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Continued: Tech Tips: New phone plans akin to renting _ pay hundreds more for the right to trade in

  • Article by: ANICK JESDANUN , AP Technology Writer
  • Last update: July 24, 2013 - 5:40 PM

Cost analysis: Normally, you pay $200 up front, so for a $650 phone, $450 is the minimum premium you pay to upgrade more frequently. If you haven't reached the 50 percent threshold yet, you'll be paying even more. Upgrade every six months as allowed, and you face 12 additional monthly payments over two years (six each year). Those 12 payments add up to $325, assuming the same retail price for the Galaxy S4 replacement. With the additional $450 you're already paying over the normal way of buying phones, you're paying an extra $775 over two years to upgrade every six months. As is the case with AT&T, you might be better off breaking a contract and trying to resell the old phone, but Edge removes the hassle.

Bottom line: Get it only if you plan to upgrade at least once a year and don't want to deal with the hassle of reselling your old phone. But try to at least wait out a year, rather than succumb to temptations after six months.

— ANOTHER LOOK

I can wait two years for a new phone rather than pay several hundred dollars extra. So can a lot of people I know. But I'm sure there are a lot of people who absolutely must have the latest and the greatest.

If you upgrade every other year, these are your additional costs over two years: $390 with T-Mobile, $450 with Verizon and $568 with AT&T. If you get insurance through T-Mobile anyway, then the additional cost is just $198. If you upgrade every six months, you pay an additional $690 over two years with T-Mobile and $775 with Verizon. If you get insurance, the additional cost with T-Mobile is $498. You can't upgrade that frequently with AT&T. Once again, calculations use Galaxy S4 prices and assume the same prices for the upgraded model.

If those are the prices you're willing to pay for the newest phones, by all means, go for it.

Several decades ago, people used to rent landline phones from AT&T. Once the phone company started letting people buy their own phones, people realized the one-time fee was more economical. But there were people who kept renting.

With landline phones fading, it appears phone companies have stumbled upon a new way to get people to rent.

___

Anick Jesdanun, deputy technology editor for The Associated Press, can be reached at njesdanun@ap.org.

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