5 Ways To Save On Your Next Smartphone Upgrade Or Purchase
Almost 11 years after the 2007 launch of the iPhone, smartphones have become all but essential to our daily lives. Be you a toddler, a teen, a besuited business person or a tech-savvy senior, you’re probably reading these words on the small, glowing screen of your very own smartphone.
As consumers, we’re not content with having just any smartphone. No, we want the newest, shiniest, most-app packed fad phones, and we’ll line up around the block once a year and shell out hundreds of dollars to get our hands on the latest-and-greatest in cell phone technology.
And I get it, I do. Technology is exciting, and even small upgrades to camera quality, device design and app capabilities can be a selling point. Like, how did we all live pre-iOS 9.1 before we could send our friends racially inclusive middle finger and unicorn emojis?!? I’m honestly not sure.
All joking aside, there’s nothing particularly wrong with frequent phone upgrades, but if you’re going to make it an annual investment, it pays to do your homework. So we rounded up all the best ways to upgrade on a budget.
Trade-in programs are your friend.
If you already have an old smartphone (or seven) wasting away in your junk drawer, don’t just toss it in the trash. In addition to being full of toxins that you don’t want seeping into a landfill, that hunk of outdated metal is probably worth some money! There are tons of trade-in programs that will buy your old phone from you in exchange for a gift card, store credit, a PayPal transfer or sometimes even straight-up cash.
While many of these programs are available in-store at big-box retailers, you'll find the majority of them online. These buy-back or trade-in programs will typically quote you the value of the device(s) you're looking to sell based on their make, model, and condition, then send you a box in the mail with prepaid return shipping that you'll use to send your phone or phones back to them in. In one to three weeks time, they'll send you payment for your old phone.
Buy-back & trade-in programs to consider:
My pick for best value on this list is Amazon, hands down. I’m actually looking to sell my old 64GB iPhone 5s, so I ran it through each of these sites and Amazon gave me the highest offer by a longshot. Where the other stores offered me on average about $70 cash back (albeit usually in cash), Amazon will credit my account $214.59 for sending in my old phone, which is in good, working condition. For me, an Amazon gift card is as good as cash, as I use the site daily to order everything from groceries and Prime Pantry household items to hair dye, winter coats and impractical leotards. Prices will vary based on the make and model of your old phone, so shop around and choose whatever feels right to you!
Consider upgrading to a refurbished smartphone.
Wonder where the phones you sell back or trade in end up? After they get their data wiped and their components checked and cleaned, they’re turned around and sold back to phone-hungry consumers as refurbished models.
In most cases, refurbished phones are nearly impossible to distinguish from their brand-new counterparts and are often sold for hundreds of dollars less than any fresh out of the box models. All the major phone carriers and most retailers sell "certified like-new" or "premium refurbished" smartphones that, when paired with a new or renewed contract, can be bought for as low as $50 or in some cases even given away for free!
I’ve bought refurb smartphones in the past, and I’ve never had any issues with them, just make sure wherever you’re buying from is legit. The old adage “if it looks too good to be true, it probably is” rings true for refurb phone sales. You’re not going to get an iPhone 8 for $40 unless it’s stolen or totally junked, so don’t fall into a scammer’s trap.
Do your homework on all the major carriers’ upgrade plans.
The American consumer’s desire to avoid being married to an out of date phone for the entirety of a two-year contract has been duly noted by wireless carriers, who’ve changed their contract models to better cater to frequent upgrades. AT&T, T-Mobile, Verizon and Sprint all have plans that enable customers to upgrade their phones more often. Here’s our breakdown of each plan (we used an iPhone 6s as our upgrade example across the board).
AT&T Next has a few payment plan options, access to which can vary depending on your credit. You can either buy the iPhone 6s outright for $649.99 and pay nothing for the phone month to month, or you can sign up for one of these plans:
- Next 24 -- For well-qualified buyers (aka people with good credit). $0 down, $21.67/month for a 30-month contract. You can trade up at 24 months, and there’s a $15 activation fee. With this option, you’ll have paid $520.08 for the phone by the time you’re eligible for an upgrade.
- Next 18 -- For well-qualified buyers. $0 down, $27.09/month for a 24-month contract. You can trade up at 18 months, and there’s a $15 activation fee. With this option, you’ll have paid $487.62 for the phone by the time you’re eligible for an upgrade.
- Next 12 -- For well-qualified buyers. $0 down, $32.50/month for a 20-month contract. You can trade up at 12 months, and there’s a $15 activation fee. With this option, you’ll have paid $390 for the phone by the time you’re eligible for an upgrade.
