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Carrier Why AT&T Next is not a scam. New phone for $124 per year.

I

iphone5att64

macrumors 6502
Original poster
Sep 19, 2012
405
37
Is AT&T Next still considered a scam? I went to an AT&T store to buy a 5s on a 2 year contract, but decided to try Next. I've read why Next is a scam articles from July and was reading them in the store, but still did not fully understand it. I have 14 days to cancel to do the math. Here is what I found.

The fine print on http://m.att.com/shopmobile/wireless/next.html.
*Requires 20-month 0% APR installment agreement & qualifying credit. Wireless service req. (voice & data for smartphones/data for tablets). If you cancel wireless service, remaining balance on device becomes due. Sales tax due at sale. Qualifying devices only. Upgrade after 1 yr.: Req. min. 12 installment payments, acct. in good standing, plus trade-in of current device in good & functional condition & purchase of new device/wireless agreement & service plan. After upgrade remaining unbilled installment payments are waived. AT&T Next available only at AT&T owned retail stores & att.com. If device is returned, restocking fee up to $35 for smartphones or 10% of tablet sales price may apply. Terms subject to change.


The important part is "After upgrade remaining unbilled installment payments are waived."

iPhone 5s 64GB is $850 unlocked.

Under Next, it is $37 monthly. That is $444 in 12 months and $740 in 20 months or $296 after the 12th month.

However, after 12 months, when you upgrade to the next iPhone, you sell the previous one back for $320 and the $296 is waived, so that is $444 minus $320.

That is $124 to use the latest iPhone for a year and $248 to use the latest for two years.

Compare that to buying an iPhone for $436 and then selling what was an $850 phone two years later for $190. You paid $246 to use the iPhone for two years.

Sell for $200, then $236.
Sell for $300, then $136.

$190 was offered for a good condition iPhone 4S 64GB AT&T at the time of this post.
 
Next was more expensive when it came out
It makes some sense if you upgrade every 12 not every 24 months
The credit when turning in the phone might change based on how good you treated your phone.
 
I may be misunderstanding your post or Next, but I'm pretty sure they don't "pay" you anything for your old phone. When you want a new phone, you MUST trade in your current phone - but they give you nothing for it in regard to cash.

It's only if you have a phone no longer locked into a contract that you can trade in your phone at an AT&T store/elsewhere.

EDIT: Nevermind, I see what you mean.
 
JBaker122586 said:
^Just checked eBay. 64GB iPhone 4S are going for around $400 or more.
Click to expand...

$190 was offered for just the phone. $400 on eBay would get you chargers, cases, and AppleCare.

----------
mattcube64 said:
I may be misunderstanding your post or Next, but I'm pretty sure they don't "pay" you anything for your old phone. When you want a new phone, you MUST trade in your current phone - but they give you nothing for it in regard to cash.

It's only if you have a phone no longer locked into a contract that you can trade in your phone at an AT&T store/elsewhere.

EDIT: Nevermind, I see what you mean.
Click to expand...

I was told they would buy it back. Now, I'm not sure if they meant buying it back would waive the rest of the payments or if they buy it back and also waive the payments. It's something to ask next time anyone goes in.
 
iphone5att64 said:
$190 was offered for just the phone. $400 on eBay would get you chargers, cases, and AppleCare.

----------



I was told they would buy it back. Now, I'm not sure if they meant buying it back would waive the rest of the payments or if they buy it back and also waive the payments. It's something to ask next time anyone goes in.
Click to expand...

They don't buy it back if you haven't finished paying for it.
So basically you'd get 12 months of use out of a 64GB iPhone for $444. More than if you just bought it with a 2 year contract.
There's a reason AT&T is pushing it so hard. And that reason is not, "because it works out to be a great deal for the customer."
 
Let's look at it this way:

Right now, you get a new two-year contract, and get an iPhone 5s 16 GB for $200.

Next year, you sell it for $350 (about what iPhone 5 are going for on eBay right now).
Since you don't have an upgrade, you buy a new iPhone 6 16Gb for $650.

After a year, you sell that for $350.

So you've spent $850, and recouped $700 in those two years. You've had the newest model iPhone for 2 years for just $150.

With AT&T Next, having the newest model iPhone for 2 years would cost you $27 a month, or about $650.
 
JBaker122586 said:
They don't buy it back if you haven't finished paying for it.
So basically you'd get 12 months of use out of a 64GB iPhone for $444. More than if you just bought it with a 2 year contract.
There's a reason AT&T is pushing it so hard. And that reason is not, "because it works out to be a great deal for the customer."
Click to expand...

