Do you buy cellphone outright or pay over 2 years?

Questions on how we spend our money and our time - consumer goods and services, home and vehicle, leisure and recreational activities
Housedoc
Posts: 473
Joined: Thu May 24, 2018 4:25 pm
Location: Alabama

Re: Do you buy cellphone outright or pay over 2 years?

Post by Housedoc » Fri Jul 19, 2019 12:18 pm

My son is a user on my account. Using his money we were able to get a iPhone X at Sam's club that included a $150 gift card to Sam's. Since I use Sam's for my prescriptions, I traded him credit towards his payoff. I set him up 6 months of payments to me and I will pay his phone off. Check Sam's or Costco for nice rebates.

Jags4186
Posts: 4073
Joined: Wed Jun 18, 2014 7:12 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by Jags4186 » Fri Jul 19, 2019 12:20 pm

I don’t know, it seems like a lot of people are missing the forest for the trees. People are excited about about free financing on a $750 purchase yet are paying $80, $90, $100+/mo for phone service. A $750 loan thrown into the current highest yielding savings account of 2.57% will generate you $19.28 interest over 2 years. Meanwhile, if you looked around and purchased your phones outright you’d likely be able to save $20, $30, $40 or more, every month, on a different plan that doesn’t offer free financing.

Presintense
Posts: 251
Joined: Thu Nov 06, 2014 1:58 pm
Location: "Somewhere in the middle of America"

Re: Do you buy cellphone outright or pay over 2 years?

Post by Presintense » Fri Jul 19, 2019 12:22 pm

Outright. Under $300. Mvno service. Why do it any other way?
Performance = Potential - Distraction

DaftInvestor
Posts: 4842
Joined: Wed Feb 19, 2014 10:11 am

Re: Do you buy cellphone outright or pay over 2 years?

Post by DaftInvestor » Fri Jul 19, 2019 12:24 pm

Jags4186 wrote:
Fri Jul 19, 2019 12:20 pm
I don’t know, it seems like a lot of people are missing the forest for the trees. People are excited about about free financing on a $750 purchase yet are paying $80, $90, $100+/mo for phone service. A $750 loan thrown into the current highest yielding savings account of 2.57% will generate you $19.28 interest over 2 years. Meanwhile, if you looked around and purchased your phones outright you’d likely be able to save $20, $30, $40 or more, every month, on a different plan that doesn’t offer free financing.
My plan charges the same regardless of whether you BYOD or finance a phone through them.

IMO
Posts: 702
Joined: Fri May 05, 2017 6:01 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by IMO » Fri Jul 19, 2019 12:25 pm

I don't have a love affair with my phone, so I buy it outright and the recent one I bought was $200 which seems to work fine to do photos/video's/app's etc.

I also do physical activities that seem to constantly put my phone as risk for cracking the glass and I don't want to carry a phone as large as a tablet around with me all the time. I also spent $125 on a Samsung tablet (paid outright) for when I want to have a tablet sized screen to look when traveling, etc.

Trader Joe
Posts: 1432
Joined: Fri Apr 25, 2014 6:38 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by Trader Joe » Fri Jul 19, 2019 12:27 pm

Admiral wrote:
Fri Jul 19, 2019 9:09 am
Since phones can now be financed at 0% (the full price is spread over 24 equal payments), I'm wondering how Bhs approach this.

Assuming that paying the full price of a $700-$900 iPhone in not a financial hardship, for example, do you just buy it and have a monthly bill that's $27-$32 less per month than it would be if the cost was spread out?

Is there any advantage (financial or otherwise) in paying the full cost upfront?

I've usually felt that if someone's willing to give me 0% financing it's silly not to take it. But maybe I'm missing something. The only thing I can think of is that if you own the phone, you have the option of selling (or trading) it earlier in its life, thus recouping some of its value. But, of course, the savings usually just goes to a new phone!
I always purchase everything in full. No financing. Nothing like that at all. 0% financing means nothing to me and is not in any way tempting. I am debt free and I always will be. This is how you build wealth.

The feeling associated with being debt free is liberating. Best of luck.

