least, that’s what the marketing says. We read the fine print and you still have to pay HST on the full value of the phone up front. On an iPhone XS 64 GB in Ontario, that’s $179 up front!
The following chart breaks down the monthly payments for the Contract Model and the Device Financing Model over the course of 30 months. This assumes a $75 unlimited data base plan with an iPhone XS 64 GB and these figures include sales tax.
The first thing that you’ll notice is the large upfront payment under the Contract Model: $690 + HST, compared to $179 under the Device Financing model.
After that, the payments under the Device Financing program are higher for the next 24 months.
Once those 24 months are up though, the Device Financing program becomes cheaper again. That’s because, at that point, you’ve fully paid off the iPhone XS. Hardware payments end, leaving only the wireless service payments of $75 per month.
Contrast that against the Contract Model, where payments are unchanged until you upgrade to a new phone.
To be clear, if you upgrade at the 24-month mark, then you pay the same amount under each plan. The payments are just spread out differently.
But if you hold on to your phone for more than two years, you clearly come out ahead under the Device Financing program.
Breaking It Down
So in review, all things considered, the Device Financing program is attractive if:
- You need a new high-end phone and do not want to make a large upfront payment
- You intend to keep your phone for more than 24 months
We believe that bringing your own device remains the best option for most wireless subscribers. At the same time, we applaud this move by Rogers to bring legitimate new options to customers.
If you do wind up upgrading with Rogers, you can get the best value for your old phone by selling with Orchard.
P.S. Telus announced a similar program recently. We’ll be writing about theirs soon, stay tuned!