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Thread: Phone subsidy or buy outright?

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    Phone subsidy or buy outright?

    My wife and I are looking at purchasing the new Note when it comes out (hopefully next month). The way I understand it now, you have an option to pay a reduced price ($199 for example) for a phone and get the rest subsidized through ATT. Or, now you can pay for the phone outright and not have the phone subsidized. With that, I have 3 questions:

    1. I'm assuming, if subsidized you pay a higher monthly bill than if you buy the phone outright. Is that assumption correct?
    2. I did an example on ATT's website and it appeared that the price you pay over the life of the contract came out to about the same. Is one option better than the other?
    3. We currently have the unlimited data plan from a few years ago. Would choosing the unsubsidized option cause us to lose unlimited data? Anything else we need to consider?
    The dyslexic, agnostic, insomniac, lays awake all night wondering..."Is there really a DOG?"

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    Quote Originally Posted by cyberpac9 View Post
    My wife and I are looking at purchasing the new Note when it comes out (hopefully next month). The way I understand it now, you have an option to pay a reduced price ($199 for example) for a phone and get the rest subsidized through ATT. Or, now you can pay for the phone outright and not have the phone subsidized. With that, I have 3 questions:

    1. I'm assuming, if subsidized you pay a higher monthly bill than if you buy the phone outright. Is that assumption correct?
    2. I did an example on ATT's website and it appeared that the price you pay over the life of the contract came out to about the same. Is one option better than the other?
    3. We currently have the unlimited data plan from a few years ago. Would choosing the unsubsidized option cause us to lose unlimited data? Anything else we need to consider?
    If you have the existing unlimited data plan like I do, then you'll want to sign a new two-year contract. The old unlimited data plan was designed for contracts. If you don't then you should switch to the mobile share value plans. That way the cost of the plan will be cheaper since you'll be paying outright.

    BTW: Every new note that has launched has cost $299 on contract and like $700+ off contract. Hope you have a big wallet lol.

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    Quote Originally Posted by MattMJB0188 View Post
    If you have the existing unlimited data plan like I do, then you'll want to sign a new two-year contract. The old unlimited data plan was designed for contracts. If you don't then you should switch to the mobile share value plans. That way the cost of the plan will be cheaper since you'll be paying outright.

    BTW: Every new note that has launched has cost $299 on contract and like $700+ off contract. Hope you have a big wallet lol.
    OK, so you're saying the only way to take advantage of buying outright, a new contract is needed and I'd lose my unlimited data?

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    Quote Originally Posted by cyberpac9 View Post
    OK, so you're saying the only way to take advantage of buying outright, a new contract is needed and I'd lose my unlimited data?
    Buying outright with unlimited data plan line will be way too expensive. Upgrade your unltd data contract and get phone subsidized. You won't loose your unlimited data since it's AT&T not Verizon.

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    Quote Originally Posted by farhan.cma View Post
    Buying outright with unlimited data plan line will be way too expensive. Upgrade your unltd data contract and get phone subsidized. You won't loose your unlimited data since it's AT&T not Verizon.
    When you say "upgrade your unltd data contract", do you just mean renew the current contract I have? That's what I was considering doing - renewing my current contract and subsidize the phone. But, if it means saving a lot of money over the life of the contract, I *might* consider buying the phone outright and switching plans. But it'd have to be a significant savings to lose unlimited data.

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    Quote Originally Posted by cyberpac9 View Post
    When you say "upgrade your unltd data contract", do you just mean renew the current contract I have? That's what I was considering doing - renewing my current contract and subsidize the phone. But, if it means saving a lot of money over the life of the contract, I *might* consider buying the phone outright and switching plans. But it'd have to be a significant savings to lose unlimited data.
    No, I mean just upgrade (extend your current contract with existing plan) your current line and get note for $299 instead of $700+

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    Gotcha - that's what I was trying to say, just using different words.

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    How much are you paying with tax? How much data is used per month? Do you need roaming? There are a lot of options now, including prepaid. Unsubsidized your savings need to be around $17 a line to break even over 2 years if you pay $300 per phone with new contract.

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    Isn't the early termination fee $350? Wouldn't it still be cheaper to get it subsidized than buying outright?

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    Quote Originally Posted by VisionsDivine View Post
    Isn't the early termination fee $350? Wouldn't it still be cheaper to get it subsidized than buying outright?
    It depends on how much they are paying right now. Let's say it is $210 for two lines and they both use less than 5gb each. If they were OK with crickets service, and its limitations, they would pay $110 per month for the 5 GB per device on two lines with group savings. This would save $100 a month which translates to $2,400 over two years. Subtract the subsidized phone savings of $400 per phone and they would still save $1,600 over two years.

    This is why it matters on their expectations, current use, and current costs. There are many options with all of the carriers that can deliver major savings if you buy your own phones outright. Some of these are postpaid and some are prepaid. Honestly, if you are not using more than 5gb per line you will pay significantly more to get that subsidy.

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    One thing to consider is the taxation on plans and equipment. As I understand it, depending on your state, if you buy a $199 subsidized phone, they still charge sales tax on the MSRP (e.g. $600). The state then collects cellular service taxes on the extra ~$20/mo that your plan costs to pay off the phone that you've already paid full sales tax on. Then, in some states, if you want out and pay the ETF, they'll tax you on that to. Just something to consider.
    Donald Newcomb

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    Quote Originally Posted by DRNewcomb View Post
    One thing to consider is the taxation on plans and equipment. As I understand it, depending on your state, if you buy a $199 subsidized phone, they still charge sales tax on the MSRP (e.g. $600). The state then collects cellular service taxes on the extra ~$20/mo that your plan costs to pay off the phone that you've already paid full sales tax on. Then, in some states, if you want out and pay the ETF, they'll tax you on that to. Just something to consider.
    This depends on the registered user address. I believe that california(why am I not surprised) charges the tax on the full retail amount. II'm not in Cal, so my tax for the last 5 or so years has only been on the discounted charge. Also, unless I have read the Next plan or whatever, charges full tax amount upfront, but this is just what I've read.

    I notice you are in NV, which has some of the cheapest taxes in the country.

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    You have many factors to consider:

    1. Are you at an upgrade point on your current phones? If not, new phones will be full price.
    2. If you are at upgrade point, your current phones are not worthless - figure what you can get out of them into the equation.
    3. Above all, don't endanger your unlimited data, as it is probably the most valuable thing in the equation in the long haul.
    I don't feel like a thread-killer...

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    Quote Originally Posted by kirt View Post
    You have many factors to consider:

    1. Are you at an upgrade point on your current phones? If not, new phones will be full price.
    2. If you are at upgrade point, your current phones are not worthless - figure what you can get out of them into the equation.
    3. Above all, don't endanger your unlimited data, as it is probably the most valuable thing in the equation in the long haul.
    1. Yes
    2. Already looking at selling our current GS3's.
    3. That's the one thing I keep coming back to - keeping my unlimited plan. I was considering looking at how much data we use to see if another plan was cheaper. But, even if cheaper, I'm not sure I want to give up the unlimited.

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    Enough data today will not be enough in 6 months or a year .

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