PSA for Verizon Users: Keep Your Subsidized Plans!

Discussion in 'iPhone' started by MICHAELSD, Sep 9, 2015.

  1. MICHAELSD, Sep 9, 2015
    Last edited: Sep 9, 2015

    MICHAELSD macrumors 68040

    MICHAELSD

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    #1
    Once a line is switched over to the new device purchase program, which requires users to pay the full price of the phone ($649-$949) over 24 months, it cannot be switched back to the subsidized plans.

    For the sake of disclosure, if a customer switches over to the new cellular plans Verizon has recently begun offering the prices are similar to as it currently is with subsidies. Except rather than saving on the phone, customers save on cellular (which makes the carriers appear cheaper). Personally as an annual upgrader I save a significant amount of money on the subsidized plans vs the cost of paying full price every year even on the discounted plans. The new plans are definitely not favorable for those who regularly upgrade.

    However, though this is speculation, I firmly believe once Verizon has switched over a substantial amount of customers to the new plans cellular costs will begin rising again. I am strongly opposed to the lack of subsidies for the reasoning I believe it will allow carriers the freedom to return to similar pre-discounted rates, but without the subsidized discounts -- especially as the purchase program will make it less apparent for the majority of customers that were unaware that carrier even subsidized their phone in the first place.

    Effectively, in my opinion the new plans are little more than a ruse for carriers to retract the $450 subsidy they had been offering and thereby collecting additional revenue when they inevitably update their plans again. When that happens, the grandfathered subsidy lines will become as desireable as unlimited data lines. Even if that were not to happen, by retaining the subsidized line the customer is not losing anything but if they switch to a device purchase plan then they forever lose the ability to purchase a subsidized phone -- I believe it's much smarter to wait to see how plans continue to evolve over the next few years as carriers attempt to rid themselves of subsidies.
     
  2. willmtaylor macrumors G3

    willmtaylor

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    #2
    1. As an "annual upgrader," shouldn't you be in the Edge program anyway?

    2. As an "annual upgrader," how are you saving money on subsidy plans? How are you getting out of your 2-year agreement? Wouldn't purchasing phones outright and then selling them 1 year later yield better results?

    3. Of course one cannot switch back to the subsidized plans; those plans are eliminated for new customers and only remain as a consolation/courtesy to current customers who are on them.
     
  3. MICHAELSD thread starter macrumors 68040

    MICHAELSD

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    #3
    1. The "Edge" program was an awful deal to begin with, but under the new "device purchase program" (Edge is no more) Verizon requires you to pay off an absurd 75% of the total cost of the device and trade it in to them. Thus, an early 6 Plus 64GB upgrader would have to pay ~ $613 and trade in to Verizon a device one could easily get at least $500 for. Huge profits here for Verizon.

    2. I have two lines for annual upgrades, which under current plans works out to about $200 less on the second phone than the new plans or paying full price would cost along with the fact I receive a subsidy.

    3. Customers should be weary of this, as it is very reminiscent of the unlimited data situation wherein Verizon offered superior promotions in order to transition customers over from unlimited plans.



     
  4. cardfan macrumors 65816

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    #4
    Buy an iphone by adding a line at subsidized price. Throw your old SIM into new phone that ideally should be off contract at 15 a month. Activate an ipad on the line you just added which reduces it from 40 a month to 10 a month.

    Rinse, repeat. Cancel ipad lines as they expire. Selling old iphone each year should pay for subsidized new one.
     
  5. MICHAELSD thread starter macrumors 68040

    MICHAELSD

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    #5
    This is similar to what I do, but do you know if Verizon still allows existing customers to create a new line with a subsidized phone?
     
  6. cardfan macrumors 65816

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    #6
    Yep. At least for now it still allows me an option to buy an iphone at sub by adding a line (through verizon's site).
     
  7. willmtaylor macrumors G3

    willmtaylor

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    #7
    ...so you guys pay for 2 lines 365 just to always upgrade to the newest device?
     
  8. MICHAELSD thread starter macrumors 68040

    MICHAELSD

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    #8
    Still cheaper than paying full price. :)
     
  9. willmtaylor macrumors G3

    willmtaylor

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    #9
    Each to his own.
     
  10. KUguardgrl13 macrumors 68020

    KUguardgrl13

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    #10
    You pay full price with the subsidies anyway if you don't break the contract. That's what most people do.

    Device payment plans are showing average customers that flagship smartphones are indeed $650 or so and not $200. ETFs ensure that the carriers get their money back for giving you a "discount". At least with the payment plans you know how much money is going to what parts of your bill. If Verizon didn't charge so much for the data buckets it wouldn't be so bad.
     
  11. jbeckwith17 macrumors newbie

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    #11
    I think the OP is correct about people who upgrade every. The comparison between the 2 plans is different when you upgrade every yr. In my case, the new plan ends up being $164 more over the course of a yr. Not to mention, I believe with the new plan you have to pay off the phone completely before you can upgrade. So if I sell the phone, that money is going towards paying the phone off as opposed to now when I sell the phone, that money pays for the 2 yr contract price of the next phone.
     
  12. willmtaylor macrumors G3

    willmtaylor

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    #12
    For me, that's not even the issue. It's the convoluted nature of line access costs.

