Navigating smartphone promotions can often seem complex, especially when advertisements highlight extremely low prices without detailing the full terms. Here’s a clear breakdown of how these promotions typically work, so you can make informed decisions for your business’s mobile needs.
Option 1: 2-Year Service Agreement
When a business opts for a smartphone with a 2-year service agreement, the upfront cost of the phone might be minimal (e.g., $0.99). However, this low initial price is offset by an increase in the monthly plan rate. Specifically, the UYW plan cost increases by $25 per month over the 24 months of the agreement. This means that while the iPhone 15 128GB initially costs $0.99, the total cost will be $600.99 over two years due to the increased plan rate. After the contract period, the plan rate decreases by $25.
Option 2: Monthly Installments
If a smartphone is purchased on monthly installments, the monthly plan rate remains unchanged, but the business pays monthly installments based on the full retail price of the phone. For example, if the full retail price of an iPhone 16 128GB is $829.99, and it’s spread over 36 months, the monthly installment would be $23.06. Businesses can choose to spread these payments over 24, 30, or 36 months.
Promotional Discounts
Often, promotions will advertise a low monthly cost for a device. For instance, if a promotion offers an iPhone 15 128GB for $5.99 per month, this rate is achieved through monthly bill credits. Here’s how it works: the full retail price of the iPhone 15 128GB is $729.99. Over 36 months, the normal monthly payment would be $20.28. With a promotional credit of $14.29 applied each month, the payment is reduced to $5.99.
The same principle applies if you choose a 24-month term; the monthly cost after bill credits would adjust accordingly $8.99. Always ensure to understand the term over which these credits apply to avoid surprises.
iPhone 16 128GB Financing Options
Cost Breakdown on Unlimited Your Way Advance Plan with 2 Year and Installment Options
| Financing Option | Initial Cost | Monthly Cost |
|---|---|---|
| 2-Year Contract | $199.99 upfront | $95/month ($70 plan + $25 phone subsidy) |
| 36-Month Installments | $0 upfront | $93.06/month ($70 plan + $23.06 installment) |
| 30-Month Installments | $0 upfront | $97.67/month ($70 plan + $27.67 installment) |
| 24-Month Installments | $0 upfront | $104.59/month ($70 plan + $34.59 installment) |
This example above is for the iPhone 16 128GB and for simplicity, I used the Unlimited Your Way Advance plan for a business customer with one line. The taxes for the iPhone 16 128GB on a 2 year are on the $199.99 price. In Florida, 7% is $14. The iPhone 16 128GB on installments, the taxes are on the $829.99 at 7% in Florida, which amounts to $58.10. Taxes on installments are paid upfront on the first bill or by credit card.
Trade-In Deals
Trade-ins can also provide significant savings. For instance, trading an iPhone 12 Pro might offer a credit of $830 towards the purchase of an iPhone 16 128GB, effectively covering the monthly installments fully if the trade-in condition is met (i.e., the device is in working order and free from damage). FREE PHONE!!!!
Recommendation
We generally recommend a 24-month term for businesses looking to balance between lower monthly payments and quicker completion of payment terms, allowing for more frequent upgrades or changes as needed. Example the iPhone 15 128GB is on promotion for $5.99 a month on a 36 month installment. On a 24 month installment the cost is $8.99 a month. You monthly payment is higher but the phone gets paid of faster and the credits get applied faster.
Special Note for FirstNet and Large Business Customers:
For FirstNet users and businesses with 50 or more lines, there are exclusive pricing and promotions available. To get all the details tailored to your company’s needs, please contact me directly.
