How to buy a new phone for less without paying more.
Are you in the market for a new phone, or just want to get the latest and greatest? Either way, you’re sure to come across seemingly incredible offers from major carriers offering heavily discounted if not free phones, including the highest-end versions of the newest models. With the new iPhone 15 hitting the shelves, now might be a great time to upgrade what you’ve got. And you’ll want to get the best price for it, of course.
That’s easier said than done these days. The major three carriers — AT&T, T-Mobile, and Verizon — are offering up to $1,000 off the price of iPhones and Androids, which covers the price of most of them entirely, from an iPhone 15 Pro to a Samsung Galaxy Z Flip 5. Their manufacturers are offering big (though not as big) discounts, too. Meanwhile, a herd of low-cost carriers are offering phones for full price, but throwing in big service discounts with a purchase.
For most of us, a phone is an important and expensive purchase. Any discount is welcome, and free is very tempting. But the biggest discounts might not be the best deals, depending on your needs and, of course, the desires of whoever’s offering them in the first place.
Back in the day, your iPhone purchase price was largely subsidized by your carrier when you agreed to a years-long contract. End that contract early and you were on the hook for what could be a considerable cancellation fee. As iPhone prices have gone up, those arrangements have been phased out … sort of. Instead, your phone purchase is financed by the carrier, interest-free, and you’re paying it off in monthly installments on your phone bill for the next several years. But the carrier also gives you bill credits that can be as much as those installments, making it seem as though the phone is cheap or free.
Here’s the catch: To get the full discount, you have to trade in your old phone, and in most cases you’ll get a smaller discount for older or broken devices; if you switch to a different carrier or downgrade your plan before those installments end, you’re on the hook for paying whatever’s left — no more bill credits for you. While AT&T evenly distributes the entire discount across a 36-month term, Verizon and T-Mobile give you a chunk of your credit upfront (that’s the trade-in) and finance the remainder. That means you’ll owe them less money if you change providers or plans early. If you stay with the same carrier and plan until the phone is paid off, it won’t make a difference.
“It may be a great deal, especially if you were getting ready to upgrade,” Teresa Murray, consumer watchdog for Public Interest Research Group, told Vox. “But not necessarily for everyone.”
It is great for the carriers. Even if they lose money upfront by funding part of those phones (they make some money back from selling the trade-ins off to refurbishers, so they’re not losing the entire discount here), they make it back by keeping their customers effectively locked in for several years and upselling them on the pricier plans they have to get to qualify for the full discount. The minor differences between the three carriers’ offers might also be enough to acquire new customers. T-Mobile, for example, gives bill credits for 24 months while the others do it for 36, which means you’re on the hook for a year less. AT&T’s deal extends to some of its cheaper (but not its cheapest) plans. Verizon will give new customers full credit for any iPhone trade-in, regardless of age or condition; the others give less for older or damaged phones — that’s why these deals always say you get “up to” a certain amount off.
For carriers, this is where the real money is. When people aren’t buying as many phones as often as they used to, offering a “free” new phone is a great way to give them a push and get them on the most expensive plan.
“These companies don’t offer the supposed free iPhones because they want to be nice to you,” Murray said. “They do it for competitive reasons. They want your business long term. And they may want add-ons to make their money back, because nothing’s free.”
You can buy the phone directly from the carrier, either online or in-store. You may also be able to get them through other sellers, like the manufacturers. Apple, for instance, has “carrier deals” on its iPhone sales page that are, for the most part, the same as what those carriers are offering on their own sites. (You have to go directly to Verizon to get the new customer discount, for example.)
Apple’s site might be a good way to compare the three carriers’ deals, by the way. Some might offer you more for an older device than the others. An iPhone 11 Pro, for instance, will get you the maximum $999 credit from T-Mobile, but only $830 from AT&T and Verizon. Factor in the price of the monthly plans — including taxes and fees, which may add to that cost — you have to be on to get that seemingly better deal.
