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Goodbye, Subsidized Phones: A rundown of every carrier's leasing plans

By Julio Franco
Sep 3, 2015
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  1. All the major carriers are moving away from traditional two-year contracts, and leasing options are now springing up. But plenty of variations exist.

    You may lease a car or rent an apartment, but what about a smartphone?

    What Does it Mean to Lease Your Phone?

    All of the major wireless carriers now offer leasing plans, in which a customer pays a monthly fee to use their phone, and they can then trade it in for the latest model whenever they like.

    But you never actually own your phone. Sure, we don't typically use our old phones, but when they can be sold for cash, do you really want to just hand them over?

    The big advantage of these leases though is the lack of up-front costs. Even subsidized with a two-year contract plan, a new top-of-the-line smartphone can easily cost you $200 out of pocket on top of the monthly service fees. And for those who want a new phone every year, one of these programs can even save money by letting them upgrade more regularly, without penalties or the need to pay for a pricey, full-cost smartphone.

    Goodbye, Subsidized Phones!

    Unfortunately, even if you don't like the idea of leasing rather than owning, you may be stuck with it regardless, as carriers continue to move away from the two year contract.

    Sprint plans to only offer leases by the the end of 2015 while both T-Mobile and, more recently, Verizon, offer no contracts but instead require you to pay for your device in full up front or spread the cost out over your monthly payments. (These non-contract plans, however, aren't quite a lease; you can keep your phone once you've paid it off or you can trade it in to get an early upgrade, which is more lease-like.)

    Of the major carriers, AT&T is the only hold out in offering traditional two-year contracts — and even it's transitioning away from them, promoting their own AT&T Next program instead.

    So if subsidized phones plans are on the way out, is leasing how should you pay for your next phone?

    When Not to Lease a Phone

    You'll want to avoid, or more carefully consider, a lease or upgrade plan if:

    • You typically keep your phone for more than two years, in which case leasing may not be the most economical option.
    • You reuse your old smartphones (for example, as hand-me-downs for kids or other family members).
    • You want to sell your old smartphone yourself. You may find that you could get more cash by selling your old phone on eBay or Craigslist instead of turning it back in to your carrier.
    • You're particularly hard on your phones and it may not be in good condition after a year or two.

    Every Major Carrier's Leasing / Upgrade Plans

    Despite the above caveats, lease and upgrade plans can be money-savers for some consumers, particularly those that want a new phone once a year (or more often). Let's take a look at what these lease-style plans offer to figure out whether they're worth the cost or not.

    Please note that all of these deals have additional fees if phones are damaged, lost, or stolen, but also offer protection plans for an additional cost.

    Sprint Lease

    Lease Android phones, iPhones, or iPads for 24 months at a time. With a 24 month lease period, this plan isn't that much different from a traditional two-year contract — but you don't need to pay for your device up front and you hand it in at the end. You save $336 leasing a 16GB iPhone 6 instead of buying with a two-year contract, which is about equal to what the device would be worth after two years.

    Protection Plan: Total Equipment Protection plan which has a monthly fee of $9 to $13.

    How Often Can I Upgrade?: Yearly with the iPhone Forever plan, yearly for any customer paying an extra $10 a month for Sprint's Early Upgrade program, every two years on other plans.

    Cost for a New 16GB iPhone 6 Over Two Years: $1,920 (Sprint Lease) or $1,800 (iPhone Forever) for a plan with unlimited talk, text, and data.

    Is It a Good Deal?: Yes, as long as you don't upgrade your phone more than once every two years (which adds to your costs) and it doesn't get lost, stolen, or broken.

    The best value here is the iPhone Forever plan, which is currently available at a discounted rate of $5 less per month than Sprint's standard lease (if you trade in your existing smartphone) — saving you an additional $120 over 24 months, plus giving you an annual iPhone upgrade. However, this is a limited time offer with no suggestion of when it expires.

    T-Mobile Jump on Demand

    Jump on Demand lets you upgrade up to three times a year. And though not all phones are eligible, the ones you want (like iPhone 6 models or Galaxy S6 models) probably are. Jump on Demand is an 18-month lease plan where you pay a fixed amount (between $15 and $30, depending on the phone) on top of your plan cost, and whenever you upgrade to a new phone, you'll trade in your old model. At the end of your lease period, hand over your phone and sign up for a new lease or pay a fixed price to buy the phone.

    Are you a less aggressive upgrader? T-Mobile's standard two year plans with Jump service let you upgrade annually for an extra $10 a month, which includes insurance. You can trade in your phone for a new one after a year or continue with your existing phone for as long as you'd like, keeping it after the two year period is up.

    Protection Plan: An extra $8 per month.