User avatar
AerialWombat
Posts: 982
Joined: Tue May 29, 2018 1:07 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by AerialWombat » Fri Jul 19, 2019 12:28 pm

I purchase iPhones that are several model years past, and keep about 2 years. I buy either refurbished units or direct from Apple when they closeout last inventory of an old model. Usually spend $200-$300. Always unlocked, and I use them on a MVNO. Typical mobile bill is $10-$20 a month.
“Life doesn’t come with a warranty.” -Michael LeBoeuf

Jags4186
Posts: 4073
Joined: Wed Jun 18, 2014 7:12 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by Jags4186 » Fri Jul 19, 2019 12:37 pm

DaftInvestor wrote:
Fri Jul 19, 2019 12:24 pm
Jags4186 wrote:
Fri Jul 19, 2019 12:20 pm
I don’t know, it seems like a lot of people are missing the forest for the trees. People are excited about about free financing on a $750 purchase yet are paying $80, $90, $100+/mo for phone service. A $750 loan thrown into the current highest yielding savings account of 2.57% will generate you $19.28 interest over 2 years. Meanwhile, if you looked around and purchased your phones outright you’d likely be able to save $20, $30, $40 or more, every month, on a different plan that doesn’t offer free financing.
My plan charges the same regardless of whether you BYOD or finance a phone through them.
My point is that the free financing is only available on the most expensive services. I’m not one of those folks who says you should be able to get by on 100mb of data and WiFi...but my wife and I each have 15gb of data on Verizon Prepaid and unlimited talk and text and we pay anywhere from $48-$55/mo for service. Sometimes less if I can get a good coupon.

To get that much data on Verizon postpaid would require us to have plans that cost a total of $150/mo + tax.

User avatar
dm200
Posts: 22872
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Do you buy cellphone outright or pay over 2 years?

Post by dm200 » Fri Jul 19, 2019 12:43 pm

Jags4186 wrote:
Fri Jul 19, 2019 12:37 pm
DaftInvestor wrote:
Fri Jul 19, 2019 12:24 pm
Jags4186 wrote:
Fri Jul 19, 2019 12:20 pm
I don’t know, it seems like a lot of people are missing the forest for the trees. People are excited about about free financing on a $750 purchase yet are paying $80, $90, $100+/mo for phone service. A $750 loan thrown into the current highest yielding savings account of 2.57% will generate you $19.28 interest over 2 years. Meanwhile, if you looked around and purchased your phones outright you’d likely be able to save $20, $30, $40 or more, every month, on a different plan that doesn’t offer free financing.
My plan charges the same regardless of whether you BYOD or finance a phone through them.
My point is that the free financing is only available on the most expensive services. I’m not one of those folks who says you should be able to get by on 100mb of data and WiFi...but my wife and I each have 15gb of data on Verizon Prepaid and unlimited talk and text and we pay anywhere from $48-$55/mo for service. Sometimes less if I can get a good coupon.

To get that much data on Verizon postpaid would require us to have plans that cost a total of $150/mo + tax.
Our plan is a "family" plan on Sprint for about $25 per month per phone for the cell service. DW and I paid for out Moto4 phines at $6 per month each - and then, after 18 months - paid off at about $36 per phone.

User avatar
Hector
Posts: 1233
Joined: Fri Dec 24, 2010 2:21 pm
Contact:

Re: Do you buy cellphone outright or pay over 2 years?

Post by Hector » Fri Jul 19, 2019 12:45 pm

Admiral wrote:
Fri Jul 19, 2019 11:40 am
Thanks for all the replies. There's really very little "hassle" in the 24 payment plan thru Verizon: it's just a charge tacked on.

Our situation is that none of the iphones were the "new model" when we got them: We're talking two 6S phones and one 7. So, while they were "new" as in new out of the box, they are pretty old technology now (in fact the 6S will not even support the next version of iOS).

I've already had to replace one battery (cost: $59). The phones are def ripe for replacement even though they are only two years old. Would that they would last another year, but I don't think they will.

I've had some luck buying from Apple's refurb store (though not phones) but the savings is usually on the order of $100 on non-current phones...not a lot in the scheme of things.

I think maybe the best strategy is to look for a buy one get one sale and jump on it.

We could save a few bucks using T-Mobile but their coverage was awful for the year we had it. Sticking to Verizon. It looks like BYOD prepay would be the cheapest option: $83/mo for 15GB shared plus tax and fees. We pay about $130/mo now (with taxes and fees, postpaid) so the difference would not be a lot. Maybe $30/mo.
How is your standard of living is decreasing by not using newest iPhones?

mbasherp
Posts: 280
Joined: Mon Jun 26, 2017 8:48 am

Re: Do you buy cellphone outright or pay over 2 years?

