The Wirecutter, The New York Times site for product evaluations, has lots of advice on the best gadgets, but also has ideas on how to buy them in a smarter way. I talked to Andrew Cunningham, lead editor there, about how he thinks we should "buy" a cellphone: by leasing it.
At the beginning of the smartphone era, you pretty much had to buy. You could either buy it outright for $600 to $700 or you could get it for $200-ish with a two-year contract and then own the phone at the end. Carriers do that to reduce sticker shock, and then they charge you as much or more in your actual bill over the course of your two-year contract. In return, AT&T or Verizon, or whoever, basically owned you.
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When you reached the end of the contract and you had paid for the phone, it was two years old and trashed, and so you'd go back and get a new phone and start all over again. The barriers to leaving were super high with big cancellation fees.
Leasing. It's similar to the old system, as you're still paying for the phone over the course of your contract. But it's not so much a hidden fee now. They specify the monthly price upfront and it's usually a separate line item on your bill, so you always know what you're being charged for.
With a lease, they'll push you near the one-year mark to trade the phone in for a new one. Phones don't get faster or bigger at the same rate that they used to, but there is a certain comfort to always having the latest.
This way you always have the best camera, always have a phone that's getting software and security updates (though for some Android phones, that's a whole other conversation). You don't have to worry about normal battery-life degradation that starts setting in once you've had a phone for a year or two.
And I'm talking about the practical stuff, but if you're the kind of person for whom a new phone is a status symbol, hey, that's fine, too.
If you don't mind having an extra $20 to $30 (per phone) line item on your bill, it's not a bad way to go.
The downside is if you have, say, a family plan, you never end up with phones you can hand down to other family members. At this point, my family has a three-stage phone cascade where I get something new, my wife gets my old phone and my mom gets her old phone.
You'd have to look at your bill to decide. I have a friend who has one of the old unlimited AT&T plans from way back in the early iPhone days, and we were chatting about it, and it looks as if she could potentially save $20 to $30 a month by giving that up and moving to a more modern plan with a leased phone.
One benefit for the companies is that they get to double dip a little bit after you send your old phone back to them every year. For example, there's a certified pre-owned iPhone from Verizon. Some person probably already paid Verizon like $350 or more to use that phone for a year. But they fix it up and certify it and resell or lease it to you for around two-thirds of its original price.
Nearly every time I get a new phone, I have to spend a lot more on extras — a case, new cables and rechargers to fit the new connectors. That's not insignificant. So a new phone every year is going to cost me more on that end.
Yup, totally true, and something to think about. Though if I have a case that's still in good shape after a year or two, I'm doing pretty well.
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