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Can You Sell a Phone You Still Owe Money On?

By March 5, 2018March 21st, 2023No Comments

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Updated for 2023

Everyone, from Steve Jobs to Bill Gates, has had some experience pinching pennies. And, with the prices of smartphones today (we’re looking at you, iPhone 13), 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 questions we’re most often asked are, “Can you sell a phone that you still owe money on?” and “Can I sell a locked phone?”

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’ll help you evaluate various selling and trading options and highlight what could happen if you don’t pay off your phone before you sell it.

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

If you’ve purchased your phone in full or have paid it off, you can be confident that you can resell it. (After all, it is yours.) It’s when you’ve purchased your phone or your device through an Equipment Installment Plan (EIP) program and are making payments on it that you can run into some problems. This is a situation in which you should question whether or not you can safely sell your phone. This is especially true if you’re under contract or if you’re obligated to return it to your carrier, as is the case when you lease your phone from the carrier. 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? It’s because of unsecured credit. If you browse through the fine print of your carrier’s EIP, you’ll likely find that they do not place a lien on your smartphone, which means the provider retracts its right to repossess your phone and grants you legal ownership of it. That’s why EIPs are considered “unsecured credit.”

That doesn’t mean, however, that you should stop making your payments. If you do, your carrier will blacklist your phone. This is also known as giving it a bad ESN or IMEI number. This blacklisted number is then accessible to other carriers, which means they may not activate your phone on their network if it carries a bad 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.

This information may leave you asking, “How do I know if my phone is paid off?” To check if a phone is paid off, you’ll need the IMEI number to check if the IMEI is financed or not. On iPhones, this number is engraved on the back and consists of 15 numbers. (Conversely, an MEID number is 14 numbers; if you need this number, ignore the last number in the IMEI number.) To locate an IMEI/ESN/MEID number on an Android phone, you’ll need to access settings. Choose the About phone option, then select Phone Identity, Status > MEID (or similar). If you’re wondering how to check if a phone is still on contract, the most helpful way is to contact your network provider.

Learn more about how to sell your bad ESN or bad IMEI phone by reading this article at The Whiz Cells.

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

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; AT&T does 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, however. We also confirm that the phone was not stolen or lost by referencing the database of blacklisted numbers. In addition, The Whiz Cells pays 50% less for phones with a bad ESN/IMEI status.

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

Can You Sell a Phone Under Contract?

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

For those who have paid off their phones, canceling at this stage is to their advantage. You won’t be leveled with an early termination fee if you want to end the contract. If the phone isn’t yet paid off, you will face a fee in varying amounts. This amount is 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. You can pay off the remaining balance with the money you receive from the sale. At the same time, this move allows you to cancel your contract. This helps you 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 preventing it from being used.

Selling a Leased Phone

Some carriers allow you to lease a phone to save money on your monthly payments. At the end of your lease, you turn in the phone to the carrier for an upgrade instead of assuming full ownership of 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 your payments and have not returned 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.

Last Resort: Negotiating with Your Carrier

While service providers make the most money by enforcing the rules of their contracts, there are special cases where they may allow a customer to bypass termination fees. These exceptions include relocation outside a carrier’s area, serious illness, and military service. You may also be eligible for termination forgiveness or reduced payments if you have serious financial problems. Whatever the case, speaking with your service provider directly to negotiate your contract is best.

Sell and Pay off Your Phone with The Whiz Cells

The Whiz Cells is an electronics recycler that helps people looking to upgrade their phones at a reduced cost. We also offer a great option for those who want to sell their phones or devices at a fair price. With our competitive rates (as well as free shipping and Stupid Fast Payments), we ensure selling your smartphone or unused device is a seamless process. Selling your phone to The Whiz Cells is a quick and easy way to get top dollar for your phone or tablet.

To learn more about our prices and selection, visit The Whiz Cells and check out our eBay store. If you have any further questions, don’t hesitate to contact us!