Verizon: buy your phone outright or spread it over 36 months

Shawn Knight

Posts: 14,249   +159
Staff member
In a nutshell: Verizon is simplifying the smartphone buying experience by removing payment plan options that some shoppers would no doubt take advantage of. Until recently, Verizon smartphone shoppers had the option to purchase a phone outright and pay the full balance up front, or spread the cost of the device over monthly installment payments lasting 12, 24 or 30 months. Now, the only option is to either pay for the device in full or spread payments out over 36 months.

A quick check of Verizon’s website shows the new option applies to all devices, regardless of initial cost.

The concept isn’t entirely new, as the automotive financing industry has been extending loan periods for years to “counter” rising new vehicle costs. It’s not uncommon to see 84-month loans and with select specialty vehicles, companies are now offering 120-month loans.

While you are technically paying less per month with a zero percent interest loan on a longer term, there are risks.

For one, it keeps you in debt longer on an asset that is depreciating. It could also make switching to a different carrier or buying another phone down the road harder with an anchor attached to your ankle, especially if your new carrier isn’t offering any trade-in promotions at the time.

What's more, payment plans are often used to mask the fact that you're paying more for a phone now than you were just a couple of years ago. Lots of people don't even look at the actual price of what they are buying, but rather, how much it'll cost them per month and if they can afford the note, and that's a dangerous way to run your finances.

Image credit: Zana Latif, Towfiqu barbhuiya

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seeprime

Posts: 680   +892
Smart way to keep the customer churn at a minimum. Call it what they want. They want us locked in for a bit longer than before. I wonder if price increases are also being considered behind the scenes. If so, lock customers in while you can.
 

Sausagemeat

Posts: 1,597   +1,422
If you can get credit to get a 36 month plan for a phone you can probably get PayPal credit at 0% and just buy the phone unlocked separately and pay it off in a year. It would be cheaper and you aren’t tied into a specific network for 36 months.

Networks are just greedy. As soon as we have properly ditched SIM cards there will be very little need for physical shops for the networks. Its kind of absurd that we buy from them anyway. It’s like buying your PC from your ISP or buying your TV from Netflix.
 

Neatfeatguy

Posts: 884   +1,522
I've purchased 2 phones in the past decade. The wife just got her third phone in the past decade.

We just go to Best Buy and deal with them. We've always had a no BS experience with them and generally they have some kind of deal with a phone we purchase (sometimes it's outright or sometimes it's payment plan through Verizon, depending on our financial status). The most recent phone purchase got us a $200 Best Buy gift card that the wife used to get a watch to go with her phone - so the watch only cost her about $150 after taxes.

I haven't really had any issues with Verizon over the past 15+ years we've been using them. I have had issues with the crappy Verizon stores in the past....one was able to sweet talk the wife into a bunch of unnecessary accessories/attachments for her phone when she was in there 10 years ago. Got her to buy a bunch of crap that she didn't need because she was lead to believe it would save her money. She came home and was showing me the final bill and I took her right back and chewed the store employee's a$s about all the unnecessary accessories they pushed on her and made them issue a refund on them. Those jerks are commission based so they're looking to sell as much crap as possible that the end user doesn't need to make as much money as possible, but Best Buy isn't. So talking with the guys there is better, never have been pushy.
 

Toju Mikie

Posts: 278   +265
I haven't really had any issues with Verizon over the past 15+ years we've been using them. I have had issues with the crappy Verizon stores in the past....one was able to sweet talk the wife into a bunch of unnecessary accessories/attachments for her phone when she was in there 10 years ago. Got her to buy a bunch of crap that she didn't need because she was lead to believe it would save her money. She came home and was showing me the final bill and I took her right back and chewed the store employee's a$s about all the unnecessary accessories they pushed on her and made them issue a refund on them. Those jerks are commission based so they're looking to sell as much crap as possible that the end user doesn't need to make as much money as possible, but Best Buy isn't. So talking with the guys there is better, never have been pushy.
Yeah, I've been fired a from sales tech job before. I just can't lie to people. If a product is bad or they don't need an accessory, I would let them know.

The last time that I bought a phone on a contract was the Samsung Galaxy S5. After that phone, I just buy phones outright and make sure that they are a US unlocked phone that supports all or most of the bands that I need. I use 5G daily, so I am always looking for which 5G bands are supported. Not many people do this, but it takes the stress out of going to the phone store or calling the phone company to order the phone because you know the phone is going to work 100% with the cell service provider (except if you need a feature like wifi calling, which may or may not work with the unlocked phone). Plus, since it is an unlocked phone, I am free to switch carriers and try service from a different carrier.

The author also mentioned car buying, which is also a good comparison. It's one of the reasons why sites like Carvana are getting popular. People don't want to deal with dealerships anymore.
 

p51d007

Posts: 3,227   +2,764
When I "started out" in the early 80's, I did like some did. Get a credit card, not worry about it.
Paid it off in the late 90's. I have a 800+ credit score, owe nothing, and have a lot of money
saved up. If I don't have the money, I don't buy it.
I DO use my credit card to buy things online, but, when the bill comes, I pay it off.
 

QuantumPhysics

Posts: 6,308   +7,248
Personally, the way I see it, iPhone has gotten so good that if you buy the highest end model you can keep it for 2 years before considering upgrade so long as the phone's physical condition is OK and the battery health is OK. I give my hand me downs to my parents. They gave me life - I did them one better.
 

antiproduct

Posts: 236   +300
Cool, so now manufacturers will raise cell phone prices to go even higher. Wonder when they'll hit the $2k mark. It's crazy to pay so much for something that will depreciate so quickly.

On a side note, my 10 year old desktop still works/runs well, my 6 year old cell phone runs like crap.
 

Rdmetz

Posts: 385   +187
Why anyone is still going through the phone companies themselves for their service let alone their phones themselves I'll never understand...

They rip you off coming and going this way and while all of you think you're getting a great deal what you're really getting is fleeced.

I've been buying my phones outright starting with the nexus 4 in 2012 and getting my service from whatever mvno is offering the best price I can find for Verizon coverage.

My service has cost me less than 25 a month for over a decade with sometimes during that period as low as 5 a month.

Meanwhile my phones while costing "full price" they are unlocked and work with every service in the country for the most part.

I also typically pay off a significant amount of the new phone by selling the old one on swappa and even at times got my "new phone" off their site as well (new to me and usually even cheaper than the going rate)

I checked with Verizon a while back to see what my costs would be directly though them and between all the phones we have and the data we use / have access to now. My phone bill would almost quadruple and that's even before taking into account finance charges for the phones.

It's utterly insane!

When adding in cost of new phones every 2 years after selling old ones plus the actual cost of service we pay like 32 bucks a phone for unlimited coverage on Verizon towers in reality it's more like 21 a phone and we pay for our phones when we buy them (again minus the reduction from selling our old phones)