AT&T's Newest Next Plan Asks for 30% Downpayment
Ok who's jumping on next??
Let's look at a typical two year contract. First and foremost, when you buy (as an example) the typical phone for 99¢, do you really think that it cost only a dollar to make? That is where the two year contract came in, to make up the subsidized price. Here's the simple math on the new LG Escape 2-
Price up front- 99¢+tax (in my state it's 8%)
Activation/upgrade fee- $40
Because you are going under contract, you lose the discount on the mobile share plan (this is how they make up the difference between the 99¢ and retail price. Keep in mind carriers don't make money on retail pricing) which on the typical 10GB plans is $25/month.
If you add this up, that is ~$641
Next program up front is...
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-15*20= -300 savings
-15*24= -360 savings
-15*30= -450 savings
Therefore depending on which installment plan you choose, in order to save money, the phone's total saving must be more than the upfront cost of the 2yr contract price AND the total savings discount for that specific program (upgrade fees also, unless you call in to customer care and try to get them to remove it. Mostly successful if you have tenure).
Now the phone you chose, a very low-end entry level phone (retail value $180), is not a good standard to use. Most of the U.S. market goes for flagship phones. L...
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I'm sorry but no one is making these decisions over an LG Escape. Anyone who ever entered into a 2 year contract for as a cheap a phone as that either doesn't know anything about cell phones or just isn't too bright.
All that said, there are times the new plans make sense more than a typical 2 year contract but the savings aren't always as big as some would have you believe.
And don't ever think that while they make it try to sound like they're saving you money that they aren't going to find a way to make more of their own.
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