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Sell Your SmartphonesUpdates

Can You Sell a Phone You Still Owe Money On?

By March 5, 2018July 27th, 2021No Comments
Contract Signature - Owe Money

Updated On July 15, 2021

Everyone, from Steve Jobs to Bill Gates, has had experience pinching pennies. And, with the prices of smartphones today – we’re looking at you, iPhone X – it’s no surprise that many consumers are reconsidering their purchase. If you’re past the return period, however, your only option is to downsize. The question we’re often asked is: Can you sell a phone that you still owe money on?

The answer generally is yes, although we’ll touch on some exceptions and what you can do when your phone is paid off. Before then, we help you evaluate various selling and trading options and highlight what happens if you don’t pay off your phone once you sell it, potential termination changes and why selling your phone can help you get out of your current contract.

What Happens if You Sell a Phone That Isn’t Paid Off?

If you’ve purchased your phone in full or paid it off, you’re confident that you can resell it – after all, it is yours. It’s when you’ve purchased it through an Equipment Installment Plan (EIP) that you question whether you can sell your phone, especially if you’re under contract or if you’re obligated to return it to your carrier, as is the case with leasing. While this is a confusing area for users, you can still sell your phone.

Ok, so why can you sell a phone that isn’t paid off? Because of unsecured credit. If you browse through the fine print of your carrier’s EIP, you’ll likely find they do not place a lien on your smartphone, which means the provider retracts their right to repossess your phone and grants you legal ownership of it. That’s why EIPs are considered an unsecured credit.

That doesn’t mean, however, that you should stop making your payments. If you do, your carrier will blacklist your phone – also known as giving it a bad ESN or IMEI number. This number is accessible to other carriers, which means they may not activate your phone on their network if it carries a blacklisted IMEI or ESN number. That’s why it’s critical, whether you sell or keep your phone, to complete your EIP payments according to your contract with the carrier.

What Happens if You Sell a Phone That Hasn’t Been Paid Off and Has a Bad ESN?

While less than ideal, some people do decide to stop their payments after selling their phone, which causes the new owner to receive a cell phone with a bad ESN number. Depending on your carrier, you may not realize the status of your smartphone until switching providers. Verizon and T-Mobile, for example, often block phones with bad IMEI or ESN numbers, while Sprint and AT&T do not.

For buyers, this can be a sore point and lead them to wonder: Can you sell a phone that hasn’t been paid off, plus has a bad ESN? Yes, but it’s important to note that some resellers may not purchase phones with bad ESN or IMEI numbers. Fortunately, The Whiz Cells does. Reselling a blacklisted cell phone does require some additional steps, as we confirm that the phone was not stolen or lost by referencing the database of blacklisted numbers. We also pay 50% less for phones with a bad ESN/IMEI status.

After confirmation, your reselling and payment process proceeds like any other trade-in.

Selling a Leased Phone

Some carriers like Sprint allow you to lease a phone to save money on your monthly payments. At the end of your lease, you then turn in the phone to the carrier for an upgrade instead of fully owning the device. You also have the option to buy out the phone at the end of your lease instead of upgrading – this allows you to keep the device and stop making monthly payments.

You may be wondering if you can sell a leased phone the same way that you can sell one on an equipment installment plan. Unfortunately, the answer is no. A leased phone must be paid off and bought out before you can sell it. Otherwise, you must return it to your carrier.

What Happens if You Don’t Return a Leased Phone?

This depends on where you are with payments. Some carriers let you continue paying the fee to lease the phone. However, if you’re late with payments and have yet to give back the phone once your lease has expired, this information may end up on your credit report.

If you have finished paying off your phone lease and now own the phone, you can sell it to The Whiz Cells just like any other device!

Can You Sell a Phone Under Contract?

As already explained above, you can sell a phone under contract when you still owe money on it, due to the line of unsecured credit being extended to you.

For those who’ve paid off their phone, canceling at this stage is in your advantage. Should you want to end the contract, you won’t be leveled with an early termination fee. If the phone isn’t yet paid off, you will face a fee in varying degrees based on how much you currently owe.

If you still owe money on the phone, selling it while it’s still under contract essentially kills two birds with one stone. With the money you receive from the sale, you can pay off the remaining balance. At the same time, this move allows you to cancel your contract, helping avoid the early termination fee. Not paying off the phone after selling it to a new owner causes the carrier to blacklist the device, thus keeping it blocked and prevents it from being used.

As a third strategy to get out of your contract, consider transferring the phone to a new owner, who will resume responsibility for the device, including any payments and termination fees.

Sell and Pay off Your Phone with The Whiz Cells

At The Whiz Cells, we’re an electronics recycler that helps people looking to upgrade their phones at a reduced cost, or people looking to sell their phones at a fair price. With our competitive rates, as well as free shipping and 72-hour payments, we ensure selling and purchasing your smartphone is seamless. To learn more about our prices and selection, visit our shop and eBay store. And if you have questions, don’t hesitate to contact us!