- Next with down payment -- This is the option you’ll have to pick if you’ve got less than stellar credit. $195 down, $16.25/month for a 28-month contract. You can trade up at 12 months, and there’s a $15 activation fee. With this option, you’ll have paid $390 for the phone by the time you’re eligible for an upgrade.
Our picks out of these options are Next 12 and Next with down payment, as $390 is the lowest amount you’ll be able to pay for the 6s on AT&T's network. Buying the phone outright is actually the least cost-effective plan, even though it means no monthly payments. The Next 24 is also a pretty bad deal all-around, as you’ll still be locked into two years with the same phone, and you’ll be paying almost full price by the time you’re allowed a trade-up.
Keep in mind the monthly charge here is JUST for the phone (which you will own, not lease), and doesn’t include any service package. With the iPhone 6s, the current choices for data plans are:
- 2GB for $55/month
- 5GB for $75/month
- 15GB for $115
- 20GB for $155
Lowest total yearly cost for an upgrade plan: $1,050* with the down payment plan and 2GB data (*this estimate does not include insurance, taxes or fees).
T-Mobile JUMP! & JUMP! On Demand
With AT&T, you own the phone you’re making payments on, but signing up for one of T-Mobile’s JUMP! plans will mean you’re leasing the phone in exchange for more frequent access to upgrades. With a regular JUMP! plan, you’ll pay an extra $10/month (which comes out to $240 over 24 months), but you’ll be able to upgrade your phone every time you paid off 50 percent of its retail cost (up to twice/year), and both Premium Handset Protection and Lookout Mobile Security--together a $12/value--are included in the $10/month extra fee. The iPhone 6s is listed at $649.99 retail, and the pricing to get a 16GB on this plan is as follows:
- If you have good credit -- $0 down, $27.09/month for 24 months. There’s a $15 activation fee, and you’ll have paid $325.08 by the time you’re eligible for an upgrade.
- If you are building credit -- $360 down, $12.09/month for 24 months. There’s a $15 activation fee, and you’ll have paid more than $372.09 when you decide to upgrade.
With the $360 down option, you can upgrade at literally any time. This is kind of nice if a phone you like comes out a month after you’ve signed up, but as you’ll likely have your phone for at least a few months, you’ll be paying significantly more than you would be with the $0 down plan. If you have poor credit, this is not a great option for you.
JUMP! On Demand is T-Mobile’s newest leasing plan, and it’s best for the kind of person who likes to jump from phone to phone with reckless abandon. JUMP! On Demand doesn’t cost a monthly $10 fee, but it also doesn’t come with any built-in insurance. However, what On Demand does that the regular JUMP! program doesn’t, is let you trade in your phone up to three times per year WITHOUT having to pay off half the phone first. And if you sign up and trade in an iPhone 6, 6 Plus, GS6 edge, GS6 Edge+ or Note 5, you can get a brand new 6s for $5/month. If you have nothing to trade in, it’s $27/month. Here’s the pricing chart:
If you have a phone to trade in and know you’ll be upgrading the moment the newest phone drops, this plan makes the most financial sense.
Of course, these prices also don’t include the cost of service, which are these:
- 2GB for $50/month
- 6GB for $65/month
- 10GB for $80/month
- Unlimited data for $95/month
Lowest total yearly cost for an upgrade plan: $660* with JUMP! On Demand trade-in of an iPhone 6, and 2GB data (*this estimate does not include insurance, taxes or fees). With no trade-in, the lowest total cost for a 12-month upgrade plan is $924.
Verizon’s iPhone Trade-in Program
Verizon tried out a version of T-Mobile’s JUMP! program, which was called Verizon Edge, for a few years, but it was discontinued in May 2015 in favor of this iPhone-only trade in program. If you’re interested in trying out other kinds of smartphones on a Verizon plan, you’re out of luck, but if you’re an Apple fanboy or girl, this might work for you.
You’re allowed to trade in your phone every six months, or when it’s halfway paid off. Like all the other carriers, Verizon puts the retails cost of the 16GB iPhone 6s at $649.99. Here are your payment plan options:
- If you have good credit -- $0 down, $20 activation fee, and $27.08/month for 24 months. With this option you’ll have paid $182.48 for your phone before you’re eligible for an upgrade at six months.
- If you are building credit -- $260 down, $20 activation fee and $16.24/month for 24 months. With this option you’ll have paid $377.44 for your phone before you’re eligible for an upgrade at six months.
