Forget the Hype: Is Vodafone Red Hot a Good Deal? No.


The rise of the smartphone has seen product cycles get ever shorter, with the latest, greatest smartphone on the market being outdone within a few months of release. But such leading models are not cheap, and most people get locked into a 24-month contract with each phone, which means that whilst your phone may have been amazing when you bought it, that will certainly be less of the case by the time you are due an upgrade.

There is a lot of news today about Vodafone announcing a “Red Hot” tariff that enables early adopters to upgrade their phones every twelve months rather than every 24. That sound great, but you are not left with the phone at the end of those twelve months because you are essentially renting the phone from Vodafone. So how does this deal stack up?

First let’s just look at the overall price for a 16GB iPhone 5…

With the Red Hot tariff, the phone is free on a £59 – so that’s £708 per year but the phone is not yours at the end of that period.

If you simply opted for a 12-month plan for that same 16GB iPhone 5 with Vodafone on a similar data/minutes deal you would have to pay £169 upfront and then £51 per month. After 12 months you will have paid £781 but you will own that iPhone 5, which means you could then swap down to a cheaper sim-only plan, or you could upgrade and trade in your phone. The various trade-in companies are offering between £350 and £450 for a 16GB iPhone 5 now, but even if they drop that to £100 by this time next year then you have still saved £27. Anything more is a bonus, and if you keep the phone in a good condition then its trade-in value is far more likely to be around £200-£250 – which would mean you would be about £150 better off without this Red Hot tariff.

If it sounds too good to be true – it is. Vodafone Red Hot is a great gimmick for Vodafone to make more money – it will actually cost you more!

Photograph by NRMA New Cars

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