If you buy the phone from Apple’s store, make sure you hit the “finance” option, then “carrier,” and then — and this is very important because you risk not getting the deal if you don’t — make sure you expand, read, and follow your carrier’s “deal details” to the letter. That means choosing the carrier’s installment program at purchase and subscribing to an eligible plan.
You don’t have to buy a phone through a carrier. You can get it directly from a store like Best Buy or a manufacturer, and you won’t be tied to a specific plan or even a carrier if you do. You might not even have to pay full price.
That’s because device makers also want people to buy more of their phones more often, so they offer discounts if you trade in your old device. The amount of said “discount” depends on the make and condition of what you’re trading in. The highest-end and newest phone will get you the biggest credit (an iPhone 14 Pro Max currently gets you $650 from Apple and $600 from Samsung, for instance). An older or broken device will get a lot less. An iPhone 6 in great condition will get you $200 from Samsung and “free recycling” (also known as $0) from Apple. Why is Samsung offering more money for an Apple phone than Apple is? Probably because it’s hoping that’ll pay off in the long run if it converts an Apple customer to Samsung.
And no, the manufacturers aren’t losing as much (or possibly anything) from those credits as you might think, because they turn around and sell the old phones off to refurbishers. And if you have an Apple Card, you’ll get 3 percent cashback on your Apple purchase because Apple is incentivizing people to get its credit card and spend money with it — money that Apple then gets a cut of.
If you don’t need a cellphone plan with all the bells and whistles, you might want to consider a cheaper alternative. Mobile virtual network operators like Mint Mobile and Visible offer pre-paid plans and use the major carriers’ networks. Some are owned by those major carriers; others pay for the use of their networks. You can get plans with data caps or, for slightly more, unlimited plans. The drawback: You might find that your data speeds aren’t as good as with the major carriers, which understandably give their customers priority. So if you need high data speeds and live in a congested area, this might not be the carrier for you.
“The comparison I think about is shopping name brands versus store brands,” Murray said.
Tom’s Guide and Consumer Reports have some good reviews of these carriers’ pros and cons. Just make sure the prices are still current, since Consumer Reports’ is from 2022 and things may have changed.
The low-cost carriers may offer barely there deals, like a few months of free service, if you buy phones through them. But if you have a device to trade in, you’re probably best served by buying it from the manufacturer and getting a trade-in credit, then taking it to a low-cost carrier and signing up.
If the conditions are right, then the major carrier deals are mutually beneficial. If you’re planning to stick with a carrier for at least a few years, want or need the most expensive plans with the various bells and whistles, and have a relatively new model phone to trade in, congratulations: Your phone is free, aside from any taxes and activation or connection fees! (One exception: Verizon, which is offering existing customers less than the other two, and new customers potentially more — they can trade in any iPhone in any condition and still get the full $1,000 credit.)
But if you don’t want to be tied to one carrier or don’t need everything the priciest plans offer, you might end up paying less in the end when you pay more in the beginning. The money you save with a cheaper plan over the next two or three years may well be more than what the major carriers offered.
That said, trying to do the math and keep track of all of those deals to figure out where you come out on top is tricky. WalletHub has a cellphone savings calculator that makes this easier — just make sure that you’re putting in the total price, including taxes and fees, of the devices and monthly charges.
Now that the 15s are out, new 14s are outdated and cost less. You can still get them for free or at a reduced cost through the same carrier deals if you jump through all the aforementioned hoops, including trading in your old phone.
But don’t sleep on refurbished models, which most manufacturers and carriers offer. You won’t get the trade-in deals with them, but they are cheaper to buy outright than the new devices. Apple’s refurbished devices look brand new, have some new components (like the battery), and come with the same year-long warranty the new devices do.
In the end, carriers and device manufacturers hire lots of people to figure out the best deal for them. Make sure it’s the best deal for you, too.
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