Today, Verizon unveiled its new Edge plan, making it the latest carrier to jump on the phone trade-in bandwagon.
The fine print of the plan requires you to make 24 monthly payments toward the full off-contract purchase price of your phone. Verizon will let you trade-in your device and get a new one after just 6 months, but your old phone will need to be at least 50% paid off before you can do so.
Like with T-Mobile’s Jump! and AT&T’s Next plans, you’re not locked in to a two-year contract. But you also miss out on Verizon’s two-year contract discount. This is no small detail – Verizon’s phone service is more expensive per month than T-Mobile because that phone subsidy is priced in to the Verizon’s existing plans.
But don’t just take my word for it. Take a look at how Verizon’s Edge plan stacks up with the competition after two years of unlimited talk and text service. These calculations assume you want to get a new top-tier smartphone like the iPhone 5 every 12 months.
Verizon Edge
Read more about the Verizon Edge plan.
Upfront cost of a new iPhone 5: $0
Monthly device payment: $27.08/mo. for 12 months, or $325.00
Upfront cost of your next phone in 2014: $0
Monthly device payment: $27.08/mo. for 12 months, or $325.00
Unlimited talk, text, and 2GB of data: $100.00/mo. for 24 months, or $2,400.00
Total cost of Verizon Edge after 2 years: $3,050.00 plus tax
Verizon Standard 2-year Contract
Upfront cost of a new iPhone 5: $199.99 (subsidized)
Upgrade/new activation fee: $30.00
Resale value of your old iPhone 5: -$300.00 (estimated)
Upfront cost of your next phone in 2014: $649.99 (unsubsidized)
Resale value of your next phone: -$300.00 (estimated)
Unlimited talk, text, and 2GB of data: $100.00/mo. for 24 months, or $2,400.00
Total cost of Verizon’s standard 2-year contract: $2,679.98 plus tax
AT&T Next
Read more about the AT&T Next plan.
Upfront cost of a new iPhone 5: $0
Monthly device payment: $32.50/mo. for 12 months, or $390.00
Upfront cost of your next phone in 2014: $0
Monthly device payment: $32.50/mo. for 12 months, or $390.00
Unlimited talk, text, and 3GB* of data: $119.99/mo. for 24 months, or $2,879.76
Total cost of AT&T Next after 2 years: $3,659.76 plus tax
*AT&T does not offer a 2GB data plan.
AT&T Standard 2-year Contract
Upfront cost of a new iPhone 5: $199.99 (subsidized)
Upgrade/new activation fee: $36.00
Resale value of your old iPhone 5: -$300.00 (estimated)
Upfront cost of your next phone in 2014: $649.99 (unsubsidized)
Resale value of your next phone: -$300.00 (estimated)
Unlimited talk, text, and 3GB* of data: $119.99/mo. for 24 months, or $2,879.76
Total cost of AT&T’s standard 2-year contract: $3,165.74 plus tax
*AT&T does not offer a 2GB data plan.
T-Mobile Jump!
Read more about the T-Mobile's Jump plan.
Upfront cost of a new iPhone 5: $145.99
SIM card fee: $10.00
Monthly device payment: $21/mo. for 12 months, or $252.00
Upfront cost of your next phone in 2014 (estimated): $145.99
Monthly device payment: $21/mo. for 12 months, or $252.00
T-Mobile Jump plan cost: $10/mo. for 24 months, or $240.00
Unlimited talk, text and 2GB of data: $60/mo. for 24 months, or $1,440.00
Total cost of T-Mobile Jump! after 2 years: $2,485.98 plus tax
Note: T-Mobile does not offer two-year contracts.
So, class, what did we learn?
Well, first of all, we've learned that cell phone service is expensive. Yikes!
When it comes down to price alone, T-Mobile’s Jump! plan is the clear winner. The phones themselves are pricer at the carrier, but service is far cheaper. This is because, as said, AT&T and Verizon build the price of phone subsidies into their service plans. Next and Edge subscribers wind up paying for a subsidy that they don’t even get.
AT&T and Verizon’s standard two-year contract plans are a bit pricer than T-Mobile’s, but that’s to be expected. They’re premium carriers with better service. Verizon boasts a largely complete nationwide 4G LTE network; AT&T claims their 4G is the fastest and most reliable (where you can get it). Whether or not their increased cost is worth it, well – that’s up to you and how much you prize fast and consistent data service.
Perhaps the most important lesson here is this: Verizon and AT&T’s new trade-in plans may be convenient, but they’re costly in the long run. You’re better off staying with your current contracts and selling your old smartphones when you buy a new one. As you can see, you’ll save a bundle.
Verizon will begin offering Edge August 25. You must have a Verizon “Share Everything” plan to take advantage, however – those with grandfathered unlimited data plans need not apply.
From Michelle on July 22, 2013 :: 11:28 am
I’ve been considering switching to Walmart’s unlimited talk, text, and data plan for $50 a month. You have to buy the phone, but it appears I’ll save a bundle. Am I missing anything here???
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