Carrier Verizon: Cash or Subsidy for new iPhone 6 on Family Plan

[steveaus]

I've tried several online calculators, browsed through 12 pages of topics on this forum and read a half dozen reviews and it seems that many folks would have a similar question I can't find the answer to....


I want to swap (sell/trade) one 32GB iPhone 5s for a 64GB 6 and I want to add a new line with a new 64GB iPhone 6. I have an 8 GB / month plan currently.

I am happy to pay cash up front for the full retail value, buy a subsidized phone or the much maligned Edge - whichever makes more financial sense.

I'm happy with Verizon and expect to stay with them for two years or more. I expect to keep these phones for up to 2 years.

Currently I have three iPhone 5S phones that are 9 months old (15 months remaining on contract) - none available for a subsidized upgrade anytime soon.

 

[dcharleyultra]

So you want 4 lines in the end, or 3?

 

[steveaus]

4 lines.

 

[rui no onna]

More Everything 8GB 2-year
upfront: $300
line fee: $40 * 24 mos = $960
TOTAL: $1,260

More Everything 10GB Edge
8GB -> 10GB upgrade: $10 * 24 mos = $240
upfront: $0
line fee: $15 * 24 mos = $360
Edge: $37.50 * 20 mos = $750
TOTAL: $1,350

More Everything 10GB buy outright
8GB -> 10GB upgrade: $10 * 24 mos = $240
upfront: $750
line fee: $15 * 24 mos = $360
TOTAL: $1,350

Stick to your current plan and just sign a 2-year contract for the new line. When the 3 lines are all out of contract and if Verizon is still running the Edge/BYOD promo, that's when it makes sense to switch to the 10GB Plan + Edge/buy outright.

 

[Delmar]

Nice break down.

 

[steveaus]

Super helpful. My understanding is that tax and activation fees are the same regardless of how you buy so would push the price up the same across all options.

Given these numbers, I'm curious why it would make sense to buy outright or go with Edge when the three contracts are up. Buying outright costs another $90 more than with the contract subsidy (though perhaps for only $90 it's worth it to be able to end my Verizon relationship at anytime). Worse yet, with Edge I wouldn't own the devices so wouldn't recoup the resale value.

More Everything 8GB 2-year
upfront: $300
line fee: $40 * 24 mos = $960
TOTAL: $1,260

More Everything 10GB Edge
8GB -> 10GB upgrade: $10 * 24 mos = $240
upfront: $0
line fee: $15 * 24 mos = $360
Edge: $37.50 * 20 mos = $750
TOTAL: $1,350

More Everything 10GB buy outright
8GB -> 10GB upgrade: $10 * 24 mos = $240
upfront: $750
line fee: $15 * 24 mos = $360
TOTAL: $1,350

Stick to your current plan and just sign a 2-year contract for the new line. When the 3 lines are all out of contract and if Verizon is still running the Edge/BYOD promo, that's when it makes sense to switch to the 10GB Plan + Edge/buy outright.

 

[rui no onna]

Super helpful. My understanding is that tax and activation fees are the same regardless of how you buy so would push the price up the same across all options.

Given these numbers, I'm curious why it would make sense to buy outright or go with Edge when the three contracts are up. Buying outright costs another $90 more than with the contract subsidy (though perhaps for only $90 it's worth it to be able to end my Verizon relationship at anytime). Worse yet, with Edge I wouldn't own the devices so wouldn't recoup the resale value.

Actually, activation/upgrade fees only applies to 2-year contract. There's no upgrade fee for BYOD/Edge. There's currently a moratorium on internet taxation so with contract, you get taxed for the $40 line fee and on BYOD/Edge, you get taxed on the $15 line fee. Sales tax varies on location. Some states only charge sales tax on the upfront cost. In California, I get charged full sales tax on MSRP so sales tax is the same whether I go subsidized, Edge or buy outright.

The thing that makes Edge/BYOD slightly more expensive in the above scenario is the switch to 10GB. For Edge/BYOD to actually make sense, you need to get the $25 per line discount and that requires a minimum 10GB plan. With 3 lines out of contract, you get $75/mo discount (3 * $25) and the increase for the 10GB plan is still just $10/mo so you still come out ahead with Edge/BYOD even after factoring device costs. Also, on Edge, you own the device after 20 months and can do whatever you want with it. Edge is just a 0% financing offer. The trade-in part is entirely optional and it's only if you want to do an early upgrade. Even then, you have the option of selling the device yourself and just paying off the remaining balance.

As a comparison when your 3 lines are out of contract:

More Everything 8GB 2-year
upfront: $300 * 3 = $900
line fee: $40 * 3 * 24 mos = $2,880
TOTAL: $3,780

More Everything 10GB Edge
8GB -> 10GB upgrade: $10 * 24 mos = $240
upfront: $0
line fee: $15 * 3 * 24 mos = $1,080
Edge: $37.50 * 3 * 20 mos = $2,250
TOTAL: $3,570

More Everything 10GB buy outright
8GB -> 10GB upgrade: $10 * 24 mos = $240
upfront: $750 * 3 = $2,250
line fee: $15 * 24 mos = $1,080
TOTAL: $3,570

 

[steveaus]

So it seems that with the new line that I want to add, I should purchase via Edge? The others I can roll over into Edge when their contracts expire.

 

[dcharleyultra]

I think only unactivated phones can be added to Edge.