Do you prefer to pay for your phone on installments, or buy it outright at full retail price?


Did you know that top-shelf phones don't really cost $200, but are in reality north of $600 at launch? Well, until last year, most US carrier subscribers didn't really care, as Verizon, AT&T, T-Mobile and Sprint were heavily subsidizing those handsets for you, and then recouped their subsidy over the lifetime of the plan you subscribed to. Who would've thought just one cell phone contract ago that there will come a time in the bastion of two-year plans and $199 subsidized flagships, when you will have to pay for your own phone full retail? Well, after AT&T jumped the gun in early January, that time is now, and we already made a thorough comparison of the carriers' new data plans that don't ask you for a two-year contract any more.

Instead, you can pay your phone in even installments of various lengths, usually 24 months, and even drop down payments, or throw extra money to pay it off faster, depending on the carrier and your credit history. Granted, the no-contract data plans, access fees and phone payment charges are calculated in such a way that there isn't that much of a difference in the monthly outlay to a carrier from before. A few notable exceptions make today's more competitive carrier landscape a better deal, though - you don't have to pay the usual $199 down payment for a high-end handset, but are essentially paying them off as a zero-interest loan. Alternatively, you can buy it outright, and only pay for the data bucket tier, which start at about $40-$50 a month, depending on the carrier. 

Moreover, you can now move between plans each billing cycle, if something better comes on the horizon, and, if you buy the handset or bring your own, you don't have to hassle with early upgrade restrictions. T-Mobile's installment plans for some premium phones now even include upgrades up to three times a year, so it's a better world we are living in indeed. That is why we wanted to ask you whether you would prefer to pay your phone in full upfront, or gradually on installments, given today's carrier realities. Tell us in the poll below, and argue the position in the comments.

Do you prefer to pay for your phone on installments, or buy it outright at full retail price?

I prefer paying it on installments
29.84%
I'd rather buy it full price
70.16%


FEATURED VIDEO

65 Comments

1. DoggyDangerous

Posts: 1028; Member since: Aug 28, 2015

I prefer to pay in installments if not charged anything extra. Otherwise, I prefer to buy upfront.

51. HildyJ

Posts: 342; Member since: Aug 11, 2012

Even with no interest, people need to realize it's still a commitment which they are obligated to pay no matter what. It ties up people's money for years. If you can't afford to buy it outright, you should make do with your old phone and save up for next month's or next year's greatest phone ever.

53. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

You're tied either way. If you want out...you pay off the phone or contract. Its really no different. They spread the payments over 24 months = CONTRACT. Verizon won't let you make extra monthly payments. You must pay the device off in full based on the balance of their EIP. T-Mobile lets you make additional payments and you can pay a phone off earlier, but not all at once. I usually make one extra payment per month.

65. techperson211

Posts: 1280; Member since: Feb 27, 2014

In our country, it's more practical to pay the full price than installments.

2. RajRicardo

Posts: 503; Member since: Feb 28, 2014

Apple's iphone upgrade program is kinda cool...pay ~$34-50 per month and you are set.

6. catt4u

Posts: 145; Member since: Jul 09, 2011

Right, but you can't sell your 'old' phone for hard cash. It's like leasing a car. You'll never own it ;-) I rather buy my phone, sell it after a year and buy a new one. That way it'll cost me the same as the Apple upgrade program, but I still own a (my) phone.

27. Arch_Fiend

Posts: 3951; Member since: Oct 03, 2015

The leasing plans saves you money for 2 years, 3 years for t-mobile's plans. After 2-3 years you start losing money compared to buying and selling for 3-4 years.

54. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Huh? Please explain!

58. Arch_Fiend

Posts: 3951; Member since: Oct 03, 2015

I have to do my research all over again but i will, I'll get back to you ok.

61. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Good Luck. Let me help you a little. Leasing doesn't save you any money. Here is why. Leasing is just like the installment plans in that, when you upgrade you must return the device in mint condition. Like with cars, with your phone on a lease, as long as you bring it back EXACTLY like when they sold it, no damage of any kind, they know the device is worth a certain amount. You simply bring it in and exchange and continue to make the same payment. T-Mobiles leasing is at 18 months, but after that you have to pay whatever is left off in full. But not with the iPhone I think. T-Mobile iPhone lease is very similar to Sprint's. After all they are the ones who started it and Apple copied. Installments are = to 24 month contract. VZW requires that if you want to pay a device off early, you have to pay the balance in full that is owed, while T allows you to make additional payments anytime you want. My credit is decent so when I moved to T from VZW, I only paid the taxes on all the devices upfront... The downside to installments is equal on all carriers. In my case I paid the purchase taxes upfront. However, the monthly payments are still taxed yet again on the bill, so you end up spending more money vs paying for the device upfront. Then when you add activation fees, excise taxes and more, you end up paying more money over time vs buying outright. Leasing or installments cost more than paying cash. It really sint goign to matter how much one carrier may save you over another. If you choose instalments you can control how much you end up paying by paying it off as early as possible. They only agree not to charge you interest, but still robbing you with taxes and fees. If you pay cash..you're done. Now when you lease, you pay the activation only once (plan dependent). On JUMP!, I only pay activation once because the other phones dont require activating because the number is already activated, you simply move your SIM. VZW tried to apply an activation fee anytime you have Them activate your phone liek when you buy it at the store. To avoid this, order online and transfer your SIM. I can't speak for Sprint or ATT because the only phone I ever had with ATT was through my work. I hate ATT. Sprint had terrible customer service and poor location quality is why I left them. VZW I left them for simply being to expensive vs T-Mobile where I live they both have equally good service. So why pay more for exactly the same. Plus I get 10GB on each line for almost half what I paid to share 80GB on all lines.I never need more than 10 plus they roll over. With VZW they dont. VZW will rob you blind and while you're looking. You will find that VZW and ATT are more expensive by as much as $300-$500 per year on a contract plan over T-Mobile and Sprint and $100-$300 more expensive when using a payment plan. I went from a $500 VZW bill to a $330 T-Mobile and I have 6 devices now on a payment plan vs 5 on VZW.

64. Arch_Fiend

Posts: 3951; Member since: Oct 03, 2015

My tmobile bill is $196 for 5 lines and my leasing price is way less than paying instalment fees for 24 months. I'll get back to you tomorrow with full details on how leasing saves you money for 2-3 years over buying full price and sealing.

68. TrevorB1

Posts: 64; Member since: Dec 30, 2015

I'm sorry, but you really need to cut down on what you have to say. Also, quit acting like you know more than everyone else on here about phones. Don't be condescending towards others when they have an opinion of their own. Sick and tired of seeing your comments on pretty much everything I read.

34. KingKurogiii

Posts: 5713; Member since: Oct 23, 2011

why does owning it even matter if you know you're going to trade it for the next thing in a year anyway. upgrade programs just make it easier. i would buy my phones outright and sell them off in a few months on Craigslist or Swappa before they depreciate and use the money to bury what i get next but it's always a hassle and you always lose money if only $50-$100. i got sick of it year after year. with something like the iPhone Upgrade Program you pay $36 a month for a service around ease and peace of mind essentially, to have the latest phone for no trouble at all except for the trip to the store. if you decide you want to stop and own the phone these programs are lease to own for zero interest. just pay the remainder of what you would've paid upfront and that's all she wrote

62. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Ownership is cheaper in the end..PERIOD. All you ahve to do is take your bill and do the math. Here is an example. An iPhone at $649 + tax will be cheaper in cash than if you pay it over 24 months. Over 24 months you pay the 649+tax over 24 months, plus that EIP installment on your bill is taxed a second time. Add in activation fees and excise taxes and you will spend more per month vs paying cash. It is fixed that way. LOOK @ YOUR BILL!

66. KingKurogiii

Posts: 5713; Member since: Oct 23, 2011

well clearly your experience is limited with installment plans through carriers. there's no such EIP charge with OEM upgrade plans. the iPhone Upgrade Program is technically a zero interest if paid in 24 months loan for the iPhone and Apple Care from Citizens Bank. taxes and first month are paid down. the full amount of the loan for a 64GB iPhone 6S in TN is $959.13. i paid $117.79 down for taxes and first months payment and $36.58 a month which will either be for 11 months which equals $402.38 plus the $117.79 which would equal $520.17 and then i start over with an iPhone 7 insured again with Apple Care or if i wanted to pay the rest out the remaining 12 payments of $36.58 would bring it to the full retail price of a 64GB iPhone 6S, Apple Care and Taxes which is $959.13. no penalties for early pay off and no activation fees or any other fees unless you go beyond 24 months and if you do then you just have no sense at all.

43. RajRicardo

Posts: 503; Member since: Feb 28, 2014

Why do you want to worry about selling your old phone when you are replacing it with a new one as soon as it is released. I dont know about iphones but android phones suck when it comes to resale value. You cant even pay down payment for a new phone by selling your old one.

