So, you’ve decided to get a new phone. You’ve rolled up your sleeves and are ready to dive into the sea of “best deals.” But the more you look, the more confusing and overwhelming it gets. Everywhere you look, there’s a new deal. Some from your current carrier, some from carriers asking you to switch. Couple that with the trade-in value and eligibility rules, and finding that new phone is quickly turning into a guessing game.
With wireless expenses ranking as some of the top expenses for American households, shaving a few bucks off your bill is great. But did you know you can save an average of $500 a year with some phone deal know-how?
That’s where we come in! In this article, we’re breaking down the ins and outs of finding a great deal on the phone you want—whether you’re trying to save money with your current carrier, are thinking about switching, or want to save on your next device.
What Goes into a Phone Deal?
When it comes to phone deals, many times, there are significant “behind the scenes” factors that influence just how much you’ll pay. For example, when you consider switching carriers alongside getting a new phone, you can usually save the most money. This is because carriers will often offer you the best incentives to get your business.
On top of this, things like data usage, lines-per-plan, the trade-in value of your current phone, and what kind of phone plan you’re currently on all influence the amount of money you can shave off when buying a new phone.
We know it sounds like a lot, but we’ll simplify what you need to know in each section below!
Things to Keep In Mind
When you’re looking for a deal on a specific phone, you essentially have two paths you can go down. One, you stay with your existing carrier, and two, you switch carriers. We’ll dive into the pros, cons, and tips on those later. But whether you’re happy with your existing carrier or willing to switch, there are a few universal things to keep in mind:
Buying Your Phone at the Right Place
Most people still buy phones from their carriers, but that might be the most expensive place to buy, especially if you go to a store. It’s cheaper to buy online because you’ll pay lower activation fees and perhaps snag an extra promotion.
Consider What’s Essential to Have
When purchasing a new phone, it always makes sense to evaluate whether the latest model is essential for you, as you will save significant money if you get last year's model or take a step or two down a tier.
The iPhone 12 will cost you a few hundred dollars more for a relatively tiny improvement (5G isn’t widespread yet) over the iPhone 11. The Galaxy S20 5G is the fancier tier above the A71 5G retailing for $400 more, but they’re both awesome phones for most people.
Upgrade and Switching Promotions
As we mentioned earlier, the most aggressive new phone promotions target switchers at the Big Three, so a surefire way to save on a new phone is to switch carriers. That takes more effort than a simple upgrade, so if you want to stay at your current carrier, you can still take advantage of some promotions.
Most will require a trade-in and post-paid plan. If you’re on a prepaid plan or have a super old phone model, you’re usually out of luck and won’t qualify for new phone promotions. If you have a phone model less than three years old, find out if your phone is eligible for trade-in, and you are on a Big Three carrier, you might be in luck. Here’s a breakdown:
T-Mobile: If you’re already a customer and on any unlimited postpaid plan, you qualify for new phone promotions. As is the norm across carriers, you’ll get a bigger discount if you’re a new T-Mobile customer or if you add a line to your account.
Verizon and AT&T: Current customers must be on premium unlimited plans to qualify for new phone promotions, but don’t be scared off quite yet. If the promotional value on the phone is greater than $300, it’s usually worth stepping up to a premium unlimited plan because it saves you money in the long run.
Now that you’ve got some general knowledge on what to look out for let’s look at those two paths you can take to find the best deal on the phone you want.
Saving Money with My Existing Carrier
We don’t need to tell you how competitive the wireless industry is. With the average consumer buying a new phone a little more than every two years, many new pricing plans, services, and perks that carriers offer to keep your business. That’s great news if you want to shave some money off your bill without having to switch to a new carrier.
With this in mind, here are eight tips to help you save money:
1. Autopay Discounts
All Big Three (AT&T, T-Mobile, and Verizon) carriers offer a $10 autopay discount. This is a simple and effective way to save $120 a year on your wireless bill—while having the peace of mind of knowing that your bill is getting paid on time, every time.
Now, you might be thinking, “I’m hesitant to set up autopay without reviewing my bill first.” Surprise charges can indeed happen, so it’s important to review your bill every month.
