T-Mobile now lets you finance a smartphone for 36 months

Shawn Knight

Posts: 12,398   +121
Staff member

In the olden days of wireless, carriers would subsidize the cost of hardware through contracts. Things work differently these days as consumers are now responsible for paying for their devices entirely. The transition was relatively smooth as carriers started offering to finance devices through payment plans.

In the eyes of many consumers, not much changed… well, except one thing.

Flagship smartphones costing in excess of $1,000 are quickly becoming commonplace and not everyone is hip to the new normal. Sure, there are more affordable alternatives and many of them are excellent but if you want the latest and greatest phone, you’re paying more for it now than ever.

How do carriers combat this potential sticker shock? Simple – by stretching out the amount of time you have to pay a device off, thus lowering the monthly payment and making it seem more affordable.

T-Mobile is now offering a 36-month Equipment Installment Plan (EIP) on select devices to help lessen the monthly expense. For a device like the LG V40 ThinQ, which retails for $920, that works out to a payment of $25.56 per month for 36 months.

In today’s society, many people mistakenly don’t consider what something actually costs. If they can afford to make the monthly payment, they just assume they can afford the product. It’s a flawed way of thinking but one that is so commonly used that most people don’t know any better.

Plus, who wants to be making payments on a phone for three years? Could you imagine still making payments on an iPhone 6S?

Permalink to story.

 

toooooot

Posts: 1,252   +579
I feel like the rising costs slowly kill manufacturers like Samsung. They first allow cheaper Chinese devices get recognition and increase sales in the states. Then in stage two, these Chinese makers will offer American warranty for all their devices and the saving will get better while the risks lower. I think Tmobile gets paid for not having some Chinese brands in their stores. At least I don't see them anywhere at their stores around Seattle. But with slowly rising prices, more people will start looking to buy something, not Apple and not Samsung but something perhaps in 400 500 range. I will still buy a Samsung if I get one of their promos, for example I could sell my current phone and get their S9 for 500. Only thing is I want his deal in 2 years, not now :D These premium looking devices at lower cost look more and more attractive. At the same time, reputation from top makers costs so much that it is no longer a deciding factor for many people. I wouldn't mind some sort of statisticsposted on techspot where say 50k people tell what price was their device they bought .
 

MilwaukeeMike

Posts: 3,211   +1,455
Countering the rising cost of smartphones through smoke and mirrors
They're offering 0% loans for an extra year and you're accusing them of being shady and taking advantage of the customer?!

You're free to NOT take the 36 month option, or to pay it off early.

In today’s society, many people mistakenly don’t consider what something actually costs. If they can afford to make the monthly payment, they just assume they can afford the product. It’s a flawed way of thinking but one that is so commonly used that most people don’t know any better.
I'd argue that your way of thinking is flawed.
Say you make $50,000 / year and you finance your phone over two years. That'll give you $100,000 of income to pay for your phone. Finance it over 3 years and you have $150,000 to pay for the same $920 phone. But most people get raises, you'll probably be making $52,000 next year and $54,000 the year after that, now that $920 phone is even cheaper!
This doesn't even consider inflation and the fact that your payment of $25/month today is much less than $25 in 2 years.
Locking in a long-term rate is better for the loaner (T-Mobile) if interest rates will go down because they'll still have your loan at higher rate. But if they're offering 0% that's already as good as it can be for you.
It works out for T-mobile because they'll likely have you as a customer for the next 3 years. But even if you leave, you only have to pay off your remaining balance - something Verizon would likely be very happy to help you with.
So stop complaining. Car companies have moved from 5 yr loans to 6 as well. It's a CHOICE for us, and it's better for us. T-mobile will make a little less, but they'll earn a customer - it's win-win and a good idea.
I think 3 years is probably the max though - and it might be already longer than you want your phone. I'm sure they'll have a trade-in program though to waive your remaining balance if you sign up for another phone.
 

ShObiT

Posts: 196   +206
Countering the rising cost of smartphones through smoke and mirrors
They're offering 0% loans for an extra year and you're accusing them of being shady and taking advantage of the customer?!

You're free to NOT take the 36 month option, or to pay it off early.