Post by mbasherp » Fri Jul 19, 2019 12:59 pm

In the case of DW and I, doing payments at 0% was the only way to qualify for the BOGO deal at the time. Upon reading the fine print, if we were to pay off the balance early, we would have to pay for two phones instead of one.

I thought it was very odd, but I’ll also take full advantage of the cheapest option.

DaftInvestor
Posts: 4842
Joined: Wed Feb 19, 2014 10:11 am

Re: Do you buy cellphone outright or pay over 2 years?

Post by DaftInvestor » Fri Jul 19, 2019 1:14 pm

mbasherp wrote:
Fri Jul 19, 2019 12:59 pm
In the case of DW and I, doing payments at 0% was the only way to qualify for the BOGO deal at the time. Upon reading the fine print, if we were to pay off the balance early, we would have to pay for two phones instead of one.

I thought it was very odd, but I’ll also take full advantage of the cheapest option.
Why is the deal odd? They are holding you as a customer over the time-frame of the payments. That is the real incentive for the free financing.
Folks above seem to think "If they give you free financing you must be paying more" - not necessarily true.

FireSekr
Posts: 1040
Joined: Tue Apr 02, 2013 9:54 am

Re: Do you buy cellphone outright or pay over 2 years?

Post by FireSekr » Fri Jul 19, 2019 1:46 pm

If you're using a carrier that offers 0% financing and have no desire to switch to a lower cost carrier, it makes no sense to buy outright, may as well just do the 0% financing. They include the cost with your normal wireless bill anyway so it's not like you have to make any additional effort to pay a second bill. I have t-mobile and financed my iPhone Xs with their 0% offer even though I could easily afford to pay cash. If I decide to switch carriers or cancel service I am required to just pay the balance of the phone.

new2bogle
Posts: 1480
Joined: Fri Sep 11, 2009 2:05 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by new2bogle » Fri Jul 19, 2019 2:00 pm

My most recent phone purchase required me to pay for it monthly and then the carrier would discount it for the same amount monthly, but only over 24 months. There is no contract per se, but if I leave the carrier then I owe the remainder left on the phone, so essentially I'm "locked in" for 24 months if I want the phone for free.

Shallowpockets
Posts: 1500
Joined: Fri Nov 20, 2015 10:26 am

Re: Do you buy cellphone outright or pay over 2 years?

Post by Shallowpockets » Fri Jul 19, 2019 2:00 pm

OP.
At the very least I would require my teens to purchase their own phones.
Since you noted earlier, I will spare you the why need such expensive phones conversation.

We bought two Moto G5s, unlocked, so we can use them with foreign SIM cards. We are on the MINT plan. They offer phones also. With an unlocked phone you have more choices.

stoptothink
Posts: 6791
Joined: Fri Dec 31, 2010 9:53 am

Re: Do you buy cellphone outright or pay over 2 years?

Post by stoptothink » Fri Jul 19, 2019 2:10 pm

mmmodem wrote:
Fri Jul 19, 2019 12:02 pm
stoptothink wrote:
Fri Jul 19, 2019 9:14 am
I see no point in "financing" something that we are usually buying for <$200. If we just had to have every iteration of the latest $1k+ Iphone, maybe we'd consider it.
Oppositely, I see no point in paying off something I can finance at 0%. The difference in interest is negligible. But I will pick up a quarter if I see it on the street. I've always financed my phone's. Literally, just last month, I paid off 2 LTE tablets that I financed $10 each a month for 24 months.

I did pay off one of my phone's early one time because I wanted it unlocked to give to a friend on a different network. (The BOGO promotion required the purchase of 2 phones.) T-Mobile required full payment before unlocking the phone.
The issues is, as mentioned several times in this thread, the 0% financing is through the service providers. You can find unlocked phone cheaper through other means. Me, I'd rather pay $189 upfront than 0% on $250 over the next 2yrs. That was the cost differential when I last purchased a phone.

