Buying a New Smartphone Without Extending Your Contract

By Carlos Portocarrero on 5 January 2011 (Updated 2 January 2012) 7 comments
Photo: pittaya

Buying a new phone is great, especially since most carriers will give you a hefty discount ($199 vs. $529 for retail) in exchange for extending your contract for two years.

Why would anyone hesitate to trade two years for a $329 discount? There are lots of reasons:

  • They hate their service but love their phone (iPhone anyone?)
     
  • They're waiting for the phone they want to become available on a "better" carrier (Verizon-cough-cough)
     
  • They don't like being tied down

I was recently forced to go this route because I am on a sweet plan that is so heavily discounted, I had to pay retail.

I upgraded to a newer, better, faster phone without extending my contract and only paid $215. If you include the taxes and activation fees that come with extending your contract for two years, I actually paid less than most people would!

Here are four tips I followed to buy a new phone without giving those evil carriers what they want:

Research

It all starts with research. The carriers will tout the newest phones with the latest features, but they aren't necessarily that much better. When a carrier says stuff like "this phone will keep you connected to your friends via Facebook," you know they're talking crap. Most smartphones can do most tasks, so don't fall for carriers' marketing spin.

You have to rely on yourself to know the facts. Read reviews on sites like Engadget and Gizmodo. See what Consumer Reports has to say. Ask your friends what features they use and like. Ask the people who follow you on Twitter.

Just don't walk into a carrier's store and ask the person behind the counter what the best phone is...it isn't in your best interest.

Hold the Phone

After you've done your research and narrowed it down to two or three phones, it's essential that you actually hold them in your hand and test them out.

You're trying to answer crucial questions like:

  • How does it feel in your hand?
  • Do you need a keyboard?
  • How is the screen's responsiveness?
  • How does the interface work for you?
  • Will other people think you're cool if you have this phone?

I went into two different T-Mobile stores a couple of times to play with two different phones: the Samsung Vibrant and the HTC G2. The screen on the Vibrant was amazing, but the G2 had a keyboard. They were two totally different phones with their own pluses and minuses.

Reviews help, but the best way to know if a phone works for you is by holding it and testing it.

Buying It: Use Craigslist and eBay

Craigslist and eBay are a great way to find phones that are in great condition at heavy discounts.

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Ideally you'll find a phone that has been well taken care of. That means you may have to buy a phone that has been out there for a few months already. Nobody said this was going to be a free ride.

Also, make sure to ask your local carrier's store if they have any refurbished or returned phones. These are practically new but have to be sold for less because they've been opened and used.

I was lucky enough to find a guy online selling a Nexus One for $365 that looked brand new. He had put a screen protector and body glove on it from day one so it was almost like I was buying a new phone at a used price.

Sell Your Old Phone

Selling your old phone will help you offset the price of the phone you just bought. Lots of people sell their old phones on eBay and Craigslist, so making yours stand out is important if you want to get top dollar. Some things you can do to make your listing stand out:

  • Include any extra chargers, car chargers, docks, or batteries you have
  • Include the original box and manual if you have them
  • Lots of close-up, quality pictures
  • Upgrade the software on your own
  • Use spell-check so you don't come off like a psycho

See what other people are selling the phone for, and if you can make your listing stand out, you might get top dollar to offset the purchase of your new phone.

I sold my two-and-a-half-year-old G1 for $150 because I included every accessory I had, took time to craft a good listing, and upgraded it to the latest Android version. That made my phone stand out, and I listed it for a relatively high price.

Enjoy Your New Phone!

Now you have a new(ish) phone and you don't have to commit to another two years with your carrier. So when Verizon finally comes out with the iPhone, you'll be ready to jump ship and enjoy the latest iPhone without being on the worst network, according to Consumer Reports.

Disclosure: This post contains affiliate links, and I will earn a commission for any purchase made through these links.

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kyle5434

Unfortunately, none of the existing iPhones released to date will work on Verizon's network, since AT&T uses GSM and Verizon uses CDMA technology. So people wanting an iPhone on Verizon's network will have to wait a while before any used Verizon iPhones start showing up.

Guest's picture
Darci

Great post! I, too, am waiting for Verizon, but my existing phone might DIE before that happens. I'll be watching CES verrrrry closely.

Carlos Portocarrero's picture

CES is very exciting! We'll see what Verizon's CEO has to say today. It'll also be exciting to see what dual-core phones can do.

Guest's picture
Guest

This is all well and good advice. I'm a huge believer in buying unlocked phones. Having a contract makes you feel like a prisoner when you're talking to tech support. But there are some HUGE caveats:

You cannot just buy any phone and expect it to work on every carrier. Branded PAYG phones do not work on other carriers without the carrier's unlock code. CDMA phones (Verizon, Sprint, many regional carriers) will not work on GSM (ATT, TMobile). And finally most GSM phones will only work on one carrier's 3G band (i.e. my unlocked Nexus S only does Tmobile 3G). If you want to be taken for all your money, but know that your phone will work, then yes buying a contract phone may be the way to go. But if you're the captain of your own ship and are willing to do the research unlocked is the way to be.

Carlos Portocarrero's picture

Good point...I totally assumed people were doing their homework when it comes to this. Don't buy a phone that doesn't work on your network! Especially if you want 3G/4G speeds, as some phones will "work" but not some of the advanced features.

Guest's picture
GreenGiant

Well, the iphone is finally on verizon but I can't really say more than that since I don't know much about it besides seeing the commercials. The way I got my phone was through Straight Talk. There are a few smart phone-like options and I got the LG 900G which is pretty new I think. Straight Talk uses the verizon network though I think and the service is really good. So the LG900G was 69.99 and I pay $50 a month for unlimited service. There were other inexpensive options for phones and for plans and you can mix and match what you like. I thought it was a great alternative to what I was paying before my contract ran out. Ouch. So I would definitely recommend Straight Talk for a smart phone. I hear they are coming out with some more new ones too but I like my LG it does everything I need. Quite less complicated than the process you are proposing but to each his own right? Thought I would share my two cents.

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gail w

I actually saw some smartphones on the StraightTalk website as well. I've been doing some looking around because I need to get out of this vicious cycle of 2 year contracts. Definitely interested in going prepaid and the fact that I can get a smartphone now is making it even more attractive. I was surprised at what I discovered when I actually looked at my cell phone bills...