In today’s society, many people mistakenly don’t consider what something actually costs. If they can afford to make the monthly payment, they just assume they can afford the product. It’s a flawed way of thinking but one that is so commonly used that most people don’t know any better.
I'd argue that your way of thinking is flawed.
Say you make $50,000 / year and you finance your phone over two years. That'll give you $100,000 of income to pay for your phone. Finance it over 3 years and you have $150,000 to pay for the same $920 phone. But most people get raises, you'll probably be making $52,000 next year and $54,000 the year after that, now that $920 phone is even cheaper!
This doesn't even consider inflation and the fact that your payment of $25/month today is much less than $25 in 2 years.
Locking in a long-term rate is better for the loaner (T-Mobile) if interest rates will go down because they'll still have your loan at higher rate. But if they're offering 0% that's already as good as it can be for you.
It works out for T-mobile because they'll likely have you as a customer for the next 3 years. But even if you leave, you only have to pay off your remaining balance - something Verizon would likely be very happy to help you with.
So stop complaining. Car companies have moved from 5 yr loans to 6 as well. It's a CHOICE for us, and it's better for us. T-mobile will make a little less, but they'll earn a customer - it's win-win and a good idea.
I think 3 years is probably the max though - and it might be already longer than you want your phone. I'm sure they'll have a trade-in program though to waive your remaining balance if you sign up for another phone.
yeah, good example 50k a moth, I bet my *** 50% of apple buyers don't make that, so, even if the reasoning is not flawed, the example itself is, and don't even talk about companies raising 2k a year to anyone.
 

mrjgriffin

Posts: 349   +162
Countering the rising cost of smartphones through smoke and mirrors
They're offering 0% loans for an extra year and you're accusing them of being shady and taking advantage of the customer?!

You're free to NOT take the 36 month option, or to pay it off early.

In today’s society, many people mistakenly don’t consider what something actually costs. If they can afford to make the monthly payment, they just assume they can afford the product. It’s a flawed way of thinking but one that is so commonly used that most people don’t know any better.
I'd argue that your way of thinking is flawed.
Say you make $50,000 / year and you finance your phone over two years. That'll give you $100,000 of income to pay for your phone. Finance it over 3 years and you have $150,000 to pay for the same $920 phone. But most people get raises, you'll probably be making $52,000 next year and $54,000 the year after that, now that $920 phone is even cheaper!
This doesn't even consider inflation and the fact that your payment of $25/month today is much less than $25 in 2 years.
Locking in a long-term rate is better for the loaner (T-Mobile) if interest rates will go down because they'll still have your loan at higher rate. But if they're offering 0% that's already as good as it can be for you.
It works out for T-mobile because they'll likely have you as a customer for the next 3 years. But even if you leave, you only have to pay off your remaining balance - something Verizon would likely be very happy to help you with.
So stop complaining. Car companies have moved from 5 yr loans to 6 as well. It's a CHOICE for us, and it's better for us. T-mobile will make a little less, but they'll earn a customer - it's win-win and a good idea.
I think 3 years is probably the max though - and it might be already longer than you want your phone. I'm sure they'll have a trade-in program though to waive your remaining balance if you sign up for another phone.
you're exactly right and without having the mindset of being ok with getting a loan/leasing something most people won't have anything nice. someone working at mcdonalds isn't buying an hdr 4k tv with all the bells and whistles in one spending....ever.......unless they live with mom or their spouse makes all the cheddar so they're gonna lease it and pay it off, which is smart. it allows less financially fortunate people to experience what others who are more fortunate than they are do. PLUS in alot of cases these loans build your credit rating. then you can lease a house and have a family etc.....all while just making some small payments......that you CAN afford in payment form but not as a one time purchase. leasing is a forced way of budgeting in my opinion. some people can afford alot of things if they just save up, but saving is impossible for some people. hence leasing. thank you to whoever made leasing a thing. seriously. I mean......technically right now I can't afford the.....lets say 2019 buick lacrosse I want and its because I buy too much pot (it is.) if I force myself to get a loan for that car (meaning I now have no way to buy pot) and the payment is = or less than my weed habit a month technically I can afford that car right? plus wouldn't choosing an "adult" thing like a nice car be more sensible than buying these "drugs" all the time. the car would seem like a better/more forward-thinking adult decision right? plus I'm off drugs now technically. what if I were on hard drugs? did leasing just technically save my life? I mean they cost the same so.....tell me I'm wrong. leasing is awesome. end
 

Nobina

Posts: 2,560   +2,171
Countering the rising cost of smartphones through smoke and mirrors
They're offering 0% loans for an extra year and you're accusing them of being shady and taking advantage of the customer?!