Jags4186
Posts: 4073
Joined: Wed Jun 18, 2014 7:12 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by Jags4186 » Fri Jul 19, 2019 2:21 pm

dm200 wrote:
Fri Jul 19, 2019 12:43 pm

Our plan is a "family" plan on Sprint for about $25 per month per phone for the cell service. DW and I paid for out Moto4 phines at $6 per month each - and then, after 18 months - paid off at about $36 per phone.
Sprint definitely has the cheapest post paid pricing. In fact, for a while (maybe still?) there was a promo for free* (you had to pay taxes and 911 fee) service for a year that apparently was extendable multiple times.

That said, I find Sprint service unacceptable so I choose to pay more for Verizon.

Gnirk
Posts: 1162
Joined: Sun Sep 09, 2012 3:11 am
Location: Western Washington

Re: Do you buy cellphone outright or pay over 2 years?

Post by Gnirk » Fri Jul 19, 2019 4:02 pm

I use the two-year program to pay for my new phone when I think I "need" one, and my DH gets my old phone. I am with a major carrier on a family plan that includes our adult children (they reimburse us for their share) because it is less expensive for four people than the individual plans.

The others on the plan also purchase their new phones through the two-year program, and reimburse us for that cost as well.

User avatar
jabberwockOG
Posts: 1853
Joined: Thu May 28, 2015 7:23 am

Re: Do you buy cellphone outright or pay over 2 years?

Post by jabberwockOG » Fri Jul 19, 2019 4:30 pm

FeesR-BullNotBullish wrote:
Fri Jul 19, 2019 10:59 am
I buy brand new unlocked iPhones every few years when the new models come out in Sept/Oct. I buy one for my wife and one for me. It's painful, but I like owning what we have. The financial advantage is that we stretch our phones as long as we can; our upgrade cycle is every three to four years instead of every two years. I'm getting ready to bite the bullet in a few months and upgrade from our 6s phones. I might buy just one this time and stagger our new phone purchases because only one of our phones is buggy, we'll see.
For anyone that keeps iphones for several years like we do, suggest holding off buying latest iphone until next year when the new iphones will support 5g. My 6s still runs great on our very low cost Consumer Cellular plan (2 lines 45/month). No need to upgrade until 5g starts rolling out and more 5g phones are released.
Last edited by jabberwockOG on Fri Jul 19, 2019 5:26 pm, edited 1 time in total.

apple44
Posts: 60
Joined: Tue Feb 19, 2019 3:22 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by apple44 » Fri Jul 19, 2019 4:45 pm

Finance!!!

I never finance any purchase other than my home (I paid cash for used cars too) and naturally I bought my iPhone with cash. But my mom used financing to purchase her iPhone. After just a couple of months after her purchase, I decided to switch to T-mobile family plan from Verizon for cheaper monthly charge and T-Mobile paid off my mom’s phone! I couldn’t believe it at first — there was still almost $700 left to pay to Verizon and T-mobile just paid it all off!!!

It was a couple of years back. Not sure if they still do this but I feel cell phone service providers are still competing furiously and this kind of offer may still come along.

MathWizard
Posts: 3699
Joined: Tue Jul 26, 2011 1:35 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by MathWizard » Fri Jul 19, 2019 4:48 pm

Buy and run them till they die, like everything else.

Just got a new pixel 3a XL to replace a Nexus5x
The Nexus 5x was $250 for 32 GB model.

My new phone was 480.

The iPhone 5s' that we still use were$200 each.

My service is $20/month +$10/GB I use.

The iPhones are tracphones that keep building up minutes
and data at only$100/yr ( $8.33/month)

LiterallyIronic
Posts: 1347
Joined: Sat Dec 05, 2015 10:36 am

Re: Do you buy cellphone outright or pay over 2 years?

Post by LiterallyIronic » Fri Jul 19, 2019 5:26 pm

Admiral wrote:
Fri Jul 19, 2019 9:09 am
Is there any advantage (financial or otherwise) in paying the full cost upfront?
Simplicity. I only buy cell phones every six years (2006, 2012, 2018), but I just swipe my credit card for the 1% cash back and be done with it. I'd do the same thing for couches, TVs, or whatever, even if they offered a 0% interest rate. I just want to complete my transaction and move on with my life. The only thing I couldn't do this for was my house, but, hey, can't have everything.

Caduceus
Posts: 2127
Joined: Mon Sep 17, 2012 1:47 am

Re: Do you buy cellphone outright or pay over 2 years?

