Tags: installment plans, iPhone, iPhones, Smart Phone, Smart Phones, Subsidies for smart phones, Subsidized phones
For most of us, the cost of getting a new smart phone is too expensive. A new iPhone costs anywhere from $649 to $949. I have always depended on getting my phone every two years with a subsidy from my cell phone company when I sign a new two-year contract. The subsidy brings the price down to $200 to $500 on that new iPhone. Those subsidies are why cell phone companies say our bill is so high.
Now, things are changing in the cell phone market. Cell phone companies are doing away with subsidies.
The new trend is installment plans with all four major carriers offering different versions of these plans. This allows someone to purchase a new phone with as little as $0 down and make payments which are added to their monthly phone bill. T-Mobile and Verizon plans are slightly lower without the subsidies. However, a recent Wall Street Journal article pointed out it will end up costing consumers more to get a phone on an installment plan. The worst part of installment plans may be that the monthly phone bill probably will not be going down enough to cover the cost of those installment payments and you may end up paying an even higher bill each month.
It depends on your needs.
Installment plans may also create more competition and finally bring down the monthly cost of having a cell phone with internet access. Without subsidies, we may need to get a little more life out of our current phone before getting that upgrade. Whether the competition brings costs down or not, we will need to be savvier about choosing a cell phone carrier, so do your research before you buy!
Finally, do not forget you can sell your old smart phone and make some money. This can help offset some of the cost of purchasing a new phone should you choose a subsidy. One easy place to sell your old smart phone is at gazelle.com. They make it easy — just follow a couple of links and you are done. Gazelle will send you a box for your phone to send back with the postage paid. You will either receive a check, or even quicker, you can get an Amazon credit.
David is the Manager of Adaptive Technology at Second Sense and an avid iPhone user.
David Flament, thanks for sharing such an informative article