$444 is cheaper than a yearly new $399 phone with an $250 early upgrade fee and $36 activation. The problem is you commit to 20 payments so if you *don't* get a new phone next year you pay $740. You are paying a non-subsidized price for the equipment and also paying the same monthly fee for service for when you have a subsidized phone.

With all that said, like everything else in the world it is designed to quickly and efficiently separate us from our money.

user-name-here said:
You do not sell AT&T anything. You simply give them the phone for free and get your new phone to continue making NEXT payments on.
Click to expand...

That's my understanding. It stops your current payments and begins another 20 payments. And the phone has to working and be in good cosmetic condition.
 
JBaker122586 said:
There's a reason AT&T is pushing it so hard. And that reason is not, "because it works out to be a great deal for the customer."
Click to expand...

Exactly! Why would AT&T or Verizon offer a new plan that netted them less profits than existing plans? They do hire the best actuaries. Even if you play the game perfectly, the casino always wins in the long run.

Your iPhone holds it's value very well. Sell it yourself.
 
Yup, between 12 and 20 months you can turn the phone in to get a new one. But if you complete 20 months the phone is yours to keep and you can get a new one.

It's not as horrible as people are making it out to be. It's still a better deal to just throw down $200-400 on a two year contract, but if you want the option to upgrade in twelve months it's the price you pay.

You really are just buying the phone on a payment plan. You can pay the phone off sooner if you want and then get a new phone. So if you wanted to pay it all off in six months you could.

The part that messes with people is the idea that your monthly fee already pays for part of your phone as is. But you can't think of it like that. Because if you complete a two year contract and continue with the same phone, your bill stays the same. Also true if you buy a phone outright. It's not like you'll get a price break on your bill either way.it sucks but that's the way it is.
 
iphone5att64 said:
I liked your previous post better.
Click to expand...

;)

Just wanted to check my sources and be 100% sure (instead of 99% like I was) of what I was telling you.

I can guarantee they will not buy your phone back from you. You pay whatever amount to them per month to "rent" the phone. Then when you want to break the "lease" you simple give them back the phone for free and the rest of the payments on the contract are waived. There is no selling them back anything.
 
iphone5att64 said:
iPhone 5s 64GB is $850 unlocked.

Under Next, it is $37 monthly. That is $444 in 12 months and $740 in 20 months or $296 after the 12th month.

However, after 12 months, when you upgrade to the next iPhone, you sell the previous one back for $320 and the $296 is waived, so that is $444 minus $320.
Click to expand...


Nope, you've got it totally wrong.
They're not buying anything back.
The first phone isn't paid for until after the 20th month.
Out of the goodness of their hearts they will let you turn in the first phone after 12 months (which you've already paid $444 for) and they will waive the remaining $296.
Then they will let you pay full price again for a new phone and again, split that cost into 20 payments.
And then the cycle repeats.
Meanwhile you're still paying the same rate plan as everyone else. The rate plan which is priced to subsidize the discounted cost of the phone in the first place.
Only you're not getting a discount -- you're paying full price.
Oh and did they forget to mention that if they don't like the condition of the first phone after 12 months they can refuse to accept it?

Scam, Scam, Scam!
 
That's right, they won't buy it back. Upgrade every year, and it costs $444/yr for the latest phone (64GB pricing). Or $399 to buy with a 2-year agreement, so you may be thinking it's only $45 more. However, with the $399 phone, you can resell for $350 on eBay, making your upgrade (albeit every 2 years) only $49.

$49 every 2 years vs $444 every 1 year. I'll take the 2 years.
 
They don't buy your old phone back. They take it back and don't give you anything. They just waive the rest of the payments, and then let you have a new device for 20 payment installments. (Note that with this program, the longer you wait to trade in your phone after 12 months, the more money AT&T makes off you.)

Let's look at two scenarios of staying with AT&T with two years, having the latest iPhone, and then leaving AT&T after the 2 years is up.

AT&T Next said:
iPhone 5S 16gb - $649 retail
-$32.45 monthly payments x 20
-After 12 months you would have paid $389.40 and you owe $259.60

iPhone 6 - $649 retail (presumed)
-They take your iPhone 5S
-They waive the rest of the $259.60 you owe on the 5S
-You continue paying $32.45 per month
-You leave AT&T after 12 months

So at 24 months
-You've paid $389.40 to use the iPhone 5S for 12 months
-You've paid another $389.40 over 12 months for the iPhone 6
-You still owe $259.60 on the iPhone 6
-You've spent a total of $1038.40 over 2 years for the devices
Click to expand...

