AT&T Pricing Weirdness

[Tbone]

Man, this was so confusing. I'm eligible for an upgrade. I have an iPhone 5. I've been paying $85/mo. If I upgrade before the 30th, I can get $200 back towards the new phone, so I'd just have to pay the fee and taxes. That made it tempting, but then it got complicated.

If I don't upgrade at all, I can switch plans and only pay $65/mo. This same plan with a phone upgrade/2 year contract would cost $80/mo. So I wouldn't have to worry about the subsidized price, but I'd still be paying $15/mo more. Hmm...

Then I find AT&T's Next program, which tries to be as complicated as possible. I could upgrade my phone off contract and pay the full price of the phone split over 20-24 months (but actual payments would be over 12-18 months). This means I wouldn't have to pay the subsidized fee ($200) or the upgrade fee ($40) - only the sales tax, unfront. I'd then be paying for the plan ($65/mo) PLUS the phone payment ($27 or $35/mo).

The weird part is after 12 months (on the higher monthly plan) or 18 months (on the lower monthly plan), I could upgrade my phone again and my monthly payments would basically reset. The months I had remaining on my other phone would be forgotten (since I traded that phone in).

This leaves me with three or four options, and it isn't clear which is the best one in the long run.

1. Don't upgrade. $65/mo. Lose $200 trade in value.
2. Upgrade with 2 year contract. Trade in for $200 and pay subsidized cost, $40 fee, and taxes. Pay $80/mo for 2 years before upgrading again.
3. Upgrade with Next on 18 months. Trade in for $200 and pay taxes and $92.09/mo for 18 months. Get a new phone every 18 months and continue paying roughly $92/mo.
4. Upgrade with Next on 12 months. Trade if for $200 and pay taxes and $97.50/mo for 12 months. Get a new phone every 12 months and continue paying roughly $97.50/mo.

I think if I can milk my iPhone 5 for as long as possible, obviously I'll save money for as long as I can do that, though I risk losing the $200 value that the phone has now. Eventually I will want to upgrade, though, and the question then becomes is it better to find a phone on eBay or something and continue the $65/mo, start the Next system of endless upgrades, or go back to the 2 year upgrades on contract?

I think for now, paying $65/mo sounds very appealing compared to the $85 I've been paying. I'll lose unlimited data (I was grandfathered in) and will only get 2 gigs a month, but I'll also get unlimited talk and text, compared to the 450 minutes and 1000 messages that I have now.

Some math:

NEXT 12 Month
$65 x 12 months = $780
$97.5 x 12 months = $1170
$390 difference - $200 trade in = $190 / 12 months.
$15.83/mo
You've paid for 65% of the phone

NEXT 18 Month
$65 x 18 months = $1170
$92.09 x 18 months = $1657.62
$487.62 - $200 trade in = $287.62/ 18 months
$15.98/mo
You've paid for 82% of the phone

2 year contract
$65 x 24 months = $1560
$80 x 24 months = $1920
$360 difference + $40 upgrade fee = $400 / 24 months ($200 trade in and subsidized cancel out)
$16.66/mo
You've paid for 100% of the phone

They all seem to be roughly the same. How quickly you pay determines how quickly you can upgrade.

[Avzeke (Khr0n1k)]

The downside to NEXT is you have to trade in the phone and it has to be in working condition without a cracked screen if you want to do the early upgrade. For me I like to have my last phone around as a backup if I lose or break my current phone, you lose that ability with next. Also the loss of unlmited data. That is why I haven't gone with next personally.

[Akiya]

Sounds like the Easy Pay that we have at Sprint now, except for the $65/mo you get unlimited internet, too (and unlimited talk/text). Still pay over time for the phone ($27/mo. for the 16gb iPhone 6), and turn in the phone in 12 months to start another payment plan with another phone. Only sales tax due at purchase (depending on credit check).

Very good chance that 2-year subsidy pricing will be going away for ALL carriers (Manufacturers currently reimburse the carriers and that may stop, being as smartphones are getting so much more expensive). Pretty much all of the carriers are offering a no-contract lease-to-own (or upgrade early) option like the Next program. Which one you choose is how often you want to upgrade; 2-year if you hang on to your phone for a long time (and want to trade it in for a monetary value towards the next one), pay-over-time if you want to get whatever new one comes out each year (turning in the device to nullify the payment plan and start a new payment plan each upgrade). The second method does not give you the option of having any spare or backup phones, unless you keep your iphone 5, but the first method means that if you keep any phone as a spare, you're paying more out of pocket in store.

The bottom dollar is that you either get a discount on the phone (subsidy with 2-year contract) or a discount on the plan (Next  or other pay-over-time programs). You generally are only paying a couple bucks difference each month, except with the pay-over-time, you're paying less in store (not including trading in old devices), and you can upgrade more often.

The real question is: WTF are you doing in an iPhone? lol

[Eroz]

Have you looked into staying off contract, and finding somone who's selling there iPhone 5s at a cheap piece?

[Tbone]

I do currently have unlimited data, but it throttles after about 4 gigs anyway. If I keep the unlimited data, I can't get the $65 plan REGARDLESS. I'd be stuck paying the $80-90 tier even without getting a new phone.

AT&T definitely has superior coverage in my area, so I'm not looking to switch carriers.

I don't think it's worth upgrading from a 5 to a 5s. I'm kind of interested in the Note 4 simply because of the Gear VR coming out with it, but I may wait a generation cycle on that for them to perfect it. I also don't want to have to re-buy all of my apps on a different OS.

What I may do is see if I can use my 5 for another year (it's still in great condition) and then sell it in a year and buy a 6 for around $250-300 while the 6s ones are coming out. If I always buy a year behind the curb, I can keep a low monthly while only spending $2-300 total on the phone.

[Subb]

That's crazy. I pay £16 a month for my iphone 4 on a 'rolling contract' (I can cancel at any time). Granted I don't have unlimited data though (1GB).

[Da6onet]

I switched to ting in july from verizon and cut my bill from 175 per month to 75 for the exact same usage. You may want to run a price projection with them.

I'll split the $50 referral fee with anyone who uses me as a reference :-)