If you’re looking for an iPhone 5, do you want to pay an extra $450 now, or an extra $1000 over the next two years? Buying an unlocked phone and using a no-contract carrier can give you sticker shock initially, but you can save quite a bit of money in the long run. Our number-crunching colleagues down the hall at Consumer Reports looked into it, and found that if you can pay for your new phone itself out of pocket, going unlocked and contract-free is a much better deal.

Here’s their breakdown:

Virgin Mobile has similar iPhone pricing, but doesn’t yet offer the data-gobbling LTE iPhone 5. There are, of course, other options if you prefer to stay with a contract carrier: cheaper data and text plans, employer discounts, and family plans. But we’re still hoping for a future where consumers buy unlocked devices and can take them to the compatible carrier of their choice with no restrictions.

No-contract iPhone 5 is a better deal in the long run [Consumer Reports]

PREVIOUSLY:
Straight Talk Wireless Introduces iPhone 5 With $45 Unlimited Everything: What’s The Catch?

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.