20. ibend

Posts: 6747; Member since: Sep 30, 2014

$34x12month = $408 so technically you just sold your 1 year old iPhone for around $250 to get new model :-/ (and then they refurbish it, and sell it for $450 lol)

29. sgodsell

Posts: 7599; Member since: Mar 16, 2013

You also left out a major item. You clearly forget that you get a better and cheaper plan if you BYOD. Not to mention you are not locked into a contract for two years.

55. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

With T-Mobile the plan is already cheaper, giving me more room to add installments. Example. With Verizon I was paying for 4 phones and one tablet at a cost of nearly $500 per month with 80GB of data shared with each line. Now with T-Mobile I have 4 phones and 2 watches and my bill is $335. The 2 watches are equal to the same payment I was paying for the tablet with VZW. I have 4 lines, but I pay for 3 and get the 4th free. The packe is less than $200 per month by itself. Everything else is installment payments on top end phones (2) Note 5, (1) S6 edge+ (1) S6 edge and (2) Gear S2. I am loving T-Mobile for this. Plus I always make an extra device payment per month on all of them. So I will be done paying in 12 or less vs the whole 24.

36. KingKurogiii

Posts: 5713; Member since: Oct 23, 2011

dunno where the $250 comes in but by your logic $250 just got this person a $650 phone. congrats to that person. the thing to remember is if you know you're going to upgrade every year it really doesn't matter.

3. darkkjedii

Posts: 31623; Member since: Feb 05, 2011

I generally do two flagships per year, one I'll buy outright, the other on installments. The more expensive one is done on AT&T Next, usually an iPhone.

4. AkoSiKuting

Posts: 88; Member since: Dec 09, 2015

bought iphone 6s 128gb and apple watch sport 42mm product red with one shot, not a problem to me. Installment is for android fanatics imo, try so hard to proof theirs can beat mine :)

5. Raito

Posts: 82; Member since: Aug 15, 2014

How much did you spend for iPhone 6S and  watch?

7. darkkjedii

Posts: 31623; Member since: Feb 05, 2011

I was gonna like your post, until I read the last part. Why try and start a flame war dude? Be better than the trolls. Anyway...good combo, I have the 128 6S Plus and the gold sport with navy blue band. Be better than the trolls.

8. kabiluddin

Posts: 279; Member since: Feb 28, 2015

Says attention seeking wh*re jacka** Snakeboy aka SuperNova aka Hallyu aka HugoBarraCyanogenMod.

10. vuyonc

Posts: 1091; Member since: Feb 24, 2014

Gr8 b8 m8 I r8 1/8.

11. MrFreeman

Posts: 63; Member since: Jan 29, 2016

If that phone is good for you then ok, but there's no need for that last comment. "iPhones" aren't better than androids, every phone has its flaws and some are more noticeable than others. It's about personal preference, I'm happy with my S5 as it does my tasks. In regards to whether you buy it outright or not, that's up to you. Some people prefer to pay upfront to avoid excessive charges from plans and those who pay on a monthly basis etc, may decide to spread payments for short-term management.

24. tomn1ce

Posts: 248; Member since: Mar 12, 2012

Sure Android fanatics get phones on installments plans. That's why I paid full price for my Galaxy Note 3 when it was released and the Moto X Pure Edition with plenty of customization two weeks ago. How much did the 6s 128GB model cost you? I bought the Moto X Pure Edition with 64GB and a 128GB microSD card for $529. The microSD card cost me $62. I feel like I got more for my money than you. Android works for me, if the iphone works for you, good for you. But don't go making stupid statements. I know plenty of people who buy iphones on installment plans and I don't sit on my computer bashing the way they acquire their devices.

25. Arch_Fiend

Posts: 3951; Member since: Oct 03, 2015

I just leased an iPhone 6s plus 64gb (Technically Instalments) so that last statement is invalid.

32. sgodsell

Posts: 7599; Member since: Mar 16, 2013

Akosikuting I guess you are proud of your iPhone 6s with that low resolution display (1334x750). I guess you are also proud that you spent close to $1000 for a device that has fast graphics. I always wonder how fast the iPhone 6s would really be if it had a Quad HD display. Basically 4 times the current resolution, just in case you don't know these things. Clearly you have been hiding under a rock if you think an iPhone 6s/6 is better than an any of the latest flagship devices that are not Apple. Even Apple fell behind the other flagships in camera quality. Apple is a joke these days.

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.