    How Often Can I Upgrade?: Three times a year, though only select devices are available.

    Cost for a New 16GB iPhone 6 Over 18 Months: $1,350 for a plan with unlimited talk, text, and 3GB of 4G LTE data. (Data after this point is free, but slower.) If you want unlimited data, you can get it for a total cost of $1,710 over the same period. Note that this plan is six months shorter than some others.

    Is It a Good Deal?: The $15 a month Jump on Demand plan matches the low price of Sprint's current iPhone Forever deal — and it offers more frequent upgrades, though iPhone fans won't likely be interested in upgrading more than annually. However, for Android aficionados who want to jump to the latest devices whenever they're out, this is likely a good deal.

    Though T-Mobile's more reasonably priced plans don't offer unlimited data, one bonus is that T-Mobile plans don't charge for data used for music streaming on the most popular services, including Spotify, Rdio, Google Play Music, and Apple Music.

    AT&T Next

    AT&T Next is far and away the most complicated of the lease plans available. You sign up for a Next 12, Next 18, or Next 24 plan, which will allow you to upgrade after 12, 18, or 24 months, respectively. You can also choose a Next plan with down payment, where you pay 30% of your phone's cost up-front and can upgrade after 12 months.

    But here's where it gets confusing: Next 12 is a 20 month plan, Next 18 is a 24 month plan, Next with down payment is a 28 month plan, and Next 24 is a 30 month plan. Confused? Remember that the plans are named after how often you can upgrade, not how long it takes to pay off your phone.

    If you upgrade, you'll turn over your existing phone to get a new one. But if you choose not to upgrade, you can keep your phone at the end of the contract regardless.

    Protection Plan: $6.99 a month to insure your phone against damage, theft, or loss.

    How Often Can I Upgrade?: Every 12, 18, or 24 months. If you want to upgrade more often than that, you'll have to pay off 12, 18, or 24 months of installment payments (or just get T-Mobile Jump on Demand, which is a better deal for aggressive upgraders).

    Cost for a New 16GB iPhone 6: Up to $2,315, depending on the plan.

    • Next with down payment: $195 up front and $2,010 over 28 months (for a total of $2,205) for a plan with unlimited talk, text, and 2GB of data.
    • Next 12: $1,765 over 20 months for a plan with unlimited talk, text, and 2GB of data.
    • Next 18: $1,985.16 over 24 months for a plan with unlimited talk, text, and 2GB of data.
    • Next 24: $2,315.10 over 30 months for a plan with unlimited talk, text, and 2GB of data.

    Is It a Good Deal?: AT&T's pricing is competitive with the other plans on this list, though it's a bit harder to tell due to the odd plan durations. But like with Verizon, AT&T offers no unlimited plans which may make heavy data users balk. If you need more, you can get it for a cost: you'll pay $20 more a month for 5GB or $60 more a month for 15GB. While AT&T's plans do offer you more flexibility on when to upgrade, the biggest drawback here may well be the complicated choices and prices.

    Verizon Device Payment Program

    Pay for the full cost of your smartphone over two years. You can upgrade at any time for an additional cost.

    Protection Plan: An extra $3 to $11 per month to insure your device.

    How Often Can I Upgrade?: As often as you'd like, though you'll have to pay for your device in full first. Typically, Verizon will let you trade in your phone rather than paying it off once you've had it for 12 months, but upgrade deals vary.

    Cost for a New 16GB iPhone 6 Over Two Years: $2,209.22 for a plan with unlimited talk and text and 3GB of data.

    Is It a Good Deal?: It's neither really a lease plan nor an upgrade plan, but it's the only game in town for Verizon customers. Though the overall price is higher than Sprint's offerings, it may well be a better deal for people who want to keep their phones longer than two years. After the initial two year period, your monthly bill will drop by $27.08 a month (the cost you were paying for the phone), going from $92.08 a month to $65.

    However, the deal-breaker here may be Verizon's lack of unlimited plans, as heavy data users will pay a premium ($107.08 a month for 6GB and $127.08 a month for 12GB).

    Love Them or Hate Them, Leases Aren't Going Away

    Leasing your smartphone isn't always a bad deal, though you'll want to consider how you use your phone (and read the fine print on your lease agreement) before signing up. But whether you love leases or hate them, all of the carriers are moving away from subsidized, two-year contracts — so now is the time to figure out which new option is right for you.

    Readers, do any of you lease your phone?

    Elizabeth Harper is a contributing writer at dealnews. Republished with permission.

    Permalink to story.

     
  2. treeski

    treeski TS Evangelist Posts: 962   +205

    Thanks for the guide. I'm thinking of switching carriers from AT&T soon so I will refer to this. How does it all work with shared plans??
     
