Leasing is usually more expensive than buying but lease payments are less than loan payments. That's why most people lease. Also they like the fact they don't have to hassle with selling the car or getting a low ball trade-in.
I just don't understand why they can't offer the same rates as T-Mobile or even cheaper. Then again, if I was a shareholder, I'd be screwing you too because I want money.
Not to mention you can get a nicer car for the same amount and/or get a new car every few years.
The whole idea of leasing a phone doesn't inherently turn me off. It's the double-speak from the carriers. In the traditional model, about $20/month went to paying for the phone subsidy ($650 for a 16GB phone - $200/ 24 months = about $20/month).T-Mobile's plan reduces the monthly service by that $20 once the phone is paid for. From everything I've read, AT&T and Verizon don't, even though for years we were told that part of our monthly service fees covered the phone.
I don't have an issue with the idea of renting/ financing of a cell phone.
I don't have an issue with paying for goods & services.
I DO have an issue with paying for the same thing twice.
But, unfortunately, a lot of us will end up doing these plans, because we don't want to have to wait the full 24 months to get another phone (since they're more strict with the upgrade timeline now), and don't usually have $650 to just plunk down in a lump sum for a new phone (although even if you do, you're still double paying anyway).
Really? I can think of things that are hard to wait 2 years for, but a phone is not one of them.
What am I missing? You pay the phone's price over 2 years (so let's take an iPhone worth $700), and you're paying $350/year, but in order to upgrade in 6 months time, you have to fork up the total $350 price tag AND trade in your phone...so essentially, you're renting a phone, but if you keep it for 2 years, you've paid it in full and you STILL have to trade it in??
What if are we not paying for the same thing twice? What if that extra is to cover the cost that you don't have a contract and as such are not a committed source of income. Compare a apartment on a month to month agreement and a lease. The Month to month is higher because you are not a committed source of income.
Since the rates of AT&T and Verizon are the same no matter which method you choose (traditional vs outright purchase). It's logical to conclude that customers are being double charged for the pleasure. I suspect that we may see some changes to these plans in a year or so after the carriers realize that the target audience isn't fooled so easily.
Rent-a-Center comes to the phone business. Pay waaaay too much for something just because you want it now. Slime buckets.
Then the carriers have been lying to us all along.
It's really simple math. We've been sold subsidized devices while being told that part of the monthly fee is going to paying off the subsidy.
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Lying to us would be a Surprise? Please show me where ATT or Verizon says that part of your monthly is to repay subsidy. I don't think they have ever said that...In fact just the opposite.
It may be math but it does not have to be simple math as everyone is assuming. We really do not know how they do this. Anyone who knows is not allowed to tell and those who think they know are guessing. I'm sure of one thing- they do it in the most profitable way possible. I'd bet that there are tax incentives at play for about 36% of it. I also do not think they account for it on a account by account basis, but rather as a total cost to company as a business development cost.
I should confess that I do not believe the proposition that I offered to be true, just that I wanted to offer another way to see what they might do. The true fact is that we do not know how this works and that is by design. If was as simple as everyone seems to think it is why, would they not just say so? In fact they say that there is not a portion of your monthly fee that is for subsidy. So again are they lying?
Then the carriers have been lying to us all along.
It's really simple math. We've been sold subsidized devices while being told that part of the monthly fee is going to paying off the subsidy.
Exhibit A
If a non-contract iPhone cost $650 and you only pay $200 in the store for it, where is the extra $450 coming from?
Answer: It's pretty obvious that they're not writing it off. So it must come from your monthly fee.
Exhibit B
Early Termination Fees: If you break your contract early, you have to pay to "cancel your contract"
Answer: It costs the carriers very little to remove you from their system. But that's not the reason for the ETF. Since we already know the carrier isn't going to write off the remaining amount of the phone, the logical answer is that the ETF covers any remaining portion of the device itself. Standard ETF on a smartphone is $350 (The difference between the cost and ETF can be explained by volume discounts. A discount of $100 per phone when you are buying millions seems reasonable). Fortunately, the carriers also reduce the ETF for each month you've paid into the contract (and paid off your phone). By around the 20th month, you've completely paid off the phone and no longer have an ETF.
Exhibit C
T-Mobile: T-Mo actually separates the cost of the device from the cost of the service. The new service plans have been reduced in cost compared to the old model where the subsidy is included in the monthly fee.
Since the rates of AT&T and Verizon are the same no matter which method you choose (traditional vs outright purchase). It's logical to conclude that customers are being double charged for the pleasure. I suspect that we may see some changes to these plans in a year or so after the carriers realize that the target audience isn't fooled so easily.
With respect to your argument about apartments: I agree with you when you say that month-to-month lease is more expensive because the income isn't guaranteed. However, I think your reasoning is flawed. If I rent you an apartment, then by default, I cannot rent it to someone else. If I allow you to use my cell network, that does not preclude me from allowing someone else to use my network. I realize that my analogy breaks down somewhat when talking about the physical devices (whether cell phone or car) but it's much easier to have another phone or car delivered to the store/showroom than it is to add additional capacity to an apartment complex.
nah, t-mobile is the way to go, those guys have the best offers.
Rent-a-Center comes to the phone business. Pay waaaay too much for something just because you want it now. Slime buckets.
I have a Share Everything plan with Verizon, and I'm thinking about leaving them with this announcement, even though it doesn't affect me. I hate the idea of supporting a company that would do something this slimy.
I wish Apple would just sell a completely unlocked phone that worked on all of the major US carriers, so that people like me could just pick and choose which carrier they want, and make them stumble over themselves trying to offer the best deal.