Post by Caduceus » Fri Jul 19, 2019 5:57 pm

You can get new cellphones behing the technology curve on Ebay for really great prices. I just bought a completely new Iphone SE on Ebay for $125. It doesn't seem much different from the Iphone 5S it replaced, so I'm not sure what the hype is with all these newer and newer models!

alter
Posts: 250
Joined: Thu Feb 26, 2015 11:27 pm
Location: Chicago

Re: Do you buy cellphone outright or pay over 2 years?

Post by alter » Fri Jul 19, 2019 6:44 pm

The reason they offer 0% is they want to lock you into a contract for two years with fees if you break it. Plus often the phone you are financing is locked to their network so you cant use it on other networks even when the contract ends. They make most their profit off the plan, not the phone. I pay 30 per month on a prepay line with no contract, unlimited data with an unlocked phone i can use anywhere in the world.

bloom2708
Posts: 7089
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: Do you buy cellphone outright or pay over 2 years?

Post by bloom2708 » Fri Jul 19, 2019 7:21 pm

Caduceus wrote:
Fri Jul 19, 2019 5:57 pm
You can get new cellphones behing the technology curve on Ebay for really great prices. I just bought a completely new Iphone SE on Ebay for $125. It doesn't seem much different from the Iphone 5S it replaced, so I'm not sure what the hype is with all these newer and newer models!
The iPhone SE is 3 years and a few months old (March 2016)

Hard to compare to an XR or XS. I don’t like the strep prices. But, function and speed wise they are Ferrari’s to Kias.
"People want confirmation, not advice" Unknown | "We are here to provoke thoughtfulness, not agree with you" Unknown | Four words: Whole food, plant based

Katietsu
Posts: 2709
Joined: Sun Sep 22, 2013 1:48 am

Re: Do you buy cellphone outright or pay over 2 years?

Post by Katietsu » Fri Jul 19, 2019 10:36 pm

I usually at least start out on the monthly payment plan. This is not because of the interest. It is because the best deals- BOGO, $300 Sams Club card, etc.- have always required signing up for the payment plan. Sometimes, you can then pay it off right way and sometimes you will lose hundreds of dollars by doing so.

Katietsu
Posts: 2709
Joined: Sun Sep 22, 2013 1:48 am

Re: Do you buy cellphone outright or pay over 2 years?

Post by Katietsu » Sat Jul 20, 2019 9:12 am

Admiral wrote:
Fri Jul 19, 2019 11:40 am

Our situation is that none of the iphones were the "new model" when we got them: We're talking two 6S phones and one 7. So, while they were "new" as in new out of the box, they are pretty old technology now (in fact the 6S will not even support the next version of iOS).
Despite rumors to the contrary, iOS 13 does officially support the iPhone 6s and iPhone SE. I still think understand replacing them in the fall when the deals roll out. I am concerned that if I skip replacing the 6s units in our family in the fall, I will end up needing to replace them later at higher cost. On the other hand, new batteries for $29 in December made a big difference.

Smoke
Posts: 487
Joined: Thu Aug 30, 2018 12:45 pm
Location: Saturn

Re: Do you buy cellphone outright or pay over 2 years?

Post by Smoke » Sat Jul 20, 2019 9:17 am

Purchased outright, $49 Samsung orbit.
It's a phone.
Arguing for the sake of arguing is something I am not going to engage in.

User avatar
JoMoney
Posts: 8131
Joined: Tue Jul 23, 2013 5:31 am

Re: Do you buy cellphone outright or pay over 2 years?

Post by JoMoney » Sat Jul 20, 2019 9:23 am

I'm currently using an Alcatel A50 5085G (android) that I bought on Amazon for $79.99 (it looks like it currently sells for $92)
My carrier is a T-Mobile MVNO called "Speedtalk Mobile"
For $99 a year (prepaid) I get unlimited texting, 500 minutes talk, and 1GB data each month... next year I might move to one of their cheaper plans because I don't use my phone anywhere near that much. I could use the data, but I don't need to since WiFi is typically available.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

Caduceus
Posts: 2127
Joined: Mon Sep 17, 2012 1:47 am

Re: Do you buy cellphone outright or pay over 2 years?