2. Affinity discounts
Affinity discounts are special discounts that certain groups of people receive. Examples include students, first respondents, seniors, etc. This is one of the most often overlooked ways to save money and can potentially give you the best savings for the least amount of effort if you qualify. Most carriers offer affinity discounts that can save you up to 42% on your bill! See table below:
3. Employee Discounts
Depending on where you work, you may be eligible for a special “employee discount'' based on the terms your current employer has established with different carriers. These employee discounts can vary based on your specific circumstances. If you work for a big company, government agency, etc., it's worth checking with your employer to see if you qualify for any employee discounts.
4. Updating Your Existing Phone Plan
The cost of data has been decreasing over the years, so you're likely paying higher than current market rates if you haven’t updated your plan in the last two years. If you’re one of the 20% of people still on an older plan, it might be time to check out a newer one.
5. Dropping Unnecessary Plan Features
We’ve analyzed thousands of wireless bills… and we’ve noticed that many people pay for services they never use. The biggest culprit behind the overspending? Insurance. Costing an average of $15 a month, that money adds up over time.
While you pay the same amount of money for your insurance, your phone eventually drops in value to the point where the monthly premium is a larger and larger percentage of what your phone’s trade-in value would be. So, it’s better for most people to pay for insurance for a short period of time when it would cost more to replace your phone than the sum of its insurance.
Keep in mind that when you replace your phone, you don't get a brand new device. You get a used phone that's been refurbished to like-new quality. So when you're comparing the value of devices, it's important to understand that your trade-in value is not the same as the retail value of the device you have.
Unsure if you should still be paying for your phone’s insurance plan? We’ve got your back. Check out our free Plan Navigator tool for custom recommendations based on your current plan. We can even send you reminders when we find a better plan for your unique needs.
6. Non-Advertised Discounts
As we mentioned earlier, your current carrier wants to keep your business while other carriers want you to switch over. If you don’t want to switch, the good news is that your existing carrier will often go the extra mile to keep your business—using pre-approved, non-advertised “retention” offers that customer service reps can use at their discretion to prevent you from canceling service.
We’ve seen carriers give up to 20% off service or special discounts on devices. These offers will vary based on your unique circumstances, and contacting your carrier via phone or chat can be tedious—but the payoff can be worth the effort!
7. Correcting Your Current Plan
If you remember when you first signed up for your current service, you might recall how the carrier offered you many perks like free Netflix, Disney+, etc. While these probably sounded great at the time, chances are you’re paying for more than you actually need in a plan.
The Big Three carriers have a 3 to 4 tier plan structure, and we’ve found that the top-tier plans are more than enough for most people. Still, many people end up overextending themselves because of the perceived value of the extra perks that come with the higher-end plan.
- Premium Unlimited Plan: If you’re a high-data user and want the best of the best, these plans are for you. They include the largest data amounts and extra features like hotspot and streaming services (Netflix, Disney+, etc.)
- Mid-Level Unlimited Plan: If you’re a high-data user and want specific extra features like hotspot and/or some streaming services, these plans are for you.
- Entry-Level Unlimited Plan: If you’re looking for unlimited plans but are not interested in extra features like hotspots or streaming services, these plans are for you.
- Capped Data Plan: If you don’t use a lot of data and want basic service, these plans are the best option for you.
For reference, the average American uses around 7GB of cellphone data a month. But we’ve seen some stark contrasts between Apple and Samsung users:
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8. Grouping Individual Lines Together
It’s no secret that the more lines you have, the less you pay per line. In fact, you might’ve noticed that carriers advertise a per-line price that assumes you’re going to get four lines of service. However, as many as 25% of Americans have only one line of service with their provider and, as a result, are paying up to 2X more for the same plan and service as someone in a plan with 4 lines.
So, if you have friends and family members that you’re close enough to share a wireless bill with, adding more people to your plan can save you up to $480 per year—along with everyone who joins your plan will also join in on the savings!
Save by Switching Carriers
Finding a better-suited plan for your specific needs can save you hundreds or even thousands of dollars. It all comes down to choosing the right parts. Choosing the right carrier, the right data plan, premium vs. deprioritized data; if you don’t know what you’re looking for, it can be really intimidating to switch carriers.
