ETF for AT&T With 5S cheaper than buying unlocked?

Discussion in 'iPhone' started by yanathin, Sep 16, 2013.

  1. yanathin macrumors member

    Joined:
    Jan 11, 2006
    #1
    Had a quick theory, and I wanted to see if anybody has tried this before. I have an iPhone 5, and I want a 5S. My contract has another year on it. I'm on a family plan with my wife, under my name / social security number. Rather than buying an unlocked phone for $649, I had another idea.

    What if... my wife purchased the phone and a new 2 year AT&T contract for $199 + ~$15 tax. She got the cheapest plan available, which is $59/month, which I imagine she'll have to pay for the first month. Activation fee is $36. Early Termination Fee is $325. That adds up to a grand total of $634 after tax. If I were to buy a phone unlocked, it would cost me $700 after tax (since the tax rate would be on the $649 instead of the $199). That's a savings of $66. It may not be THAT much in the grand scheme of things, but it's definitely something!

    Has anybody tried this before? Does anybody see anything that might cause us problems? Does AT&T make you wait a certain amount of time before you can cancel your contract and pay the ETF fee? Also, if we were to cancel literally the day after we signed the contract, would we have to pay the $59 for the entire first month, or would it be pro-rated for just that one day?
     
  2. maflynn Moderator

    maflynn

    Staff Member

    Joined:
    May 3, 2009
    Location:
    Boston
    #2
    You pay sales tax not on the subsidized price but the full price, so that may reduce the potential savings.
     
  3. yanathin thread starter macrumors member

    Joined:
    Jan 11, 2006
    #3
    Shoot. Good to know! Well, that would bring my price to about $670, which only makes it around 30 bucks cheaper. But that's if I have to pay that entire first month of $59. So I guess that's my main question now, if I'd have to pay that entire first month or if it would be pro-rated.
     
  4. maflynn Moderator

    maflynn

    Staff Member

    Joined:
    May 3, 2009
    Location:
    Boston
    #4
    Generally speaking, you either have to pay the first month or when cancel your contract return the phone as well.
     
  5. deeddawg macrumors 604

    Joined:
    Jun 14, 2010
    Location:
    US
    #5
    That depends on the state, in some states you pay sales tax just on the subsidized price.

    However, in some states you may pay sales tax on the ETF.

    Also, as noted, with AT&T if you cancel during the 14 day return period you have to turn in the device (and don't pay ETF). You'd need to pay at least two weeks of phone plan plus data plan and quite likely the full month (should be able to search to validate people's experiences).
     

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