Buying new cell phone

[Bill Gates Jr.]

This concerns buying a new unlocked Samsung phone for my daughter, but should also apply to my next iPhone as well. She has a Samsung 5 something which is too old to trade in but she is used to the Android operating system. I believe it is better to buy the phone outright, then to buy with a 24 month contract with Verizon. Does that make sense, especially if you will be sticking with Verizon for the next two years anyway? I understand the future value of money and all the economics that can be calculated to blow your mind, but I just want to have a phone without having the hassle of being beholden to a carrier.
I have the simplest plan for my iPhone, $30 per month for 500 MB per month. Heavy user I am not. I mainly use it as a phone. Waze when traveling. If I'm stuck waiting in the Drs office i may check the news. I do some texting. In about 3 years, I have never ran over my usage. I use my iMac for mail, news, etc. My daughter, like most of the younger generations prefer their cell phones for most everything. The screen is so %$&@*#ing small!!

 

[Raz0rEdge]

Technically it doesn't matter, if you have the money to buy it outright, do so. If you don't, you aren't taking a loan or anything for the device, since the total cost is just spread out over the 24 months or whatever.

You don't get a discount for going down the installment route, nor are you penalized for wanting to leave Verizon. You'll just have to pay out of the rest of the value in one shot to close the account.

 

[Cr00zng]

Paying up front or not is a personal choice; the cost is the same, if you stay with the same cell company for two years. If the screen is too small, get a new smartphone that has larger screen.

For me, like for most people, it does not make sense to pay the full price upfront. The last time I've changed wireless company was three or four years ego and will sign the two years contract with the same company, if my iPhone is replaced.

My current plan is also $30/month with unlimited data download, calls and text. The upload transfer rate is limited from the iPhone directly and for the personal hotspot transfer, but I can live with that.

 

[badshoehabit]

I've never had a hire contract for a phone and, when buying the last one, worked out the relative cost of two years' contract v paying upfront and SIM-only deal. The latter won by quite a bit, especially as I'm not precious about having the latest model.

Phones are cheaper in the USA than UK but your mobile contracts seem astronomical. Bought my iphone7 three+ years ago for £630 and now have a 6gb SIM-only deal for £7 a month from Smarty on a rolling monthly contract. I get money back every month I don't use the full data allowance (which is every time).

The new 'small' iPhone12 is attractively priced and sized but mine is working well so I'll wait till it dies.

 

[Raz0rEdge]

Sue, about a decade or so ago, you couldn't get a phone in the US without a 2 year contract that gave you a "low" price by locking you in for those 2 years with hefty early cancellation fees. Then the smaller pay-as-you-go carriers began to come up and eat into that market and finally the big 4 (AT&T, T-Mobile, Verizon and Sprint) began going no-contract, unlocked phones and so on.

But the way they get you to stay on instead is to do these "convenience" things like paying for your phone over a long period of time instead of paying upfront. All of them also have the option to upgrade to a newer model once you've paid a certain amount of the phone, so technically you would just be "leasing" the phone for a year and half and then you'd trade it in to get a discount on the next phone and so on.

 

[MacInWin]

I am on the Apple iPhone Upgrade Program. Basically, it divides the cost of an iPhone into 24 chunks and you pay 1/24th each month (0% interest). After 12 months you are eligible for an upgrade where you get a new iPhone and send back the old one. Payments on the old one stop when the unit is returned, start when the new one is delivered (at the new rate, whatever that is). Pretty good program as it ends up as if you are "renting" the iPhone and get a new one every time a new model is released. It does require that you have AppleCare, which is added in, but I would get that anyway, so the bottom line is that I'm "renting" my iPhone. I've already pre-applied for a 12 Pro, get to push the final button Friday morning to place the order.

Eventually you do get to that last year, whenever that comes along. About the only reason I would be paying that last year is that I am unable to use an iPhone any more, in which case I really don't care about that last year anyway...

 

[Cr00zng]

@badshoehabit

Mobile contracts don't just seem astronomical in the US, they are astronomical when compared to the EU. Even if mine is on the low side in the US. I recall times, when the wireless companies charged for both, the incoming and outgoing calls, texts, etc. It's been awhile and they don't do it anymore, unless one has limited plan. It's a different economic model in the US, where the profit margin needs to increase Y/Y. Corporations are people too and free to do whatever they collude on, oops, decide.

My two year was over last year, but the Magenta company's update plan is basically full price of the new smartphone, or lock you in for two years. I don't plan to update my iPhone 8 Plus, despite it is really looking like an old brick, when compared to the iPhone 11.

My better half's 6s, off the contract for the last three years or so, she will get an iPhone12. We could just pay the full price and be done with it, We don't change smartphones freequently. Technology advanced so much, that holding on to one for 5-6 years is just fine.

I'll look in to the Apple iPhone Upgrade Program, thanks @MacInWin....

 

[MacInWin]

Cr00zng, the way I look at it is that I get a brand new phone each year for 50% of the price. (I only pay 12 payments, then upgrade). Eventually I'll have to pay full price for the last one in the chain but in the meantime, 50% ain't bad, and I have no contracts with any cell provider, so I can change whenever I want to whatever I want.

 

[Cr00zng]

Thanks Jake...

I've started to look in to the program, but your summary is great, right to the "meat" of the program. It's not bad and certainly would go for it, if I'd want to have a new iPhone every year.

Cost of the new iPhones and the cell provider would cost me about 70-80 bucks per month. As oppose to just the 30 bucks I pay now for the carrier. I'll just go for paying the Magenta company for the iPhone for two years and keep it for another 3-4 years.