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How Much Is Leasing My Cell Phone Really Costing Me?

By October 6, 2016No Comments

When purchasing a cell phone, you have a number of options. Usually these options are provided by your cell phone carrier, and the charge is added to your phone bill. “Can I buy a phone without a plan?” you may ask. Yes, but the marked up price for buying the phone at retail rather than through your carrier is so high that it doesn’t pay to do so unless you really don’t trust that you’re going to be able to stay with a carrier for two years.

Assuming you decide to go through your carrier, your choices are to buy the phone at a discounted price, with the payments spread out over your 24-month commitment, or lease a phone, in which case you’ll still get charged every month, but you’ll be able to turn in your phone for an upgraded model every year. But is it cheaper to buy a phone outright or to lease?

Buy a Phone vs. Lease a Phone

If you choose to buy the phone, you’ll probably end up paying close to $800 over two years, or about $400 a year. Once those two years are up, you’ll have to pay for a brand new phone under the same terms, unless you want to keep the one you have. If you lease a phone, though, which may be called something like an “early upgrade” plan, you’ll pay around $30-$35 a month for a 64G phone for a year, paying somewhere between $320 and $450 total. So, depending upon which phone you get, it may be a little cheaper to lease, or it may be slightly more expensive.

Keep in mind, if you lease, you’ll always have the newest phone every year. However, what this does not take into account is that once your ownership plan is complete, you will own your phone — and you can sell your phone at a technology resale site like When you consider what you might make from selling your phone, buying potentially becomes much cheaper.

What it comes down to is this: Do you have to have the newest phone every year, and do you want to be tethered to your carrier, making extra payments every month for as long as you want to keep getting the newest technology every year? If you’re content with a new phone every two years and want to save some money, buying the phone is probably the best option.

Rent-to-Own Cell Phones

What about rent-to-own cell phones? Is this an option? With an early upgrade plan, you may have the option of declining the upgrade, choosing instead to just continue to pay for your existing phone until it is paid off. You don’t get the new phone, but your current phone is yours once it’s paid for. Essentially this is just converting your early upgrade plan into a buy outright plan. If you’re not sure yet which way to go, this may be the option for you to choose.