    VZW advertises their new "Verizon Plan" as being without contract, and they advertise that the line access cost is $20. HOWEVER, line access cost actually depends:
    • Phones with a contract - $40/mo.
    • Phones without a contract - $20
    • Phones with a payment agreement - $20
     
  13. ultravisitor, Sep 10, 2015
    Last edited: Sep 10, 2015

    ultravisitor macrumors 6502

    ultravisitor

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    #13
    Oh really? If I'm still paying full price with subsidies, then the actual cost of my Verizon service must be SUPER cheap.

    Here's the math:

    contract pricing keeping the same plan I have now
    cost up front for the phone (6s Plus): $499.99
    $60 loyalty plan (2GB data, unlimited talk and text) X 24 = $1440
    two year cost = $1939.99

    keeping the same plan but having to pay full retail for the phone
    phone: $39.58 X 24 = $949.92
    loyalty plan: $60 X 24 = $1440
    two year cost = $2389.92

    if I were to switch to the medium size data bucket, which is what I would need, and pay full retail for the phone
    phone: $39.58 X 24 = $949.92
    medium data bucket plan ($45) + access fee ($20): $65 X 24 = $1560
    two year cost = $2509.92

    My two-year cost will go up a minimum of $449.93 if I choose to forego a contract.

    I can even exceed my data allowance by one GB each month and my two-year cost is still cheaper because my overage fee is only $10/GB.

    Again, if I'm paying full price for my phone, then my service is dirt cheap.
     
  14. willmtaylor, Sep 10, 2015
    Last edited: Sep 10, 2015

    willmtaylor macrumors G3

    willmtaylor

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    #14
    Loyalty Plans are promotional 1-year contracts that don't affect one's upgrade status and aren't advertised, so I don't think that's exactly an apples-to-apples comparison (no pun intended).

    A (now extinct for new customers) Share Everything plan would be a more appropriate example:
    Cost up front for phone - $499
    2GB of data & unlimited talk/text - $40 x 24 = $960
    Line access charge - $40 x 24 = $960
    two year cost = $2,420

    P.S. I thought that data overages for Loyalty Plans were $15/GB, not $10.
     
  15. ultravisitor macrumors 6502

    ultravisitor

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    #15
    Nope. It's $10. I just paid it last month for the 24th month of my contract. It's the regular single-line plans that had $15/GB overage fees.

    The loyalty plan can be used as a one-year changes/extensions, but in my case they treat it as a two-year contract.
     
  16. einmusiker macrumors 68030

    einmusiker

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    #16
    Verizon will have to pry my $80 unlimited data 450 minute plan from my cold dead hands lol.
     
  17. flur macrumors 68000

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    #17
    Something is wrong with your math.
     
  18. MICHAELSD thread starter macrumors 68040

    MICHAELSD

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    #18
    Switching a plan over to a tablet line makes it only $10/month, which others in this thread do.
     
  19. KUguardgrl13 macrumors 68020

    KUguardgrl13

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    #19
    I'm not talking about whatever complicated system you have got upgrading every year. Those of us who have two year contracts and don't pay an ETF still pay full price for our phones give or take a few dollars. If you break contract, you still have to pay the ETF which pays off the contract (ie the phone).

    The removal of contracts and replacing them with device payment plans simplify things for the average customer. If it makes it more complicated for you, that's your issue. You choose to work outside the current system.
     
  20. jldesutter83 macrumors regular

    jldesutter83

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    #20
    So I'm gathering from this post, if all my lines are on contracts and one line is up for upgrade on 10-7-15, I can still trade in my 64gb iPhone 6 and get a 64 gb iPhone 6s at subsidy pricing and sign a new contract for said line?
     
  21. willmtaylor macrumors G3

    willmtaylor

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    #21
    I was told something different, so that's good to know. I appreciate the info.
     
  22. MICHAELSD thread starter macrumors 68040

    MICHAELSD

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    #22
    On Verizon, that's correct. Just stay on the old cellular plans and you'll pay the same or less than what Verizon is charging now.

    Although I will give Apple credit since their upgrade program makes the switch off of contracts much more appealing.
     
  23. ultravisitor macrumors 6502

    ultravisitor

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    #23
    It's like you didn't even read my post. All I did was break down the numbers for my TWO-YEAR CONTRACT.

    There was no "complicated system". All I do is renew every two years, JUST LIKE YOU.
     
  24. marc55 macrumors 6502a

    marc55

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    #24
    I'm not sure how you guys think there is still subsidized pricing on Verizon 2 year contracts, or how the 2 year contract is less costly than the new plan?

    For me, it will be less buying the phone under the monthly payment plan; here's the numbers:

    Current 2 year contract cost for new 6S, 64GB:
    $299 up front
    Monthly Access= $40
    3GB Data= $42.50 (I get 15% discount)
    Total cost over 2 years= $2279 ($1980+ $299)

    New Plan:
    Phone payment= $31.24
    Monthly Access= $20
    3GB Data= $38.25 (15% discount)
    Tota Cost over 2 years= $2147.76

    No matter what, you are going to pay for the phone.

    If you stay with the 2 year contract, I wouldn't count on future loyalty incentives under the 2 year contracts, as they want them to go away.

    As far as the new plan prices going up, sure they will, but you can bet costs under the 2 year contracts will go up also.
     
  25. ultravisitor macrumors 6502

    ultravisitor

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    #25
    I showed people exactly how a two-year contract can be less than the new plans by breaking down the math in a previous post.
     

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