Help me understand ETF and 2-year contracts

[dulcimer47]

If I understand correctly, if you get an iPhone and sign up for a 2-year contract with AT&T, you can break the contract after 1 year and pay the ETF ($325-$120=$205). Could you then get a new iPhone with a new 2-year contract and still get the subsided price?

In other words, you pay $200 up-front, pay $205 in ETF a year later, you've essentially paid $405 and after 1 year have an unlocked iPhone that, if you had bought it unlocked a year earlier would have cost $650. Am I missing something?

Is there any downside (other than paying the ETF) in doing this? It seems as though people who want a the latest hardware every year would benefit from the above, rather than buying an unlocked iPhone for $650...

If I am incorrect about any of the above, please educate me.

Would there be other negative consequences from doing this?

 

[user-name-here]

Would there be other negative consequences from doing this?

Do you really think that the scammers that do this loophole wont ruin it for everyone? All it will do is cause ATT to raise the ETF's even another $40 or so to prevent such scams, hurting all the regular customers in the process.

Think about how your actions affect others before doing something selfish that you know isn't how things are supposed to work.

 

[emoore]

Not totally sure but I think you can't use the same carrier for 60 or 90 days after you pay the ETF. so you'd have to switch carriers to sign a new 2 year contract.

 

[dulcimer47]

Do you really think that the scammers that do this loophole wont ruin it for everyone? All it will do is cause ATT to raise the ETF's even another $40 or so to prevent such scams, hurting all the regular customers in the process.

Think about how your actions affect others before doing something selfish that you know isn't how things are supposed to work.

Wow. Never realized that following AT&T's rules and regulations to the letter constituted being a "scammer" or "selfish".

Does anyone else have any thoughts? I am interested in understanding the process.

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Not totally sure but I think you can't use the same carrier for 60 or 90 days after you pay the ETF. so you'd have to switch carriers to sign a new 2 year contract.

Thank you, that is helpful (and constructive).

 

[vistadude]

Instead of breaking the contract, you could early upgrade for about $400.

 

[dulcimer47]

Instead of breaking the contract, you could early upgrade for about $400.

Is that the "AT&T Next" program?

 

[vistadude]

No, it was always there. It's called early upgrade and you usually do it through the web. But now that I think about it, the "Next" program is probably cheaper, I think it would be $199 plus 12x$10, so about $330 to upgrade each year.

Edit: I thought it's $10/month, but now I see it's way more than that. You're better off early upgrading and selling the older phone.

Is that the "AT&T Next" program?

 

[Mlrollin91]

Instead of breaking the contract, you could early upgrade for about $400.

Early upgrade is $250 on top of the full subsidized price. So, $450, $550, and $650.

OP: No, early upgrade has nothing to do with Next. In order to participate in Next you must already be fully eligible for a full subsidized upgrade.

 

[user-name-here]

Never realized that following AT&T's rules and regulations to the letter constituted being a "scammer" or "selfish"

Those rules and regulations being followed are made with the idea that the customer acts in good faith. Continually breaking your contract and signing right back up will only cause the carriers to crack down on this scam which will hurt everyone else in the process through raised prices.

It's like how Apple recently raised the price of Applecare replacements from $49 to $79 because so many scammers would intentionally break their device to abuse the rules and get a new one.

 

[dulcimer47]

Early upgrade is $250 on top of the full subsidized price. So, $450, $550, and $650.

OP: No, early upgrade has nothing to do with Next. In order to participate in Next you must already be fully eligible for a full subsidized upgrade.

I was first thinking about this after noticing on AT&T's site that they offer 1-year contracts on some phones, but of course, not on the iPhone.

So, you get a 2-year contract, pay $200 up-front, then if in a year's time, you want to upgrade again, you ask for "early upgrade", pay $250 to be able to get another phone for $200 up-front? Do you keep the first phone in this scenario, could you resell it for example, to defray some of those costs?

What I'm trying to determine, as you probably can tell, is if there is any way to get the latest hardware yearly without paying the full unsubsidized price. The 1-year contract seemed like a good option, but as I said, it isn't available on the iPhone. This "early upgrade" option might work, and the cost is about the same as the 1-year contract...

The HTC One costs $450 from AT&T with a 1-year contract.

iPhone with a 2-year contract is $200, add $250 for "early upgrade", that's the same $450. Basically, you would pay $450 ($200 up-front, $250 when you want to upgrade early?) for a 2-year contract wherein you can upgrade "early" (1 year in). Is that correct?

 

[Mlrollin91]

I was first thinking about this after noticing on AT&T's site that they offer 1-year contracts on some phones, but of course, not on the iPhone.

So, you get a 2-year contract, pay $200 up-front, then if in a year's time, you want to upgrade again, you ask for "early upgrade", pay $250 to be able to get another phone for $200 up-front? Do you keep the first phone in this scenario, could you resell it for example, to defray some of those costs?

What I'm trying to determine, as you probably can tell, is if there is any way to get the latest hardware yearly without paying the full unsubsidized price. The 1-year contract seemed like a good option, but as I said, it isn't available on the iPhone. This "early upgrade" option might work, and the cost is about the same as the 1-year contract...

The HTC One costs $450 from AT&T with a 1-year contract.

iPhone with a 2-year contract is $200, add $250 for "early upgrade", that's the same $450. Basically, you would pay $450 ($200 up-front, $250 when you want to upgrade early?) for a 2-year contract wherein you can upgrade "early" (1 year in). Is that correct?

For example: If you purchased the iPhone 5 for $200, you can then purchase the iPhone 5S for $450. Yes, you are able to keep the iPhone 5 and resell it because by paying the additional $250, you are fulfilling your previous contract and beginning a new one with the early upgrade. The early upgrade fee is kind of an ETF, except, you keep your plan and your phone number and get the new device.

If you sign up for AT&T Next (but you must be eligible for a full upgrade) You can upgrade yearly. You pay $0 down, but depending on the phone you will pay between $20-$30 a month additional to your service. Then at the end of the 12 months, you give them that phone back and do it all over again with a new phone. Thats the most convenient way to do it, but will probably be more costly.

Your best bet is to buy the phone for $200, upgrade for $450, sell the previous one for $200-300 and then you will only be out $150-200 each year, which is the cost of buying it subsidized yearly. (This is my plan anyway).

 

[dulcimer47]

For example: If you purchased the iPhone 5 for $200, you can then purchase the iPhone 5S for $450. Yes, you are able to keep the iPhone 5 and resell it because by paying the additional $250, you are fulfilling your previous contract and beginning a new one with the early upgrade. The early upgrade fee is kind of an ETF, except, you keep your plan and your phone number and get the new device.

If you sign up for AT&T Next (but you must be eligible for a full upgrade) You can upgrade yearly. You pay $0 down, but depending on the phone you will pay between $20-$30 a month additional to your service. Then at the end of the 12 months, you give them that phone back and do it all over again with a new phone. Thats the most convenient way to do it, but will probably be more costly.

Your best bet is to buy the phone for $200, upgrade for $450, sell the previous one for $200-300 and then you will only be out $150-200 each year, which is the cost of buying it subsidized yearly. (This is my plan anyway).

Thank you. This does seem to make the most sense if you want the new hardware each year. I was unaware of the "early upgrade" option.