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- Buy from the carrier if you want the biggest discount and don’t plan on switching carriers.
- Buy direct from the brand or retailer if you want the freedom to change carriers and don’t mind paying full price.
- Buy used from eBay or Swappa if you want the freedom to change carriers but don’t want to pay full price.
Buying a new cell phone can be confusing. Carriers, retailers, and the brands themselves are constantly cycling through new offers, plans, and promotions and it’s hard to keep track of which offers will meet your needs and save you the most money.
Although there are literally thousands of places to buy a new phone, I’m going to go through a few of the most common places to buy one and discuss some of the pros and cons of each.
Table Of Contents
Buying A Phone From The Carrier
Buying directly from a mobile carrier like Verizon, AT&T, and T-Mobile, or a smaller carrier like Republic Wireless, Tello Mobile, or Google Fi Wireless (formerly Project Fi), is usually the easiest way to go about buying a new phone. After all, most of us have been buying from our carriers for a decade or more.
Current Carrier Phone Offerings
The list of phones each carrier has available changes often, sometimes even weekly. If you’re flexible on which carrier you use for your cell phone service it is worth comparing prices and deals across each of the carriers. Below are links to phone listings for many of the most popular carriers so you can find the best deals.
Advantages of buying from a carrier
Another advantage to buying directly from your carrier is simplicity. You know you’re getting a phone that works on their network and in most cases you can bring it back to the store if you have an issue.
Your carrier will usually set up your phone, install the sim card (the card that your phone uses to tell what network it’s on), transfer files from your old device, and make sure everything is working before you walk out the door. If you’re not technically inclined, or you just don’t feel like dealing with this type of stuff, then this may be worth buying from your carrier, regardless of the discount.
Typically you’ll find the biggest cell phone discounts when you buy directly from the carrier. Carriers make more money selling you the service plan than selling you the phones themselves so they’re constantly discounting the cost of the phones to get you signed up.
Of course, the discounts usually come with a few strings attached.
Disadvantages of buying from a carrier
Payment Plans (Quasi-Contracts)
When I talk to friends about buying a new phone, most of them ask if cell phone carriers still require contracts. Technically speaking, most carriers no longer use service contracts like they used to BUT, they’ve become much more creative with the way they discount their phones.
Let’s say a carrier is offering $300 off an iPhone or a Google Pixel (a great phone by the way). We’ll say the phone starts at $650, so the net cost of the phone to you would be $350… a great deal.
Here’s where it gets tricky – the carrier doesn’t discount the $300 up front. Instead, they apply the discount in the form of monthly bill credits ($12.50/mo) over two years. If you terminate service before the 24 months are up you are no longer eligible for the remaining credits and you must pay off the remaining portion of the phone – including any monthly credits not yet applied.
While this is not technically a contract (you’re free to leave at any time) the majority of customers are going to stick around to make sure they get their discount.
Of course, buying a cell phone from a carrier doesn’t come without pitfalls. Cell phone carriers are notorious for nickel and diming customers – and with Net Neutrality and consumer protections being chipped away, this isn’t likely to get better anytime soon.
When you get a new phone, most carriers charge an “activation fee” for new customers and an “upgrade fee” for existing customers. In the case of Verizon, these fees are $20 and $30 respectively, at the time of this writing.
Some carriers charge a fee even if you buy a phone outright for full price.
New Customers Only
If you’re an existing customer and looking to upgrade your phone with your current carrier, I have bad news. Carriers are notorious for offering discounts to new customers only – especially if they’re switching away from their competitors.
If you’re looking to upgrade your phone, make sure the discount applies to you before buying.
Upgrade your plan or no discount
This is a new one. Carriers have been pushing their unlimited data plans for a while now, but over the last few months, I’ve noticed that many carriers are reserving new customer and upgrade discounts only for those customers who sign up for unlimited plans.
If you’re a customer who needed an unlimited plan anyway then you’re all set, skip ahead to the next section, but if you don’t actually use enough data to justify the price increase of an unlimited plan then you’re just throwing away any savings earned from the discounted phone. Before you sign up it’s very helpful to understand how much data you’ll actually need.
Pros and Cons of Buying From The Carrier
- Bigger discounts (usually)
- Ease of setup
- Hidden Fees
- Tied to payment plan (“quasi-contract”)
- Discounts For New Customers Only (sometimes)
- Discounts with upgraded plans (sometimes)
Buying A Phone Direct From The Brand
Although most of us have been buying from carriers since cell phones were invented, cell phone brands have jumped in on the action of selling phones directly to consumers.
The biggest brands like Apple, Samsung, and Google, along with relative newcomers like OnePlus all sell phones directly on their websites. In the case of Apple – who has a much larger retail presence than the rest – you can buy one right in their store without getting the carrier involved at all.
