Aisha asks: “My iPhone 6 plus is water damaged after I was caught in heavy rain. I’ve asked three about cancelling my contract (£56 per month) and they want a whopping £600 to cancel early as I have a year left. What would the next best steps be?”
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Q&A 56 – Can I Get Out Of My Phone Contract? – Shownotes
Today’s question comes from Aisha:
My iPhone 6 plus has become water damaged in my pocket when I was caught in heavy rain.
Stupidly, I did not take out insurance on the device and Three don’t want to help on the matter and have directed me to Apple who want £265 to replace the device with a refurbished one.
I’ve asked three about cancelling my contract (£56 per month) and they want a whopping £600 to cancel early as I have a year left. Is there a mobile company who can buy out your existing contract if you move to them? Or what would be best steps be?
Thanks!
Remember Our Insurance Rules
How annoying Aisha – sorry to hear about that.
Firstly, let’s think about your phone replacement. Neither Three nor Apple have any obligation to replace the phone. Sorry.
However, if you have a home insurance policy, this may cover your mobile phone for damage. It is worth checking with your insurance provider to see if you can make a claim on this insurance.
You say in your question that: “stupidly” you didn’t take out insurance. Remember our insurance rule. If you can’t afford to replace it, you shouldn’t be buying insurance, but you shouldn’t be buying the product in the first place. The only exception is if the product is an absolute necessity. A mobile phone could arguably considered a necessity, but the top of the range iPhone 6 is certainly not.
So, your mistake wasn’t not taking out insurance, but instead buying a product that you couldn’t afford to replace.
Finding A Replacement Phone
Therefore, my advice would be to buy a new second-hand or refurbished phone which is compatible with your SIM card (or ask Three if they will provide a different SIM on the same contract if possible). Something that does what you need, but nothing so expensive that you’ll have a financial dilemma if the same happened again.
You ask about cancelling your Three contract. Unfortunately, that won’t be an option. When you took out your contract, you agreed to pay 2 years of £56 per month (£1,344). This was to cover the price of the phone (£600 or so), the contract (£20-25 per month as SIM only) and a nice healthy amount of profit for Three for providing this “financing agreement”.
This is why you should never agree to phone contracts and it’s a much better idea to take out SIM only deals (Question 10) and buy your phone separately up front.
Getting Out Of Your Contract
Three have no incentive to let you out of your contract early other than the can receive the rest of your cash today rather than waiting for the rest of the year. That’s why they have offered you £600 to exit your contract, rather than the £670ish that is left on your payment schedule.
Therefore, get a cheap replacement phone, wait until your contract expires in a years’ time and then don’t make the same mistake again!
Ask Your Question
This show runs three times a week and answers all of your personal finance questions. If you have any questions, please don’t be shy to ask. You can ask in three ways:
- Leave a comment on any of the Q&A podcast shownotes (including this one)
- Email me at moneystepper@gmail.com
- Leave a message on the Speakpipe App which you will find below and on our “submit a question” page:
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