The Tab, Two Year Guarantee, and MATH

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  • Updated 5 years ago
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OK, so I am considering a switch to Koodo and need to understand the tab thing and how the numbers work. I apologize in advance for anyone who gets hives from doing math.

CAUTION: MATH AHEAD. THIS IS YOUR LAST CHANCE TO TURN BACK!

Phone and Plan: Blackberry Q5, $40 Canada-wide Data Plan
=====================================================
Tab Small:
$150 phone cost
$150 on Tab
$40/month
Total cost after two years = $150 + $40*24 = $1110
------------------------------------------------------------------------------------
Monthly Tab Decrease = $40 * 15% = $6
Total Tab Decrease = $6 * 24 = $144
Tab Balance Zeroed After 24 Months = $150 - $144 = $6
=====================================================
Tab Medium:
$0 phone cost
$300 on Tab
$45/month
Total cost after two years = $0 + $45*24 = $1080
------------------------------------------------------------------------------------
Monthly Tab Decrease = $45 * 15% = $6.75
Total Tab Decrease = $6.75 * 24 = $162
Tab Balance Zeroed After 24 Months = $300 - $162 = $148
=====================================================

So does this mean that I actually save $30 by not paying anything upfront and distributing the cost of the phone (depreciating in value anyways) over the life of the contract? And, that I will get my tab zeroed out regardless of what the balance is?

I figure I must have misunderstood something somewhere. Please someone correct my math. Thanks in advance for your time and assistance.
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hr613

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Posted 5 years ago

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Paul Deschamps, Mobile Master

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Yes you save money by putting the phone on the tab, koodo like any carrier would rather you take a tab or contract because it means you'll in most cases by a customer for the next 2 years which makes them money by selling you the service for the phone.

Yes at the 24 month mark your tab is cleared to $0 owing regardless of whether or not you've paid it off.
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Marcel in O-Town

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if you factor out the difference of what koodo wipes out at the end of 2 years, you actually save more (1110-6=1104, 1080-148=932, or $172 savings).
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hr613

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Thanks for the prompt reply.

I guess that makes sense. By having me take a higher Tab up front, they increase the likelihood that I will remain for 24 months because the balance is significantly larger should I choose to leave.
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Paul Deschamps, Mobile Master

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If you leave it's just the same as if you bought the phone outright for $300, so it's not significantly pricier if you leave. There's no cancellation fees, just pay what you owe still on the phone and your final month of service up till the day you cancel.
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hr613

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I see. Thanks for clarifying.
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Jonathan I, Mobile Master

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Medium Tab is the best choice for new activations/adding lines or existing customers who want to upgrade and already have a $30 plan. If existing customers who are upgrading want to keep a grandfathered plan of $25 then there may be some debate there.
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Mayumi, Mobile Master

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Wait ! For Tab M:
Tab Medium:
$0 phone cost
$300 on Tab
** $45/month → $40/month +$5 tab charge**
Total cost after two years = $0 + $45*24 = $1080

**Monthly Tab Decrease = $40 * 15% = $6
**Monthly Tab charge(you pay) = $5 x 24 = $120
Total Tab Decrease = $6 x 24 = $144 + $120 = $266
Tab Balance Zeroed After 24 Months = $300 - $266 = $34 remaining amount(will be cleared)

Total cost you pay after two years are correct but remaining tab amounts aren't. :)
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hr613

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Ah ha! Now that makes more sense from the Tab balance; a $4 difference is a lot more understandable than over $100. Thank you for clarifying.
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Marcel in O-Town

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lol. that's what i get for trying to do math first thing in the morning....
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Mayumi, Mobile Master

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No Problem :) And yes! Still Tab M is the best way to go like everybody said :D
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Marcel in O-Town

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You will actually save a few more bucks with medium tab... If you pay $150 for the phone on small tab, you are subject to your provincial taxes (in my case, 13%) = $15.45. If you put the entire amount on the tab, no taxes...

just a thought...
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Mayumi, Mobile Master

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True! I forgot about taxes. I need more coffee (^_^)
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Sophia, Mobile Master

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Ahahaha! You get more coffee and I'll get rid of the hives I got from all that math :D
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hr613

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Wait... so the monthly charge for the Tab is tax exempt?!?

(As in, Tab Small is $40+HST, Tab Med is $40+HST+$5, not $45+HST)
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Mayumi, Mobile Master

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There is tax on $5 tab charge.
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Dennis, Mobile Master

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Tab Balance Zeroed After 24 Months is tax free and the 15% Monthly Tab Decrease is tax free

Basically anything that is on Tab that is not decreased by the Monthly Tab charge is tax free.

Tab Small:
**$150 phone cost + Tax
$150 on Tab

Tab Medium:
$0 phone cost
$300 on Tab
**Monthly Tab charge(you pay) = $5 x 24 = $120 +Tax

That's an additional $30 x Tax Rate in your area worth of savings for going Tab Medium

Yay I got some math in :)
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Chris Petersens

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So what have learned here? Are we saying that as long as I'm OK with the tab charge and a minimum of $30 rateplan I am always better off taking tab M for phones costing $200 and up?
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Dennis, Mobile Master

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$300 and up
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Marcel in O-Town

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On Tab M the sweet spot is $264. Any phone between that and $300 you are making money after 24 months. The Tab L sweet spot (assuming $65 plan and $10/month contributions) is $474... 24 x ((65*.15)+10)

And as pointed out previously, tax tax tax - you would also save the tax (in my case $65) on a $500 phone....
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Dennis, Mobile Master

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Awwwwww :(

Im late to the math party *sob*
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Zaphod Beeblebrox

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No you're not. You just added 1 to the previous amount of contributors :)
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Dennis, Mobile Master

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I had to fit something in. Took some digging to find math worth doing. If you are in Alberta that tax rate savings adds up tp $1.50 over 24 months LOL
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Chad Burr, Mobile Master

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You lost me at "+"
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