Are you saving money by leasing your telephone? Years ago, many consumers leased their home telephone from the telephone company. Since the break up of Ma Bell, ten years ago, consumers are taking advantage of their right to purchase the phone of their choice. Today, millions of consumers continue to lease their home phones even though the purchase price of a telephone is a fraction of the long-term cost of leasing. According to the Federal Trade Commission, many consumers are leasing telephones without knowing it.
How do you know if you're leasing a phone? If your phone bill shows a charge for "leased equipment," you are leasing your phone(s). Some telephone lease companies send you a separate bill for lease charges. Others include lease charges as part of your monthly phone bill.
If you are leasing your home phone, the Better Business Bureau suggests the following:
Consider the cost. Since most phones pay for themselves in four to six months, it may make good financial sense to buy them. Lease rates generally range from about $6 a month for a standard push button model to $20 a month for some cordless models, or about $72 to $240 a year. Many consumer telephone leases are three-month leases, renewable month-to-month, with billing for payments monthly or quarterly on an advance payment basis.
Convenience should be a factor. Telephones are available for purchase at a variety of retail stores. Once you pay for your telephone, you own it. Most purchased telephones come with a one- or two-year warranty from the manufacturer. For repairs or maintenance, you may have to take or send your purchased telephone to a particular location, which may be in your area or not. When your warranty expires, further repairs and maintenance are your responsibility.
Lease programs generally offer customers a free, same-model lifetime replacement. Occasionally, the same model is not available. Ask whether there would be an adjustment to your bill in that case. Some leases may offer free replacement cords, batteries and outlet conversion kits. In addition, some companies will allow you to upgrade to another model for a fee.
Telephone leases may be a realistic choice for some consumers, especially those with specific short-term needs. They can offer security: repairs and replacements are included in the overall cost. But remember, this convenience comes at a price.
If you lease your phone, consider checking the cost of replacing it. If you decide it's time to buy a phone, be sure to contact your telephone leasing company to cancel your lease.