Normal contract pricing said:
iPhone 5S - $199 on contract
-Use for 12 months

iPhone 6 - $649 retail (presumed)
-Buy off contract at retail price
-You leave AT&T after 12 months

So at 24 months
-You've paid $199 on contract for the iPhone 5S
-You've paid $649 off contract for the iPhone 6
-You've spent a total of $848 over 2 years for the devices
Click to expand...

Note that not only have you spent LESS money at the end of the two years with traditional contract pricing, but you still own the iPhone 5S. If you sell the iPhone 5S, your net cost would be even less.

Let's say you want to stay with AT&T after 2 years. In this case, net cost at 24 months with AT&T Next would be $778.80, and still $848 with 2 year contract. So all you have to do is make more than $70 profit selling your iPhone 5S to come out ahead. This is not a difficult proposition at all since 1 year old iPhones typically sell for $300-$350 net.

So....TLDR, AT&T Next is definitely a scam, and so are all the other early upgrade programs.
 
My 2yr plan has been buy subsidized iPhone yr1 and full price yr2...following year I'm subsidized eligible again. The plan does go awry when Apple goes off schedule.

Year1 for 32GB is $299...year2 is $749...total $1050 (round with me).

I've been able to sell my 32GB iPhones, in near perfect shape, on eBay for $400 to $450, two months after new release flood dies down. I always sell with original packaging and cables and chargers. Take the lower and that's total $800 over 2 years.

So, $1050 - 800 = $250 over 2 years. For $125 per year, I'm in a new iPhone...and I'm ok with that.

Granted, there's taxes and cases and 30-pin to lightning adapters and other yada cost of owning. That'll always be true. BTW, don't include the $36 upgrade fee...I've always gotten that BS waived.

Bottom line, sell your very valuable iPhone yourself. Don't give it away to AT&T or Verizon.
 
Just the fact that AT&T charges the same amount for a plan whether you bring your own device or not, is proof enough for me. It's a scam operation. Just like Verizon or any other carrier that does the same. They are all out to screw the customer.
 
The plan fails for the simple fact you have to "sell" the phone back to AT&T after 12 months if you want a new upgrade. Not a good deal but to each their own.
 
iphone5att64 said:
Is AT&T Next still considered a scam?
iPhone 5s 64GB is $850 unlocked.

Under Next, it is $37 monthly. That is $444 in 12 months and $740 in 20 months or $296 after the 12th month.

However, after 12 months, when you upgrade to the next iPhone, you sell the previous one back for $320 and the $296 is waived, so that is $444 minus $320.

That is $124 to use the latest iPhone for a year and $248 to use the latest for two years.
Click to expand...


Is is a scam? No. It's essentially a lease. You get what you are paying for: convenience of not having to bother selling your phone and a new phone every year. Is is a good value? No. Here's why:

You cite the cost of an unlocked phone but you are not getting an unlocked phone; you are getting a locked phone at near unsubsidized hardware pricing and no break on talk or data pricing.

If you buy a traditional subsidized iPhone, after two years you actually end up with extra money after selling your old phone (unlocking it first) and buying the new one.

The question then becomes does one really get any benefit upgrading every year for the premium paid? Obviously it's a personal decision, but technically, phones year over year whether they are iPhones, Androids, or Windows are only incremental modifications. It really takes two model years for any phone to be noticeably different from previous ones.
 
I think most of you are making comments and have not done this. I purchased my 32gig 5S yesterday and have my contract to read what I have just done. I thought this was a scam too but it is simply a way to purchase the phone with out being on a contract. The 5S I purchased was 0 down, 0 finance charge and total payments of $640.00 or $32.00/month for 20 months. I can pay off the $640 at any time and the phone is mine to keep. I will most likely pay it off next month when I get my bonus from work. So for $640.00 I have a new 5s that is contract free and can have unlocked at that time. If you do not pay the contract off soon and keep paying $32.00 then you will pay more in the long run.
 
dbalone said:
I can pay off the $640 at any time and the phone is mine to keep. I will most likely pay it off next month when I get my bonus from work.
Click to expand...

Do you know if you are eligible for a subsidized phone again after paying the balance off?

dbalone said:
If you do not pay the contract off soon and keep paying $32.00 then you will pay more in the long run.
Click to expand...
I don't see how this is the case, unless you are planning on getting a new phone instead of making payments. You are still paying the total cost of the phone, and they aren't adding any interest or anything. Or are you saying it would have just been better to pay the $200 I'm month one for the subsidized price, rather than paying for 20 months?
I think next would be a better deal if you weren't already required to be upgrade eligible to use it.
 
I did not do the next plan i just have 2 extra lines with no phones on them which means i have 2 lines that come up for upgrade every year. works for me cheaper then next and i still get to sell my old phones
 
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