How Fido's New Device Financing Works

By Stephen Clark

Last updated 10 February 2020

Article Summary

With prices on premium devices soaring well over $1,000, Canadians need affordable ways to pay off their new cell phones. Enter Fido, the first non-premium carrier in Canada to offer device financing, which allows you to pay off the cost of your phone over 24 monthly payments. It’s very different from how Fido plan and device payments worked before, but similar to the Tab system employed by their competitor, Koodo Mobile.

Comparing Financing to Subsidized Plans

The new financing system works differently from Fido’s previous subsidized pricing plans. You still pay the balance of the phone over two years, but you have the freedom to upgrade or downgrade your plan at any time. With financing, you pay a fixed price that is divided into 24 equal monthly payments. Upon signing the contract, there may be a promotional discount which reduces the overall cost of the phone.

The older system used subsidized plans to pay off your phone. With that system, you could shell out the full cost of the phone upfront (or bring your own phone) and just pay for your month-to-month plan. If you wanted a new phone at a lower upfront cost, then you would pay a higher price for the monthly plan and sign a two-year contract.

Let’s use the iPhone 11 (64GB) and a 10GB plan with unlimited minutes in Ontario as an example:

Paying for Phone in Full

Upfront cost is $1,005
Monthly bill is $75/month
Change your plan at any time (no two-year contract)
Leave Fido, keep your number and switch to any Canadian carrier that supports your iPhone 11

Subsidized Plan (Old Fido System)

Upfront cost is $0
Discount of $45 is applied
Same 10GB plan is now $115/month
Monthly bill does not reduce after two years
You cannot downgrade to a plan with less data before two years
Breaking your contract early may incur cancellation fees (including paying back your $45 discount)

Financing Plan up to $800 (New Fido System)

Upfront cost is $205
No discount (limited-time promotions may offer discounts)
Monthly bill is $75/month for the plan plus $33.33/month for the phone ($108.33/month total)
After two years, your bill automatically reduces to just the plan price
You can downgrade to qualifying plans with less data at any time
Ending the contract with Fido before two years requires paying the balance owned on the iPhone 11
Cancelling early may also require a cancellation fee equal to a portion of any promotional discount

Other Ways to Buy a Phone

Financing with Bell, Rogers and Telus

Since mid-2019, premium carriers Bell, Rogers and Telus have offered device financing for up to 100% of the price. Fido is the first small carrier to offer this option, but their financing can only cover up to $800 of the device cost with the balance being paid upfront. Bell, Rogers and Telus offer leasing options to help reduce monthly payments, but the phone must be returned at the end of the contract. Fido doesn’t offer leasing, so you’ll just need to pay a little up front in order to get that flagship smartphone.

Bell also offers subsidized plans (similar to the way Fido used to offer new phone purchases). That option is likely to disappear sometime this year with device financing becoming your only option.

Subsidized Plans with Virgin Mobile

Virgin Mobile is one of Fido's direct competitors and offer similar mobile plans and prices. However, they’re still offering new smartphones on subsidized plans the way Fido did before. Virgin Mobile will still lock you into a two-year contract. The plan price will vary based on the value of the phone and how much you choose to pay upfront.

Tabs with Koodo and Freedom Mobile

Koodo and Freedom Mobile are Fido’s other main competition; they both use “tabs” for device payment contracts. Just like financing, the plan price and tab are billed separately; after you’ve paid off the phone in two years, your monthly bill drops to just the price of the phone plan. However, you might not be able to downgrade your data plan while you’re on a two-year Tab, and leaving early could result in cancellation fees

There are several ways to buy a smartphone in Canada, and every carrier has their own options. Keep your possibilities open since every cell phone sold in Canada must be unlocked from the carrier. That means you can change mobile providers to find the best plan that suits you. Just make sure you’re on a payment plan that lets you do that without expensive penalties.