Post by Caduceus » Sat Jul 20, 2019 10:14 am

Katietsu wrote:
Sat Jul 20, 2019 9:12 am
Admiral wrote:
Fri Jul 19, 2019 11:40 am

Our situation is that none of the iphones were the "new model" when we got them: We're talking two 6S phones and one 7. So, while they were "new" as in new out of the box, they are pretty old technology now (in fact the 6S will not even support the next version of iOS).
Despite rumors to the contrary, iOS 13 does officially support the iPhone 6s and iPhone SE. I still think understand replacing them in the fall when the deals roll out. I am concerned that if I skip replacing the 6s units in our family in the fall, I will end up needing to replace them later at higher cost. On the other hand, new batteries for $29 in December made a big difference.
Why would you need to replace them at a higher cost if you wait? I don't understand. Don't the prices of these phones keep depreciating over time? I have stuff on my watch list on Ebay, and the Iphone SE was like $250, then $200, then $150, and now about $120 which is when I finally bought it. It is a little faster than my Iphone 5S and the camera is better. And I find it amazing that it was selling at the price that it did 3 years ago.

02nz
Posts: 2957
Joined: Wed Feb 21, 2018 3:17 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by 02nz » Sat Jul 20, 2019 10:21 am

Caduceus wrote:
Fri Jul 19, 2019 5:57 pm
You can get new cellphones behing the technology curve on Ebay for really great prices. I just bought a completely new Iphone SE on Ebay for $125. It doesn't seem much different from the Iphone 5S it replaced, so I'm not sure what the hype is with all these newer and newer models!
5S will no longer get iOS updates starting this fall. And the SE is a much, much faster phone - about 2x the processing speed, more RAM (not to be confused with storage), and faster storage. I expect the SE (along with the 6S) will get iOS updates for at least another 2, maybe 3 years.

mpsz
Posts: 380
Joined: Sat Jan 09, 2016 7:11 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by mpsz » Sat Jul 20, 2019 10:22 am

I get the latest iPhone each year... one of a small handful of indulgences I enjoy outside the Bogleheads philosophy. I'm a tech/gadgets guy, software engineer by trade, etc.

I'm on Apple's iPhone Upgrade Program. Costs me the same to finance versus buy outright, and I have the option of trading in each year without any additional cost (except Verizon's customer loyalty penalty activation fee). Though, this is looking like the first year there will be absolutely no reason to upgrade.

Katietsu
Posts: 2709
Joined: Sun Sep 22, 2013 1:48 am

Re: Do you buy cellphone outright or pay over 2 years?

Post by Katietsu » Sat Jul 20, 2019 10:30 am

Caduceus wrote:
Sat Jul 20, 2019 10:14 am
Katietsu wrote:
Sat Jul 20, 2019 9:12 am
Admiral wrote:
Fri Jul 19, 2019 11:40 am

Our situation is that none of the iphones were the "new model" when we got them: We're talking two 6S phones and one 7. So, while they were "new" as in new out of the box, they are pretty old technology now (in fact the 6S will not even support the next version of iOS).
Despite rumors to the contrary, iOS 13 does officially support the iPhone 6s and iPhone SE. I still think understand replacing them in the fall when the deals roll out. I am concerned that if I skip replacing the 6s units in our family in the fall, I will end up needing to replace them later at higher cost. On the other hand, new batteries for $29 in December made a big difference.
Why would you need to replace them at a higher cost if you wait? I don't understand. Don't the prices of these phones keep depreciating over time? I have stuff on my watch list on Ebay, and the Iphone SE was like $250, then $200, then $150, and now about $120 which is when I finally bought it. It is a little faster than my Iphone 5S and the camera is better. And I find it amazing that it was selling at the price that it did 3 years ago.
Over the long run, sure. But, new iPhones follow a pattern in the short run. If you need a new iPhone on Halloween, there will be no bargains. You will be stuck paying full price. On the first day of fall or during the holiday season, you can typically get a $300 gift card or BOGO or some other deal.

I really like the iPhone SE as a phone and as a audio player. But the screen gets limiting when you start using it many hours a day for almost all your tech needs as you decide it is not worth it to go to the tablet or laptop; to have recipe books or get the physical newspaper; to own a separate clock, camera or scanner, etc.

nexesn
Posts: 136
Joined: Mon Jan 01, 2018 9:15 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by nexesn » Sat Jul 20, 2019 10:34 am

I buy outright; and from Apple (Unless, and it rarely happens, the cell company offers some upgrade or purchase deal). I like that by buying the phone outright it is unlocked and that I also don't have to think about a debt that I am paying (prefer to be as debt free as possible).

