*Leasing Phones: Yes, that’s now the trend.
Looks like all four carriers now have customers by the throats.
Times they are a changing.
Customers used to be able to buy the latest smart phone phones with the simple options. Sign a two year contract, get the cell phone company (AT&T, Verizon, T-Mobile & Sprint) to subsidize the cost in exchange that you will stay a customer for two years. The usual costs went anywhere from Free to 399.99 depending on the model of the phone and the amount of storage that you wanted.
Those days are gone. In late 2013 T-Mobile shook up the mobile phone industry by announcing an un-carrier plan. Basically allowing customers to not sign a contract and instead finance the phone for a period of time for a specified amount that would be added to your monthly bill. Sounds easy enough, right?
Well, in a way, it is. Except for one thing, the subsidy that carriers used to lure customers to them was gone. Now customers are actually paying the full price of the phone meaning that those companies are actually profiting more off of you as a customer….IF they decide to keep that same phone for 2 years.
Slowing but surely each carrier followed this business model, each removing the subsidy and passing on the cost to the customer through a monthly contract. Not all companies have completely eliminated this options, Sprint, Verizon and AT&T still offer two year pricing, but recent news has reported that they too, will only offer this option for a short period of time.
AT&T NEXT: AT&T is a little different. Credit checks are required to get 0 down of course (the same action taken with buying a car, etc) Here is what their website advertises for their NEXT Program:
AT&T Next offers well-qualified buyers the choice to purchase your smartphone for $0 down, dividing the regular price of your smartphone into low monthly installment payments. Another option allows qualified buyers the choice to pay a down payment up front, dividing the remaining cost into monthly installment payments. With AT&T Next, tax is due at the time of sale, but there are no finance fees required.
For well-qualified buyers, the options are:
AT&T Next 24: Divided into 30 installments; can trade in and upgrade after 24 installments.
AT&T Next 18: Divided into 24 installments; can trade in and upgrade after 18 installments.
AT&T Next 12: Divided into 20 installments; can trade in and upgrade after 12 installments.
For qualified and well-qualified buyers, an option is:
AT&T Next with down payment: 30% of device cost down, divided into 28 installments; can trade in and upgrade after 12 installments
Verizon- Edge Device Payment Plan- Under this new plan, customers can upgrade to the latest device after a period of time and either return the phone, and start paying the new price of the phone. Here is the details from Edge Program
The phone’s full retail price is divided into 24 equal monthly instalments, with each payment being added to your monthly cell plan bill. You’ll need to pay the first month’s instalment at the time of purchase – which works work out to be between $20 and $30 each month, depending on the phone you choose.
Edge customers can upgrade any time, provided they’ve paid every cent owing on their device. The good news is you can keep your Edge-bought phone when you upgrade (and option previously not available), so you may be able to recoup some of the costs by selling your device after you switch.
Sprint : Sprint still offer two year pricing and you actually get a better deal if you do decide to remain with them for two years: Check out the chart below, taken from their website, to see their options.
T-Mobile. JUMP -On Demand- The initiator of the “phone lease” program jumps leaps and bounds over their other competitors ( marketing at its finest) With this program, customers can upgrade up to three times a year.
Here’s what their website advertises:
With JUMP! On Demand you have the freedom to get the latest smartphone anytime you like. One low monthly payment covers the cost of a new smartphone and gives you the freedom to upgrade absolutely anytime you like, up to 3x per year, at no extra cost. Here’s how it works:
Get a new smartphone with JUMP! On Demand for zero upfront out-of-pocket with approved credit.
Whenever you want to upgrade, simply bring in the last phone you got with JUMP! On Demand for a quick three-point check-up to ensure it’s in working order and swap it out for a new one.
Rinse and repeat anytime—tomorrow, next week or next month—up to three times a year.
In a way, these new options make a lot of sense. Since technology usually improves on itself twice a year, the old standard of 2- year contracts made for customers wanting the lastest and greatest smart phones to have to wait. And after you paid off the contract, you had a phone that was obsolete, no longer supported by your Operating Software, or just so damn laggy and slow that it was a challenge to make a call. Or you could trade in the phone for something like 25.00 that could be applied to the new phone purchase.
The sum up:
It happens, cell phone carriers are businesses too and have stockholders and stakeholders that they need to show more profits to. But let’s take a look at breakdowns of the each company’s “lease program”
** Since these plans are ever changing, make sure you read the fine print before you leave the store.**
Hope this helps! If you have any questions. please feel free to DM me on twitter.. oh and sharing is caring.