Whether you’re looking to save money, want better coverage, or want the best deal on a phone, understanding the following will help make sure you pick the best option for your money.
Picking a Wireless Carrier
When it comes to carrier choices, you have dozens of options to choose from. It all depends on what you need and what features and options you value most. But for the most part, there are three carrier “types” you can choose from:
The Big Three
As the name suggests, The Big Three are the three major networks virtually everyone knows; Verizon, AT&T, and T-Mobile. These three brands, also known as Mobile Network Operators, have radio spectrum, end-to-end service, cell phone towers, and SIM cards. Essentially, they independently own everything needed to deliver reliable network services, and as a result, will generally cost more for that reliability and service.
Generally speaking, switching can save you big, especially if you’re on Verizon or AT&T, as they traditionally have the most expensive plans. If you want a well-known brand, T-Mobile plans are generally cheaper and offer extensive nationwide coverage. However, if you have multiple lines on your plan and use many data, The Big Three are generally the carriers to choose.
MVNOs
Next, we have MVNOs or Mobile Virtual Network Operators. Unlike Mobile Network Operators (The Big Three), MVNOs essentially “rent” access to another carrier’s network. Mint Mobile, for example, uses T-Mobile’s network, so Mint pays T-Mobile a wholesale rate and sells you service on their behalf.
While virtually all cell phone coverage in the US uses the Big Three’s networks, MVNOs use the same ones while offering cheaper or more tailored pricing plans. Choosing from MVNOs like Cricket Wireless, Republic Wireless, Ting, Straight Talk have several potential benefits that could save you money:
- Cost: MVNOs are often more affordable alternatives to major networks as they target a prepaid market—making it easier to switch carriers at the best prices.
- Service for Price: Because budget carriers rely on larger, more established carriers for their coverage networks, for the money you spend, coverage can be good.
- Flexibility: MVNOs offer prepaid and postpaid options that make it easy to find the right payment plan for your needs.
Cable Carriers
Xfinity Mobile, Consumer Cellular, and GoogleFi offer great postpaid prices, while Boost Mobile, Cricket, and Mint Mobile all have extremely affordable prepaid plans. One of the best switching opportunities that save big while still providing premium data is the cable MVNOs like Xfinity Mobile, Altice, and Spectrum Mobile.
They offer amazing prices, especially for single line and unlimited plans, but come with a big caveat. You must already have them for home internet to add-on wireless service. So, you’re out of luck if you have Verizon FiOS, WOW! or RCN.
Newer Galaxy models are 3-4x more likely to be on MVNOs than newer iPhones. But that difference shrinks for 2018 and 2017 models. For 2016 models, iPhones are just as likely as Galaxy models to be on MVNO.
Keeping Promotional Offers and Discounts in Mind
While you’re thinking about choosing a carrier, be sure to consider what promos, discounts, and perks each carrier plan you look at includes. While these vary based on your unique circumstances, a few key ones to keep an eye out for are:
Better Discounts
While plenty qualify for affinity discounts, few people take advantage of the massive savings they can offer. When thinking about switching to a different carrier, be sure to check if the carrier you switch to offers better discounts for you.
AT&T, Verizon, and T-Mobile offer an array of affinity discounts that can save you hundreds of dollars per year. If you’re 55 years old or older, you could snag a discount of up to 42% at T-Mobile. That almost cuts your bill in half! Most of the other discounts will save you 20-33%, so they’re nothing to scoff at.
Promotional Offers
Carriers run promotions ad nauseam to entice you to switch. You see the commercials constantly, and they all blend because they usually seem like the same old gimmicks. Get the newest phone for free, the best deal ever! It sounds like a good deal before you read the fine print or shop around, but deals can be tricky, and there are a few key trade-offs. These promotions usually come with 24-month payment plans.
This is an attempt by carriers to get you to stick with them because you can’t switch until your phone is paid off. You are not tied to them by a contract, but most of the time, you have to pay off the remaining balance on your phone payment plan if you switch carriers.
Looking to switch carriers while keeping the phone you have? Carriers can unlock your device after the payment plan is completed, letting you change SIM cards for a new carrier plan unobstructed.
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