Financially, it's probably better to invest the $800 - $1000 over the course of two years... but I really don't like having list of lingering debts I need to think about. And, as I said before, it's nice to have the phone unlocked.

terran
Posts: 1037
Joined: Sat Jan 10, 2015 10:50 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by terran » Sat Jul 20, 2019 10:34 am

We buy used iPhones 2-3 years after the model's release date for ~$300 outright and plan to keep them for 5 years or so.

lazydavid
Posts: 2639
Joined: Wed Apr 06, 2016 1:37 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by lazydavid » Sat Jul 20, 2019 10:46 am

Caduceus wrote:
Fri Jul 19, 2019 5:57 pm
You can get new cellphones behing the technology curve on Ebay for really great prices. I just bought a completely new Iphone SE on Ebay for $125. It doesn't seem much different from the Iphone 5S it replaced, so I'm not sure what the hype is with all these newer and newer models!
The reason you didn't notice a difference is because you bought basically the same phone, rather than upgrading. The iPhone 5S was a flagship at launch, and the SE was a low-end budget model introduced as a direct replacement for the 5S when it was discontinued.

Dottie57
Posts: 7486
Joined: Thu May 19, 2016 5:43 pm
Location: Earth Northern Hemisphere

Re: Do you buy cellphone outright or pay over 2 years?

Post by Dottie57 » Sat Jul 20, 2019 11:47 am

I pay outright as I don’t want to be tied down to any provider .

telecaster
Posts: 59
Joined: Wed Mar 21, 2018 9:12 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by telecaster » Sat Jul 20, 2019 11:51 am

Outright, 1 or 2 gens old refurbished off amazon

rapscallion
Posts: 127
Joined: Sun Jan 06, 2008 1:48 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by rapscallion » Sat Jul 20, 2019 12:14 pm

Admiral wrote:
Fri Jul 19, 2019 11:40 am
...Our situation is that none of the iphones were the "new model" when we got them: We're talking two 6S phones and one 7. So, while they were "new" as in new out of the box, they are pretty old technology now (in fact the 6S will not even support the next version of iOS)...
Just an FYI, the 6s *will* receive iOS 13 in September.
https://9to5mac.com/2019/06/03/iphone-i ... patibility

drgenefish
Posts: 59
Joined: Sun Feb 12, 2017 2:52 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by drgenefish » Sat Jul 20, 2019 12:56 pm

Just mentally I can’t bring myself to take out debt for a phone.

What’s your best case for investing your phone money and coming out ahead on a 0% loan 2 years later?

$50? Nah. I feel better without debt than I do potentially making $50.

I’m also more likely to keep a phone longer if I know I need to pull out $1,000 when I want a new one. So I’ll probably save in the long run just keeping my phones longer.

RobLyons
Posts: 531
Joined: Tue Oct 31, 2017 12:55 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by RobLyons » Sat Jul 20, 2019 1:10 pm

I pay in full from Apple because I do not like the feeling of being "trapped" in a contract, and I also like having an unlocked phone.
Earlier this year I traded in an old 6s+ for the XR and it was $450-$500 out the door.
I'll keep for a few years and repeat.
"Great parenting sets the foundation for a better world"

Goal33
Posts: 1097
Joined: Sun Apr 12, 2015 12:30 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by Goal33 » Sat Jul 20, 2019 1:43 pm

Life is already too complicated. I can’t be bothered financing around 1k or less. I buy it outright.
A man with one watch always knows what time it is; a man with two watches is never sure.

aednichols
Posts: 64
Joined: Mon Nov 21, 2016 4:44 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by aednichols » Sat Jul 20, 2019 1:50 pm

The institutions offering 0% financing on phones are not doing it to be nice. They know that people will buy a more expensive phone or upgrade more often if they can divide the cost into relatively small monthly payments. I think there is a behavioral advantage to always paying in full, because it guarantees that you experience the full pain of the sticker price all at once.

triggertreat
Posts: 40
Joined: Sun Jun 18, 2017 1:36 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by triggertreat » Sat Jul 20, 2019 2:02 pm

If you had the money to buy outright wouldnt the Boglehead way be to invest the money and pay the 0% interest cost monthly? :happy
Last edited by triggertreat on Sat Jul 20, 2019 2:28 pm, edited 1 time in total.

