What the Tech? Can You Save Money by Upgrading Your iPhone?
When Apple unveils the new iPhone 13 next week lots of current iPhone customers will ask themselves “should I upgrade now or keep the phone I’ve got?”
Every new iPhone is at least a little better than the previous one. Most of the time it isn’t worth spending another $800-$1,000 for a better camera, screen and speed.
Who would ever think you might save money by upgrading your phone every year? Let’s crunch some numbers.
iPhones lose a lot of their value in the first year. Around 35% according to a new study from Decluttr.
Last year’s iPhone 12 is $799 and the new the iPhone 13 will be about the same. That breaks down to about $33 a month with a 2 year contract. If you have an iPhone 11 to trade in, one in good condition is worth $390 from Apple and the carriers which would bring the cost down to $459 for a one-time payment or $17 a month.
So what if you hold onto a phone for longer, say 4 years. By not paying anything for the phone once the 2-year contract is over and you’ve fully paid for it, you’ll save $792 since you’re not paying anything for the phone for 2 years.
But here’s what happens if you trade in that phone after 4 years: an iPhone 8 in good condition is worth up to $120 (according to Apple’s trade-in value), bringing your monthly bill to $28.29 which is just $5 less than you’d pay for a brand new iPhone 12 with no trade-in.
What do we have so far?
An iPhone 12 with a trade-in of an 11 in good condition is $459 total.
An iPhone 12 after trading in an iPhone 8 is $679.
Include the savings by not paying monthly for that iPhone 8 for 2 years, you’re saving a total of $570 by upgrading to the iPhone 12.
But, and this is important, if the trade-in phone has any damage such as buttons don’t work or it is cracked, it has no value at all. Apple will offer to recycle it for you.
Four years is a long time to keep an iPhone in pristine condition. If it is damaged you’ll be left paying $799 out of pocket for a new iPhone 12. Which is just $7 more than what you’ve saved by not paying for a phone for 2 years.
The numbers are going to change next week. When Apple releases a new iPhone, the previous version typically drops in price by about $100. Decluttr estimates iPhone12 Pro phones will lose about $168 of value next week and all iPhones will depreciate once Apple makes its announcement.
If you want to really save some money this is a good time to shop around. Carriers are willing to drop the price even further, or give you a device free by switching to their company.
The iPhone 13 will be announced Tuesday, September 14th.