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Thread: Better to buy Phone outright or pay for it over time?

  1. #1
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    Better to buy Phone outright or pay for it over time?

    T-mobile now gives us the option to either pay for a phone all at once or pay for it over 24 monthly payments. I also know that even if you go for the monthly payment option, they will charge you tax on the full amount when you first pay for the phone. For those choosing the monthly payment option, does anybody know if tmo will double tax you by charging tax on the full monthly bill (which includes the $20/mo phone portion which you already paid the taxes on) and not just the plan part of the bill? Only reason I ask is I know taxes on cellphone plans are ridiculous so I don't want to be double taxed.

    I'm about to switch to tmo for the HTC One and debating if I should just pay for the phone outright or pay over time.

  2. #2
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    I'm not sure about the tax info, but in my experience, and from my research, it's pretty much always cheaper in the long run to buy the handset outright. It's rough for most to drop the 5 and 6 hundred plus for the premium phones at once, but over time you'll come out cheaper. I was blessed with my last 2 phones to have bonuses from my job that covered the cost of the phone, so I've been out of contract for about the last 6 years or so. I currently have an ATT Galaxy Note Flashed to run on Tmobile's network, with Solavei as my provider. Not really pressed about upgrading till the Note 3 is announced or Something comparable comes out. Now it's just a matter of budgeting so that I have the funds available when the next phone for me comes out. Sorry for the novel, but if you can swing it, buy it outright.

  3. #3
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    I'm in the same boat, about to make the switch and debating the benefits of paying full-price up front vs. over time. I have to buy three phones, and yet, there's something about not having a contract that I find very enticing.

  4. #4
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    I find that i'm happier paying for the phone at full price. And typically, MSRP or store retail price is higher than where you can get the phone in other markets (ie amazon, ebay, etc).

    But in the case of the iphone, for example, T-Mobile has the lowest price and the financing is 0% so i'd go with T-Mobile.

    ^ TMO LTE ^---------------|------St Louis-------|----------------^ ATT LTE ^

  5. #5
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    Wirelessly posted (i0wnj00: Mozilla/5.0 (BB10; Touch) AppleWebKit/537.10+ (KHTML, like Gecko) Version/10.0.10.822 Mobile Safari/537.10+)

    Buy it out right if you can. Different jurisdictions have different rules on how and when sales taxes apply.

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    In California, sale tax is charged up front on MSRP price.
    Phone History: Samsung Galaxy Note 2 | HTC Sensation 4G | Google Nexus One | HTC HD2 | Nokia 5230 Nuron | Nokia N900 | BB Curve 8900 | iPhone 3G | Google Ion | Nokia 5800XM | Nokia E71-2 | T-Mobile G1 | iPhone 2G

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  7. #7
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    They charge the tax on MSRP up front, and the monthly payment is not taxed and the bill clearly separates what you're being charged/taxed for.

    I always pay half upfront, then 1-2 months later i pay off the remaining balance. It's 0% so why not.
    Left: T-Mobile Unlimited LTE, Right: CenturyLink DSL at Home

  8. #8
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    Quote Originally Posted by brad15 View Post
    They charge the tax on MSRP up front, and the monthly payment is not taxed and the bill clearly separates what you're being charged/taxed for.

    I always pay half upfront, then 1-2 months later i pay off the remaining balance. It's 0% so why not.
    Yeap, interest free payment = why not?

    I'm still paying $20/month for my Note II (20 months EIP on a Value Plan).

  9. #9
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    Quote Originally Posted by brad15
    I always pay half upfront, then 1-2 months later i pay off the remaining balance. It's 0% so why not.
    I like this idea as well. Even if don't pay half upfront, you can wait a few months and pay the rest off or you can pay the $20 for a few months and then just pay the balance when you're ready. In any case, I like T-Mobiles idea if you don't care for a subsidized device.

  10. #10
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    Tax is paid up front. No tax on the monthly installment.

    Sent from my Galaxy Note II
    Castrol EDGE 5W-30 is my drug of choice.

    Primary: iPhone 5S, Galaxy S4, & LG L90: 5 lines, 1x $15 5GB data, 2x $5 Android web, 1x $2.99 T-Zones, corp discount + $10/mo loyalty discount = $93/mo tax inclusive
    Secondary: iPhone 4S & Optimus Dynamic II: TracFone (Verizon); LG Mach: RingPlus (Sprint)
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  11. #11
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    Installment first, then pay in full.

    I just switched to TMO yesterday and bought three phones in the process. I was told I couldn't pay for the phones in full at that time, but could once I got my first bill. No difference really, since there's no interest, but just something to note if you're buying one any time soon.

  12. #12
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    Of course you can pay in full. But I think you were told that because the rep gets a commission if he signs someone up for payments.

  13. #13
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    Quote Originally Posted by jet1000 View Post
    Of course you can pay in full. But I think you were told that because the rep gets a commission if he signs someone up for payments.
    Yep. There's a kickback for EIP. Pretty shady of the rep.

  14. #14
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    Quote Originally Posted by IsLand_BoY View Post
    Tax is paid up front. No tax on the monthly installment.

    Sent from my Galaxy Note II
    Thanks for clearing that up for me.

  15. #15
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    If you don't talk a lot, paying for the phone outright then moving to the $30 unlimited plan might be your best bet. Even for a $650 phone, you're talking about $1370 for 2 years vs $1780+ for 2 years with the $50 plan.

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