If you have good credit and love you some iPhones, the first option is a pretty good deal. Of course, as iPhones only come out once a year, you’ll likely be waiting for more than six months for a trade-up. Again, these numbers are for the price of the phone only, and don’t include any service fees. Here are your options for data plans:
- 1GB for $50/month
- 3GB for $65/month
- 6GB for $80/month
- 12GB for $100/month
- 18GB for $120/month
Lowest total yearly cost for an (iPhone only) upgrade plan: $944.96* with good credit payment plan and the 1GB data plan (*this estimate does not include insurance, taxes or fees).
iPhone Forever from Sprint
Similar to Verizon’s plan, iPhone Forever is a leasing option from Sprint that allows you to upgrade to the latest iPhone once a year, after you’ve made 12 consecutive monthly payments. The iPhone Forever Sprint also prices the 16GB iPhone 6s at $649.99, and offers these pricing options for iPhone Forever:
- If you have good credit -- $0 down, $26.39/month for 18 months. With this option you’ll have paid $316.68 for your phone before you’re eligible for an upgrade at 12 months.
- If you are building credit -- $175 down, $16.67/month for 18 months. With this option you’ll have paid $375.04 for your phone before you’re eligible for an upgrade at 12 months.
Obviously the better your credit is, the less you’re going to pay in the long run, but the difference between the deposit plan and the no money down plan is, in this case, actually pretty minimal. Again these numbers don’t include service. These are your options for service/data plans:
- 1GB for $40/month
- 3GB for $50/month
- 6GB for $65/month
- 12GB for $80/month
- 24GB for $100/month
- 40GB for $120/month
- Unlimited for $95/month
Lowest total yearly cost for an upgrade plan: $796.68* with good credit and 1GB data plan (*this estimate does not include insurance, taxes or fees).
If you have an iPhone or newer smartphone to turn in, the JUMP! On Demand plan ends up being the cheapest net cost for an upgrade plan at $660/year. If not, Sprint’s iPhone Forever deal is the next best thing at $796.68/year--if you’re OK with committing to one brand of smartphone for the foreseeable future.
Don’t rule out alternative and unconventional ways to save.
In his book, Do More, Spend Less, Brad's Deals' Founder & Editor-In-Chief Brad Wilson details his quest to save money when it came time to purchase an iPhone. After doing a little research, Brad found that he would save around $1,500 over the course of two years by paying the full price for an unlocked, refurbished iPhone ($479.99) and then purchasing prepaid sim-cards with unlimited talk, text, and data (180-day service sim-cards at $249.99, or $41.67 per month) from a prepaid wireless provider (StraightTalk Wireless) that actually piggybacked off of the network of one major wireless provider (AT&T). In doing so, Brad got the phone he wanted, the service he needed, and saved about half of the money he otherwise would have spent had he taken the default path to purchasing a smartphone and pairing it with a standard two-year contract.
This exact money-saving model is something Europeans consider the standard for mobile phone service, as wireless contracts are virtually non-existent in Europe. They may not have the subsidized mobile phone prices which contract-bound services allow for, but in the end they're saving more money over the long haul by using prepaid mobile plans that they can "top-up" or reload at any time.
Know when to buy (and when not to).
In general, the best time to buy any smartphone is during Black Friday sales, when many retailers and carriers bundle their smartphones with gift cards and accessories. If you want more information about why you should purchase an iPhone during Black Friday, check out our blog post on the subject, which also calls out T-Mobile’s JUMP! On Demand program as having the best price on a new iPhone.
For year-round upgrades that just can’t wait, follow these guidelines:
- iPhone: Because Apple typically only releases one new iPhone per year, you should make sure to buy them as soon as you can after they launch or within 6 months of their release. Any later and you might as well wait for next year's model.
- Android: Always make sure to check that the Android phone you're buying has adopted and runs on the latest version of the Android OS. Conventional wisdom would have you avoid Android phones that are older than six months, but there isn't much truth to these claims. Brad's Deals tech editor Mike says that flagship Android phones that are older than 6 months are totally OK to get. "The hardware will still hold up and the difference in Android builds are never big enough to warrant buying a new phone over," he said. "The must-have features are normally tied to the device hardware and not the OS. Its more of an 'Apple vs Android' talking point from the Apple side that doesn't really have that much weight behind it."
- Windows: Due to the fact that there just isn't much support for the Windows Phone OS from manufacturers, Windows Phone users don't have many new hardware options available to them at any given time. That being said, we still wouldn't suggest buying or upgrading to a brand-new Windows Phone that's been available for more than six months.