When Apple, Samsung or Google announce a new smartphone, it’s big news. The latest iPhone, Pixel or Galaxy phones are status symbols in their own right. Though there are more manufacturers, these are among the most popular in the U.S.
Not long ago, companies like Nokia, LG, Blackberry and Motorola were churning out phones that sold quite well. Some went on to become the bestselling phones of all time. Remember the Motorola Razr? Kim had one in hot pink! Tap or click here for 10 of the most iconic phones we miss.
I recently purchased a brand new phone, but even before then, I realized I had made a big blunder with my last one. Keep reading so you don’t make this costly mistake.
Here’s the backstory
In late 2019, I went to replace my iPhone X. It was a great phone, but I was ready for an upgrade. I wanted an iPhone 11 Pro Max with 512 GB of storage — the latest and greatest from Apple.
The salesperson asked if I would consider leasing the phone. He said I could pay a low monthly fee, which would stay about the same if I upgraded to a new phone the following year.
It sounded like a good idea! I signed an agreement for a lease and kept my old iPhone X to give to a friend.
We all know what happened in 2020. The pandemic hit, and there was too much going on for me to go through the trouble of getting a new phone. In 2021, I moved out of my apartment, delaying things further.
When Apple announced the iPhone 14 at its Far Out event this year, I watched it live while covering the story for Komando.com. The new phone features excited me enough that I ordered the 14 Pro Max with 1 TB of memory from Apple’s website a few days later. And I paid the full price upfront to own it.
Why didn’t I consider a lease? Well, I did the math to figure out how much I had paid for my 11 Pro Max from the day I got it until the present. And yikes, my monthly payments totaled more than the original $1,099 price I would have paid to buy it outright.
When my new 14 Pro Max arrived, I took it to T-Mobile so I could turn in my old phone. Had I purchased my iPhone 11 Pro Max, I could’ve kept it or traded it for some money. Instead, the store took it back, and I had nothing to show for it.
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When leasing makes sense
Of the three major carriers, T-Mobile is the only one to offer a leasing option still. Sprint, now T-Mobile in everything but name, had its leasing program called Flex Lease, which T-Mobile terminated last year.
Verizon doesn’t offer a leasing program, nor does AT&T. They do, however, offer flexible payment plans with upgrade options. You can turn in your phone for a new one before you finish paying it off. But if you follow through with all the payments, the phone is yours to keep.
If you plan to upgrade to the newest model every year or so, leasing may be right for you. You’ll have lower monthly payments than you would for buying a phone, and you can get an upgrade later with similar terms. There are several factors here, such as which phone you lease and which one you upgrade to when the lease is over.
For people with low credit scores, leasing can offer a chance to get a phone they would otherwise be unable to purchase.
Let’s use a real-world example to figure out how this can work for you.
T-Mobile’s JUMP! On Demand leasing plan offers the iPhone 12 with 64 GB of memory for $75 down plus $26.84 for an 18-month lease. That comes to a total of $558.12. The phone’s list price is $699, so you save about $141. At the end of the lease, you can pay a buyout fee to keep the phone or return it and upgrade to a new one.
You don’t have to wait 18 months to get a new phone. You can bring your leased device to a T-Mobile store and swap it out up to once a month. That sounds like more trouble than it’s worth, but you have the option.
Why leasing is a bad idea
When turning in your old phone, figure out the total lease cost of the new phone even if you don’t plan on keeping it for the whole 18 months. If the total cost is less than the list price, you’ll still come out ahead.
But it’s not a huge saving and you won’t ever own that phone unless you pay a buyout fee for it on top of your lease payments.
When you buy a phone outright, you can more easily switch carriers if you want to. You’re not locked into paying for a phone every month. If you want a new phone, you can trade yours in for some credit towards a new phone or give it to a friend or family member who could use it.
With T-Mobile being the only major carrier still offering leases, most people won’t have this option. And if you do want to lease one through the Jump! On Demand plan, your phone options are minimal.
But if I could go back in time, I would have bought my iPhone 11 Pro Max rather than leased it. I could have received nearly $300 towards my new iPhone 14 Pro Max, according to this helpful site. Tap or click here to see how much your phone is worth.
Don’t make the same mistake I did.
Keep reading
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Upgrading your iPhone? 5 steps to take with your old phone before you sell it or give it away