Advantages of buying from the brand
Phones like the iPhone, Google Pixel, or most of the Samsung line all have antennas that can be used on almost any carrier (GSM and CDMA), which means you’re free to shop around and find the plan that fits you best, and hopefully saves you money.
Freedom to sell it
When you own your phone outright you always have the option to sell it and buy a new one. Most carriers offer a program to trade in your phone when you buy a new one, but in many cases selling your phone outright on a site like eBay or Swappa can actually net you more money for your phone as compared to a trade-in. This is especially true for iPhones, which tend to go for a premium.
Most major flagship phones come with some kind of warranty like Apple’s AppleCare or Google’s Preferred Care Plan. While it’s true that these phones can be covered under warranty regardless of where they are purchased, buying directly from them simplifies the process so you’re not trying to find proof of purchase from a third-party vendor.
Disadvantages of buying from the brand
Carriers have been supplementing the cost of phones for so long that paying full price for a phone comes with a bit of sticker shock. This is especially true if you’re buying the iPhone X or the Samsung Note 8, which both run close to the $1,000 mark.
Most major carriers do offer 0% monthly financing on their phones so you can break up the cost, but you’re still paying a whole lot of money.
The good news: Most brands offer free shipping when you buy their phones direct. The bad news: You have to wait for it to get shipped to you. When you buy from a carrier or a store like Best Buy, you can walk in, buy a phone and walk out. If you’re impatient like I am, waiting can be annoying!
Pros and Cons Of Buying Direct From The Brand
- Carrier flexibility
- The phone is actually yours
- Easier warranty support
- Sticker shock
- Very few price discounts
- Waiting for shipping
Buying A Phone From A Retailer
Buying a phone from a retailer like Amazon, Best Buy, or Walmart has many of the same benefits (and drawbacks) that you would get from buying directly from the brands themselves, but I wanted to separate retailers out into their own category for a few reasons.
The push for a payment plan
First, most retailers will push customers toward a payment plan. They do this because they get a kickback from the carrier for signing customers up, and carriers want customers on payment plans as we discussed earlier. Some stores such as Best Buy have priced phones an additional $50 higher to dissuade customers from buying outright, so be sure to comparison shop if you plan to buy outright.
Most retailers aren’t heavily invested in the cell phone market, so their supply will usually be more limited compared to a carrier store. In most cases, you should be able to find an iPhone or Samsung in stores like Walmart or Target, but if you’re looking for the latest from LG or HTC, you’re probably not going to find it.
It should also be pointed out that Amazon has been feuding with both Apple and Google recently regarding their streaming services and as a result, they’ve taken iPhones and Pixel phones out of stock from time to time. That said, Amazon is a great place to buy a case for almost any brand of phone out there!
Pros and Cons Of Buying From Retailers
- Carrier flexibility
- The phone is actually yours
- Immediate gratification
- Tend to push toward payment plans
- Limited supply of smaller brands
Buying A Used Phone
Advantages of buying used
It saves money
The biggest benefit of buying a used phone is that it saves you money. On reputable sites like Swappa, you can find phones in mint or near-mint condition at steep discounts – sometimes hundreds of dollars less than you’d pay retail. I’ve been watching the price on Google’s Pixel 2 phone recently, and I’ve seen them selling for around $500 as opposed to the $650 it would cost to buy a new one.
Warranty may still apply
Some phones are covered under warranty even if you’re not the original owner. This varies from phone to phone, but in some cases, brands will honor the warranty even if you didn’t buy it from them. If you buy from the original owner do yourself a favor and get a copy of the receipt in case you have an issue down the line.
Disadvantages of buying used
How used is it?
Like buying a used car, buying a used phone comes with an obvious downside. Even though you can look at a phone and see that it’s in great shape, with no scratches on the screen or body, you never truly know how the phone was treated by the previous owner. Did they use a bad charger? Did they leave it in their car in extreme heat/cold? It can be hard to say.
This is why I recommend buying from a site like Swappa that offers some level of buyer protection as opposed to eBay and especially Craigslist where there is very little protection.
Does it work on my carrier?
Whenever you buy a phone outside of your carrier it’s up to you to determine whether or not your phone works on your carrier’s network. Most flagship phones like the latest iPhone or Samsung Galaxy will work on any carrier, but not all phones work on all carriers. For example, OnePlus phones support GSM only and not CDMA so you wouldn’t be able to use them on Verizon or Sprint. In most cases, you can ask your carrier or do a quick Google search to determine whether the phone will work or not, but it is a little extra legwork.
Pros and Cons Of Buying Used
- It’s a great way to save money
- The phone is actually yours
- Carrier flexibility
- You don’t know how the phone was treated by the previous owner
- You need to be sure the phone works on your carrier