You're free to NOT take the 36 month option, or to pay it off early.

In today’s society, many people mistakenly don’t consider what something actually costs. If they can afford to make the monthly payment, they just assume they can afford the product. It’s a flawed way of thinking but one that is so commonly used that most people don’t know any better.
I'd argue that your way of thinking is flawed.
Say you make $50,000 / year and you finance your phone over two years. That'll give you $100,000 of income to pay for your phone. Finance it over 3 years and you have $150,000 to pay for the same $920 phone. But most people get raises, you'll probably be making $52,000 next year and $54,000 the year after that, now that $920 phone is even cheaper!
This doesn't even consider inflation and the fact that your payment of $25/month today is much less than $25 in 2 years.
Locking in a long-term rate is better for the loaner (T-Mobile) if interest rates will go down because they'll still have your loan at higher rate. But if they're offering 0% that's already as good as it can be for you.
It works out for T-mobile because they'll likely have you as a customer for the next 3 years. But even if you leave, you only have to pay off your remaining balance - something Verizon would likely be very happy to help you with.
So stop complaining. Car companies have moved from 5 yr loans to 6 as well. It's a CHOICE for us, and it's better for us. T-mobile will make a little less, but they'll earn a customer - it's win-win and a good idea.
I think 3 years is probably the max though - and it might be already longer than you want your phone. I'm sure they'll have a trade-in program though to waive your remaining balance if you sign up for another phone.
you're exactly right and without having the mindset of being ok with getting a loan/leasing something most people won't have anything nice. someone working at mcdonalds isn't buying an hdr 4k tv with all the bells and whistles in one spending....ever.......unless they live with mom or their spouse makes all the cheddar so they're gonna lease it and pay it off, which is smart. it allows less financially fortunate people to experience what others who are more fortunate than they are do. PLUS in alot of cases these loans build your credit rating. then you can lease a house and have a family etc.....all while just making some small payments......that you CAN afford in payment form but not as a one time purchase. leasing is a forced way of budgeting in my opinion. some people can afford alot of things if they just save up, but saving is impossible for some people. hence leasing. thank you to whoever made leasing a thing. seriously. I mean......technically right now I can't afford the.....lets say 2019 buick lacrosse I want and its because I buy too much pot (it is.) if I force myself to get a loan for that car (meaning I now have no way to buy pot) and the payment is = or less than my weed habit a month technically I can afford that car right? plus wouldn't choosing an "adult" thing like a nice car be more sensible than buying these "drugs" all the time. the car would seem like a better/more forward-thinking adult decision right? plus I'm off drugs now technically. what if I were on hard drugs? did leasing just technically save my life? I mean they cost the same so.....tell me I'm wrong. leasing is awesome. end
I don't like that kind of paying cause paying for something one time gives you a piece of mind. You don't owe anyone anything and don't have to worry. Also it can be a problem if you lease multiple items cause it seems so cheap at first and then you realize you are in deep ****.
 

p51d007

Posts: 2,445   +1,713
Or, wait until the "latest thing" comes out, scoop up last years "latest thing" for about 1/2 of what it was. But...but...the new innovations!! What...multiple cameras, fashionable colors, smaller batteries, faster processors, larger screens? Who cares!
 
  • Like
Reactions: ShagnWagn

Axiarus

Posts: 530   +323
Save for the flagship you want. I suggest iPhone or Pixel. Buy it and then don't but another phone for two cycles. All the while saving for a new phone.
 

Uncle Al

Posts: 7,221   +5,615
Nothing new about this .... companies have been doing it for years, simply burying the cost of those "free phones" in their monthly subscription fees ...... woopie!
 

drjekelmrhyde

Posts: 354   +124
In the olden days of wireless, carriers would subsidize the cost of hardware through contracts.
And yet the price didn't drop. Younger people asked for that shiat and still pay the exact price .
 

tipstir

Posts: 2,854   +198
You can buy a unlock smart cell phone for less than the name brands online. Next time I going the route

T-mobile - Rate for 1 person plus another person.
Protection Plan: $10 a month ($120 a year)
Lease Rate: $9, $10, $15, $20, $25, $30, up if you go the lease route.

My rate plan gone up by $10 bucks then auto-pay brings back down to $10 bucks