Find Out Why Phone Carrier Trade-in Programs are a Rip off

To someone who loves having the newest and best of everything, trade-in programs seem like a godsend. They let them have the chance of changing up their phone for a new one annually, or in some cases even twice a year. All for a subsidiary fee that is costs far less than the actual price of the phone. Just hand over your old phone, and you’ll be provided with the latest model, and then return it next year to get the one that comes after it. Doesn’t that sound sublime?

The offer sounds substantial mostly because it is advertised that way. Phone carrier companies make sure to display these offers to the public that it feels like a generous deal, one that is geared solely towards benefitting customers. Just take a look at T-Mobile’s CEO John Legere’s words, when he first introduced the company’s plan to offer a trade-in program, following which users could get a new phone every six months, unlike other companies that were offering new phones after two years at the time:

“At some point, big wireless companies decided for you that you should have to wait two years to get a new phone for a fair price. That’s 730 days of waiting. 730 days of watching new phones come out that you can’t have. Or having to live with a cracked screen or an outdated camera,” said John Legere, president, and CEO of T-Mobile US. “We say two years is just too long to wait. Today, we’re changing all that with the launch of Jump! Now, customers never have to worry about being stuck with the wrong phone. And, yes – it’s really as good as it sounds.”

Doesn’t that sound exciting? True, the offer is legitimate. But what you as consumers are unaware of, are the unnamed surplus charges you would have to pay, if you chose to opt for this program. And it is with sneaky strategies like these, that trade in programs offered by there carrier companies end up charging you more than your phone is worth, ultimately ripping you off.

What they offer

Before we get down to how much these deals would actually cost you in the long run, lets first establish what they essentially offer you, and how they came to be. And to understand how these deals came into being, we need to understand what came before them. As most of us know, when buying a new cell phone most of us had to enter at least a two-year contract with our desired carrier service, since most of us can’t afford to buy a phone outright due to their extremely high prices. However, this meant we became their “loyal” customers, and it was pointless for us to try and buy another phone for that period of time since we would still be bound by that contract and would have to pay our monthly phone bill anyway. Realizing this frustrating system could be exploitable, it was then that phone carrier services introduced trade-in programs.

As mentioned above, these trade-in programs let you change your old phone for a new one, as early as six months after you bought you entered into a contract with the company. On face value it offered customers the same method of paying off their phone in increments, without which some people couldn’t afford to own smartphones, while at the same time letting them upgrade to a new handset every couple of months, so they could “keep up with the trends.” All they’d have to is pay a fraction of the cost of the new phone when trading in, a charge significantly lower than one they would have to pay if they were buying the whole phone instead.

Here’s the thing though. The plan is utterly deceptive.

Doing the math: How much do they really cost?

To explain the actual costs of these programs, I’m going to be using the Sony Xperia Z as my example, to help compare the costs you would pay with the trade-in programs against the actual retail price of the phone. Granted the phone used in this example is quite old, but the data collected on it was when it first came out and is still comparable for our purposes. Now to start counting.

While you are only made aware of the small deposit both at the time when you’re starting the plan and whenever you decide to trade in your phone, there are certain charges that, while not completely hidden, are not fully explained to you, that you have to pay as a part of the plan. Taking the trade-in program offered by T-Mobile’s “Jump!” program when first announced (around the same time the Xperia Z was introduced) as our first example, you would have to pay around $50 – $70 on a Value plan, $100 up front for the phone, then $20 a month for 24 months (to pay off the rest of the phone), and finally $10 a month as your subscription to the “Jump!” program.

So, if you decided to change your phone after six months, this is the total cost of your first phone:

• Xperia Z down payment = $100
• Xperia Z 6 monthly payments = $120 – $150
• Xperia Z Jump! program payments = $60
• Total after 6 months = $280 – $310
• Full retail price of an Xperia Z = $580

And if you decided to change your phone after a full year, this is how much you actually pay:

• Xperia Z down payment = $100
• Xperia Z 12 monthly payments = $240 – $300
• Xperia Z Jump! program payments = $120
• Total after 12 months = $460 – $520
• Full retail price of an Xperia Z = $580.00

Why you’re better off without them

Taking a look at the above data you might start thinking these plans aren’t such a bad idea. After all, if you decided to change your phone after six months, then you would save around $300 dollars on your old phone. But you have to remember the fact that you don’t really own the phone, and you are in reality just renting it from the company. To get your next phone, you would first have to give your old phone back to T-Mobile, and if you accidentally cracked the screen, got it wet, or damaged it in any other way, you would have to pay more than $100 for your next phone (probably a lot more).

Another thing you notice from the data is that your “savings” decrease over time, to the point that after a year you would have already paid of most of what you really owed for the device, a price you would have had two years to pay off if you had instead opted for a regular plan. Not to mention the fact that you’re still under a two-year contract and would have to keep paying for the next year.

Looking at another example, the iPhone 6 (the data for which was once again collected when it was still relatively new) was surveyed over different popular phone carriers, over the price they would pay for it in their trade-in programs, the ones you were basically trading in a phone you owned (no previous contracts) for a new one from these companies. It was found that on average 25-40% lower than what you would get if you were to sell your phone to private third party, and that is in no way a negligible difference. What’s more is that these companies offer the amount in the form of store credit, meaning you’d have to buy another phone from them only. Seems a little unfair right?

What you can do instead

Suffice it to say; the trade-in programs are far from economical. Sure, they do appear convenient, and you might save some money if you were to smart when using these plans, while at the same time constantly changing your phone like you always wanted to. Honestly, though, you would be better off just buying the phone upfront, and then selling it off to private third-party companies that buy used phones. In fact, reselling is by far your best option when wanting to trade up to a new smartphone, since you’re guaranteed to gain the most you can out of your phone. It goes without saying, that the more money you’re able to get out of your old phone, the more you’ll have to buy a new and better one. And one of the best places to resell your old phone is right here, at swifttechbuy.com.

When we say we’re one of the best places to sell your smartphone, we’re not kidding. After all, we offer instant quotations to all our prospective clients, no matter what the condition of their phone, and offer quite fair and reasonable prices. We also offer free shipment; you don’t have to come to us to deliver your phone, ship it to us and we’ll instantly pay you online or with a check. If convenience was all the trade-in programs had going for them, then reselling your phone couldn’t ever be a more attractive option than it is with our services.