  3. mctommy

    mctommy TS Booster Posts: 190   +30

    Price-wise should be similar except that you will get more discount on the actual plan if you have multiple lines.
     
  4. madboyv1

    madboyv1 TechSpot Paladin Posts: 1,333   +267

    It depends on how the carrier handles not only shared lines but also shared data if they do it that way. It still is generally less expensive per line when you go multi-line, but definitely upgrade to new phones at the same time or else you'll have the headache of keeping track of a lot more lol.

    As for me... I don't know what I'm going to do. I currently have Sprint and have been thinking about moving somewhere else... but I'm not entirely a fan of leasing plans either since I like to own my phone... Verizon might be my only choice in that regard. =(

    Either that, or stick with Sprint and upgrade before the end of the year.
     
  5. p51d007

    p51d007 TS Evangelist Posts: 908   +384

    This is similar to leasing an automobile.
    Now, the GOOD thing about the USA finally getting away from the carrier 2 year contract, is hopefully more and more devices, will start to hit the USA, forcing the Apple/Samsung/HTC/LG etc to LOWER THEIR PRICES.
    If people did the math, they would find they have been getting SCREWED with the 2 year deal, paying "199" for a phone, that "retails" for 600,700 or more. I got off that bandwagon over 2 years ago.
    Last year, when the stupid OnePlus One came along, I took the time and priced out a typical at&t contract Galaxy S5, versus using straight talk, and the OnePlus One. Over the 24 month life of the 2 year contract, going with something like the OnePlus, and straight talk, you would SAVE 84 dollars PER MONTH.
    If people would SHOP around for phones, they would see they (USA) are getting screwed on the price.
    Almost 2 years ago, I bought a Huawei Mate2, a mid spec device, expecting to send it back when OnePlus would send me the invite for the OnePlus. 2 weeks into the Mate, the invite came, bought the OnePlus, and turned right around and sold it. That mid spec cheap Mate2 has been FLAWLESS, and that 2 day battery life is hard to beat.
    USA has terrible schooling in economics, people are like sheep, heading to the first blinky light shiny object they see, and the fanboys, both apple & android, think that they "need" to ditch a perfectly good phone in 9-12 months for the "next best thing" all the while ignoring the fact, that the next "next best thing" will be out before the warranty is over on their current device. Faster & faster processors with more and more pixels, bigger cameras will not improve the typical users experience, but I guess the release of endorphins,
    is what they are after.
     
  6. gibbstar

    gibbstar TS Enthusiast Posts: 30

    how's the coverage with Straight Talk? I read your post, looked into this (my 2 year is up end of this month) and was also looking at the OnePlus 2 lately, and damn I could save myself about 50%/mo. But, seriously, now is the service with Straight Talk? I live in a major metropolitan area (Seattle), but travel a lot.
     
  7. h4expo

    h4expo TS Enthusiast Posts: 43

    This seems to be following tech trends that are trying to turn every product into a service and requiring a continual financial relationship. If all things were out in the open I bet you would see many decision makers hiding their cutting edge tech (or simply don't have any) in favor of a "scheduled release" to milk the crowd. The only way businesses could stay afloat like that is to get enough people entrenched in this waiting game with the threat of penalties for leaving early.

    The real question is when will P2P cell networks become a thing? The tech is already their...
     
  8. SirGCal

    SirGCal TS Maniac Posts: 365   +136

    Well, since one of the first things many people do is to ROOT their devices, this would probably also add in the problem with that of breaking some sort of penalty issue, requiring a penalty fee, etc. More reasons to lock users down and force more $. T-Mobile looks more inviting all the time due to this.
     