JBTX
Posts: 5712
Joined: Wed Jul 26, 2017 12:46 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by JBTX » Sat Jul 20, 2019 2:08 pm

Admiral wrote:
Fri Jul 19, 2019 11:40 am
Thanks for all the replies. There's really very little "hassle" in the 24 payment plan thru Verizon: it's just a charge tacked on.

Our situation is that none of the iphones were the "new model" when we got them: We're talking two 6S phones and one 7. So, while they were "new" as in new out of the box, they are pretty old technology now (in fact the 6S will not even support the next version of iOS).

I've already had to replace one battery (cost: $59). The phones are def ripe for replacement even though they are only two years old. Would that they would last another year, but I don't think they will.

I've had some luck buying from Apple's refurb store (though not phones) but the savings is usually on the order of $100 on non-current phones...not a lot in the scheme of things.

I think maybe the best strategy is to look for a buy one get one sale and jump on it.

We could save a few bucks using T-Mobile but their coverage was awful for the year we had it. Sticking to Verizon. It looks like BYOD prepay would be the cheapest option: $83/mo for 15GB shared plus tax and fees. We pay about $130/mo now (with taxes and fees, postpaid) so the difference would not be a lot. Maybe $30/mo.
If there is no difference in price, and buying it from the phone company and no interest I finance it. It is just added to your bill. There is no hassle.

Last time I did 2 iphone 8s BOGO with ATT. Prior to that last 2 I bought discounted at best buy, full price.

rj342
Posts: 632
Joined: Tue Apr 30, 2019 12:21 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by rj342 » Sat Jul 20, 2019 2:20 pm

1) I just dont see the utility of getting a $700-$900 new gen flagship phone, Galaxy or iPhone every year or two. Only the better camera is somewhat tempting. Might feel differently if I was a road warrior for work or had a long train ride commute every day.

2) Last couple times I bought $200-ish midrange Samsung's, currently a J7. Basically the hardware is pretty similar to the flagship phone of a couple years prior, but with latest Android OS. These I buy outright.

My first smartphone was a Samsung Galaxy S3, that I held on to for several years. After that had a Windows 10 phone that was super nice, before MS gave up on cell phones for the last time (now they make Android versions of their apps).

Adding a plug for TMobile, great priced plans, next year will get on the 55 senior plan w 2 unlimited lines cheap. Admit Mobile not the best coverage further out in the sticks. I would go w ATT or VER if a salesman.
Last edited by rj342 on Sat Jul 20, 2019 2:23 pm, edited 1 time in total.

02nz
Posts: 2957
Joined: Wed Feb 21, 2018 3:17 pm

Re: Do you buy cellphone outright or pay over 2 years?

Post by 02nz » Sat Jul 20, 2019 2:21 pm

It’s true that the financing makes it easy to pay more than one really should, but that doesn’t have to be the case if you shop carefully.

In our case we’re on the plan that was the most cost-effective for our needs regardless of promos, and the promo paid for about half the cost of two new iPhones. Buying a two-year-old used iPhone off eBay would have been about the same cost.

squirm
Posts: 2006
Joined: Sat Mar 19, 2011 11:53 am

Re: Do you buy cellphone outright or pay over 2 years?

Post by squirm » Sat Jul 20, 2019 2:28 pm

Moto has good cheap cell phones. Why waste money paying more.

Cycle
Posts: 1533
Joined: Sun May 28, 2017 7:57 pm
Location: Minneapolis

Re: Do you buy cellphone outright or pay over 2 years?

Post by Cycle » Sat Jul 20, 2019 3:08 pm

Cell phones are a great example of how paying with cash you'll end up buying less phone. Similar with houses. There are exceptions of course, but for me dw and i have a moto x4 buy one get one (2 for $400).

Dave Ramsey 101.
Never look back unless you are planning to go that way

RudyS
Posts: 1639
Joined: Tue Oct 27, 2015 10:11 am

Re: Do you buy cellphone outright or pay over 2 years?

Post by RudyS » Sat Jul 20, 2019 3:26 pm

If you use your card to buy it outright, then many credit cards will give you an extended warranty benefit.

Post Reply