Ten ways to save on your mobile contract

You're in a strong position when you sign up for a mobile contract - don't pay more than you have to (Image: Recombu)

Mobile phones are  an expensive necessity - but whether you sign up to a monthly contract lasting years or decide to travel the pay as you go route and stump up for the cost of a handset in advance, there are ways to save, although your network may not always be keen to share these secrets.

Ten money-saving tips

1. Go SIM only
SIM only is the lesser-known sibling of pay monthly and pay as you go mobile phone contracts. As the name suggests, it doesn’t come with a handset so you’ll need to buy a phone upfront or use one you already have.

[Related: Compare mobile contracts here]

But you can then tailor what you buy to the calls and texts you make and the data you use, which over the course of an equivalent 24-month contract can save you hundreds of pounds.

SIM only also has the advantage of offering 12-month and one-month rolling contracts, which makes it easy to change tariff and usage options more often, or opt out altogether.

For example a typical iPhone 5 contract costs £36 a month for 1GB internet, equating to £888 over two years. Buy the phone upfront for £529 from Apple, and opt for a £10 SIM-only deal from Virgin Media and over two years you’ll spend £769, a saving of over £100. And because you are on a rolling contract you can swap networks with just 30-days notice.

2. Check your allowance
As simple as it sounds, it’s worth taking a moment to check your last few phone bills and see how much of your call, text and data allowance you actually use. Once you have a clear understanding of what you use, you’ll be better armed to get the right deal when it comes to negotiating a new contract.

3. Check for value tariffs
The major networks all have deals with big name mobile phone manufacturers, and usually offer special tariffs associated with those phones. Ask your network for any deals available and if you’re flexible as to which handset you have you could make serious savings.

4. Consider a capped tariff

You can now put a monthly tariff cap on some network contracts to save from unpleasant surprises in your next bill. Available from Tesco Mobile and T-Mobile (where it’s called You Fix), you can cap your tariff so you can only use the minutes, text and data in your allowance. T-Mobile offers capping for a range of specified contracts while Tesco Mobile offers it across all of its contracts.

Oh, and if you want to top up at any time you can just add more credit using a PAYG top-up card.

                             [Related: Compare mobile contracts here]

5. Fight your corner
When it’s time to renew your phone contract, you’re in the strongest position of your mobile phone life. Before you talk to your network, check out other tariffs from other network providers and find the best deals you can.

Armed to the teeth with knowledge of better deals elsewhere, negotiate hard with your provider to get more minutes, texts and data for less money along with the phone you want – and if they put up a fight simply threaten to leave.

You’ll likely be put through to the retentions team who are authorised to price match other deals that can save you bundles. And if they can’t match what you want, it may not be a bad idea to do exactly what you threatened and change provider.

6. Consider nearly new
While it’s nice to show off with a shiny new Apple iPhone 5 or Samsung Galaxy S3, flagship phones come with flagship prices. Look back a model or two and you’ll find that fast moving technology can have a big impact on the prices of phones six or eight months old.

Or of course you can go the whole hog and look at second hand and refurbished handsets, as long as you stick to reputable dealers that offer warranties, such as CEX, which offers 12-month warranties with all its phones. CEX offers the Samsung Galaxy S3 for £335 refurbished, whereas the typical online price is £400 - a significant saving.

                                   [Related: Compare mobile contracts here]

7. Sell your old phone
Talking of second hand, there’s a serious market for used mobile phones, and the better the condition the more they’re worth.

While broken phones may only be worth a few pounds, good models can be worth hundreds (a working 32GB iPhone 4 was valued at £125 and a 32GB iPhone 4S at £250 when we checked envirofone) and are a great way to offset the cost of a new handset. There are plenty of specialist retailers waiting to swap your phone for cash, but don’t forget good old eBay – the effort of private sales usually earns greater rewards.

8. Shorten your contract
While 24-month contracts have now become the norm, there are some network providers offering 12-month contracts. Opting for a shorter contract means you’re more flexible to swap tariff sooner and fight for your right to a better deal and a newer phone. You may find you have to pay a little more upfront for the handset though.

9. Get cashback
One of the great revolutions of internet shopping is the advent of cashback and voucher sites that do all the deal hunting for you. Before you buy any contract, search them out on sites like Quidco, which are free to join and offer deals often with big cashback bonuses or store discounts.

                                         [Related: Compare mobile contracts here]

10. Look for other rewards
Quite a few phone contracts now come with benefits not necessarily related to your mobile phone.
Tesco Mobile offers Clubcard reward points with purchases redeemable in store against food and petrol, and often has special deals with further discounts.

Network provider EE is currently offering its mobile phone customers (including T-Mobile and Orange) big discounts on its home broadband package – charging just £2.50 a month (plus £14 line rental) for unlimited broadband, the cheapest deal on the market at the moment.

Check out the Yahoo Mobile Comparison tool to find the latest deals.