  9. 151rum

    151rum TS Rookie

    So, no more subsidized phones, does that mean no more uninstallable crapware forced on people that choose to pay retail? Leasers, not owning their phone obviously have no say. But I would not lease, anything, it does not make sense for me. I currently have sprint on a legacy 80 dollar unlimited data plan, one month I used 35gb JUST watching netflix on my phone, there was much more data usage. Never once noticed any throttling or the like. My total monthly bill, 112 dollars with the 11 dollar insurance included.
    My roomate goes through AT&T and got me to sign up on a family plan with her, only agreed because of the return policy, you have like 2 weeks or something to cancel and return the phone, I don't know she did it. But I really wanted a HTC One M8-Windows phone. Wow, I loved that phone, but AT&T their service here, hahaha. I thought Sprints was bad, and it was, but wow AT&T's... Let me put it like this, when I told the AT&T agent that I had legacy unlimited with Sprint she said "oh you are really going to notice a difference in your data speeds," I pulled up the FCC app and did a speedtest on my Sprint Galaxy S4, 41mbps down, 12mbps up, and said to her "so, I will notice it will be crappier?" She kinda chuckled and said it again, so I ran the test again, inside the AT&T store on Sprint LTE, 47mbps down, unlimited... So I repeated my question and she just laughed again and said "you'll see," yeah, I'll see.
    Received my Windows M8 and did side by side Ookla speedtest inside the AT&T store. Sprint - 46mbps down, AT&T 12mbps down, 10gb shared, 210 dollar total bill for 2 lines.
    But wait, the AT&T phone was preconfigured to automatically connect to unsecured wifi and was on the AT&T stores connection, not LTE. Autoconnect to unsecured wifi, ontop of being illegal (you must have permission to connect to a persons wifi, the lack of a password does not constitute permission) is stupid and unsafe.
    Turned off wifi, AT&T, at their store on LTE, 2mbps... Oh yeah, I noticed a difference in data speed. Downtown Saint Paul, Minnesota I get pretty consistent 51-52mbps down speeds on sprint, never over 17 on AT&T, and they want you to rent a phone from them, giving away any rights you may of had if you had bought it. So, how does the leasing affect rooting/jailbreaking? lease it the whole time and go to turn it in, oh hey you rooted it now you have to pay for it, the whole thing, again... (speculation)
    BUT BUT HEY, the president just signed the "Unlocking Consumer Choice and Wireless Competition Act" (S.517) into law a couple months ago, so carriers HAVE to unlock you phone if you want because "it is important to be able to use your phone where you want, creating competition..." Look at that again, the president, signed an act into law, carriers now have to unlock your phone if you ask.
    Whos phone? Not your phone chump, that's their phone, you're just renting it... Smart, **** consumers and customers. Come, go, doesnt matter, we are just data and metrics to buy and sell, while charging us more and offering less, sweet. If I was Obama I would take that like the telcos spitting in my face and laughing at me. "Oh, consumer choice is important and make a law about it, **** your law watch this..." Ever think about why they all changed their practice basically at the same time.
    Ok, so I have no point, just an unorganized rant, I would try and structure it more coherently and have a conclusion but none of this matters anyway. Your opinion does not matter. I don't matter. You don't matter. Sorry.
     
  10. 151rum

    151rum TS Rookie

    I think you mean "milk the herd," I wonder how sheeple milk tastes, probably like money and stupidity. And come on now, have you looked at the revenue of any of these companys?
    AT&T Full-Year 2014: Consolidated Revenues of $132.4 Billion, Up 3.1 Percent when Adjusting for Sale of Connecticut Assets
    Hmm, yeah ok. Or try this, maybe offer competitive products with kinda ok customer service at a reasonable price, or is that unreasonable? If one company did that... Sigh, you're right, wouldn't make a difference because people are stupid and have these asinine loyalty's to these companys that have absolutely no loyalty to them. The only way to fix this is to fix the consumer and that is impossible. How do you fix stupid?
     
  11. Squid Surprise

    Squid Surprise TS Guru Posts: 861   +272

    Canada is also following suit... although not as rapidly... you still can get subsidized phones at all the major carriers, but the government recently struck down cancellation fees which probably will end subsidization in the future...
     
  12. crunchy2k

    crunchy2k TS Rookie

    These are good recommendation for businesses, but consumers can get better deals from the subcontracting cellphone providers running on T-Mobile, Sprint, and Verizon. You shouldn't be paying more than $360 a year for unlimited text/talk. Once you realize that cell data is expensive and only needed for in car maps and browsing, <250 MB will do you. Just hit Walmart, Starbucks, work, home or any local business with wifi for heavy video watching. I've seen plans from Ting and US Mobile that allow you to pay as you go. The base monthly price is $13-$17mo. Unlimited talk and text with some data runs $30. These cell services are very easy to use as you just debit your credit card online when the minutes get low. It ends up at 0.02-0.06 cents a minute. Much cheaper than the $40-$80mo. plans the big telcos sell.

    With the very poor quality of voice on cellphones these days, there are text only plans that break below the ten dollar mark. Then there are the 'free' wifi talk plans with phone numbers from places like Freedom Pop. Voice quality matches what I had on Verizon and Us Mobile that I now have. I still get off calling myself from US Mobile to Freedom Pop and back from different cellphones. It drives the dog wild. LOL

    I bought my latest phone from Gazelle which sells secondhand phones in various grades with a 30 day return policy. Swappa is a cheaper website. You can get better deals. My three earlier phones came from craigslist. Phones appear to have hit a power/battery/memory/feature plateau. At least the top models from 2014 on. So expect to own your phone for several years and buy accordingly.
     

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