1. Wait a few months
Apple sold 9 million iPhone 5s and 5c models in the three days after those products were launched a year ago, according to the company. If you’re an early adapter or a tech professional, you may want to pay more to get your hands on the newest version immediately. Otherwise, hold off. Wait for sales and price cuts to kick in in about three months, says International Business Times.
2. Drop Apple
Loyal Apple customers get a lot of technology for their money. But Apple fangirls and boys miss out on budget-priced models offered by other companies. And since Apple keeps its software proprietary, its competitors can’t use it to sell rival products at lower prices.
3. Sell or trade your old phone
Your old phone is worth money. But sell soon to lock in a good price before new models depress your phone’s value, advises used gadget marketplace uSell.com.
Wall Street Cheat Sheet recommends:
Glyde, a marketplace where consumers can buy and sell smartphones and other devices, offers top dollar for flagship models. Users can receive upward of $425 for an iPhone 5s on Glyde.
Other marketplaces for selling and trading phones include:
- Gazelle
- Nextworth
- Amazon’s Electronics Trade-in
- EBay’s Sell Your Phone
4. Drive in a slightly slower lane
Take advantage of the price depreciation on old models caused by the new smartphone launches and buy one of the older devices. For example, I’ve been hanging on to my old paid-for iPhone 4 until after the iPhone 6 launch. I want to see if the new features might be game-changing for me. If not, I’ll instead wait for a deal on a souped-up iPhone 5s.
5. Sign a contract
The problem with rock-bottom phone service discounters is the prices they charge for popular phones. Wall Street Cheat Sheet says low-cost Cricket Wireless and Boost Mobile need no contract and offer low rates but charge astronomically high prices for phones.
Depending on how you use your phone, a contract may be cheaper. True, it locks you in. But you could save about half on the price of a new iPhone, Cheat Sheet says.
6. Shop around
Don’t automatically grab the deal your phone company’s representative offers you. Shop around online. And try big retailers like Walmart and Costco for lower prices.
7. Buy an unlocked phone
Buying an unlocked smartphone outright is cheapest. (“Unlocked” means it works with a number of carriers.) But not everyone can afford the high upfront cost. Phone networks subsidize the cost of a device to get it into your hands quickly. Your phone company recoups its money over the life of your contract. All of this makes smartphones seem cheaper than they really are.
Here is the cost of an unlocked 5s at the Apple Store:
- 16 GB, $649.
- 32 GB, $749.
- 64 GB, $849.
Sellers at Amazon ask comparable prices.
The same phones purchased from the Apple Store with a contract from Verizon, AT&T or Sprint cost $199 to $399, not including other costs on a month-to-month payment plan.
However, much of the potential for saving lies in your ability to take advantage of cheaper no-contract service plans and the freedom to shift providers when another company offers a better deal.
Consumer Reports shows the prices in July 2014 of no-contract plans (1,200 talk, 5,000 text and 1 GB data) from AT&T Consumer Cellular, H20 Phone, Cricket Wireless, Sprint, Boost Mobile, Sprint, Zact, T-Mobile, Walmart Family Mobile, TracFone, StraightTalk, Page Plus Cellular, Verizon Wireless, Virgin Mobile, payLO Talk & Text and Freedom Pop. (Read the pros and cons of free cellphone plans).
Other advantages of buying outright
Price isn’t the only reason to own your own phone if you can afford it. Also:
- You can use your phone on any network.
- You can use networks overseas with the purchase of an inexpensive SIM card.
4 ways to save on your phone plan
The mobile talk industry is fiercely competitive today. Price isn’t the only concern, however. Coverage is crucial. Says one USA Today reporter:
In my travels, I was more likely to get high-speed data service with AT&T and Verizon, especially in rural areas. T-Mobile has improved in many cities. Sprint is still catching up. A plan with a large data allotment won’t mean much if you can’t use it. Also, if you travel a lot, only T-Mobile offers free data roaming outside the U.S.
Here are five ways these industry rivalries can help you save money on a service plan:
1. Lower costs with a family plan
A family plan typically charges a standard price for the first phone line and discounted prices for additional family members, bringing down monthly costs. The more members, the lower the costs, usually. “Carriers like Sprint Corp. and T-Mobile US Inc. allow as many as 10 lines on a family plan,” says International Business Times.
Clark Howard’s website describes Sprint’s highly competitive “Framily” plan (you define who is “family”):
You can have up to 10 people on your plan for a flat $100. That includes unlimited talk, text, and 20 GB of data to share among the 10 lines.
The USA Today article identifies the best network plans for individuals, couples and a family of four.
2. Get rewarded for jumping ship
Termination fees, assessed for leaving a carrier before your contract is up, have made it difficult to chase competitive prices. But increased competition in the industry gives users new freedom. For example:
- T-Mobile pays up to $350 per line, up to $650 per line when you trade in a device, in early-termination fees so you can ditch your contract and join them.
- Sprint has slashed prices on family plans and pays $350 in early-termination fees for customers who switch. But The Consumerist says Sprint’s network suffers from slow download speeds.
- T-Mobile offers a free year of high-speed data for users who lure a friend to switch from another network. Both users get the free data.
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