Aug 20th, 2009
Think Total Cost, not Money Down
I’m not a fan of telephones (ask anyone who tries to call me) and I’m really not a fan of the mobile phone industry. Their stunts and games and attempts to lock me into longer and longer contracts with poor customer service and caps on data service drive me crazy.
That said, in this country at least, the idea of a “free” (or reduced price) phone is what entices consumers.
Think about total cost of a device when you buy it. For instance, you can get a great deal on the purchase of an iPhone 3G–$99 new or $49 refurbished–straight from AT&T. Yes, that’s great–until you consider the $69.99 monthly minimum for a voice and data plan. The price of the plan over two years–$1679.76 before tax–is many times the cost of the device, making the total cost of the least expensive device $1728.76.
The Sprint SERO plan I’m on (unlimited data, unlimited text, and more minutes per month than I’ll ever use) is unfortunately not available any more, but costs me $720 over two years pre-tax, meaning that my device would have to cost over $1,000–it doesn’t–for the total cost to be the same!
Consider these costs when making any kind of financial decision involving a contract over a year or two.
