Slashdot Mirror
Ask Slashdot: Is Leasing a Smartphone Better Than Buying One? (cnbc.com)
An anonymous reader writes: The biggest benefit with a lease program is you have the option of upgrading to a newer phone model, usually after just a year. You don't get that option when you buy. But with a lease program, although it may be cheaper, you have to return the phone at the end of the agreement or when you upgrade -- meaning you can't pass it off to your child or sell it. So rather than leasing, buying may be a better option. But a New York Times column makes case for why leasing is the right way to go about it. I wanted to check with Slashdot readers, what do you prefer and why?
At this point, it is too little, too late. Phones are not changing frequently enough to really need to upgrade all that often anymore. Being on the Galaxy S5 right now and looking at the S8, there is only marginal increases over the past three years. Sure, it has a little more processing power, a little more RAM, and a little more storage, but that isn't all that needed.
If you don't care about your money it is great.
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Lease or buy? Are we serious with this shit?
When a phone gets so fucking expensive I have to debate whether to lease or buy it, it's time to buy a cheaper phone.
Sadly, many people feel otherwise, and will sacrifice a lot in order to maintain the "celebrity" status of owning fashionable hardware.
And as opposed to the article, I don't find my phone trashed in 2 years....I dunno what is with most people, but I tend to try to take care of all my possessions,including my phone.
It is in a case, and I am not careless how I handle it and I rarely if ever drop it.
Right now I'm not in a hurry to trade phones, in that I have some interesting lens attachments that likely wouldn't work on a new phone...so, I'm not in any hurry.
Does everyone else abuse their phones so badly that it requires annual replacement?
Do some people actually still consider XYZ phone to be some sort of status symbol?
To me, a smart phone, no matter the brand is pretty much a commodity item.
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
My phone is 4-5 years old and still works great. I'm paying less than if I had a new phone (with a balance on it) considering the same plan for both. How is constantly paying for the phone better than not constantly paying for the phone? Phones today don't change enough to warrant the getting of the next model, unless you like throwing away your money or want to be seen with the latest technology. In that case you are materialistic and that's that.
Tired of my customary (Score:1)
I always buy outright. Never borrow money or rent. With leasing, someone is providing you with a service over and above the simple purchasing of a thing, and you'll pay for that service. Save money by buying.
Like the subject says, in almost all use case scenarios consumer leases are a scam. They great for the leasor, who gets a constant cash flow because most consumers can't afford or are unwilling to pay the buyout at the end of the lease, and thus create a perpetual rental situations.
It's different for businesses, because while actually purchasing a capital asset means you can only write off the asset via depreciation, which can take a few years even for a phone, a lease is a regular write off. Unless your self-employed, and thus can gain some benefit from the monthly write off of the lease, it's better just to buy the bloody phone, either outright (which is what I do, I don't do phone contracts) or as part of a contract.
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FTFA :-
... there is a certain comfort to always having the latest.
That's a givaway - it's an entirely emotive reason, just wanting shiny. I don't give a shit. I have a dumb phone that's about 7 years old and I'll use it until either it fails or they change the network technology.
If you can't afford a $1000 phone outright, you can't afford a $1000 phone, period. No matter how you finance/lease it.
Sane personal/family financial planning should allow you to save in order to be able to afford that phone, or simply choose a less expensive phone to begin with.
And like cars, you'll be loosing more money if you lease. Keeping a car for 10+ years saves a lot of money compared to leasing a new one every 4 years. And both of them will get you from point A to point B.
You pay it all off in two years with the lease though.
How sweetly naive. They're not giving you a 0% loan, silly, the interest is incorporated into the exorbitant price in order to make you think that you're getting a free loan.
How about: Never take out loans for rapidly depreciating items? Cash or 'you don't need it that bad', find a cheaper alternative.
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Hmm...I've never had many problems with "loose" money. It I were too loose with my money, I'd risk losing it.
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
Seriously?
If it's cheaper to buy over the life of the item you use than to rent, BUY. Appreciating Asset or not.
I would think better advice is thus:
1. Don't ever borrow to secure items that cannot secure the loan used to buy them. (I.E. Only buy real property on time.)
2. Never owe more on an item than it's worth.
Followed up by:
NEVER charge to unsecured debt if you cannot pay it off at the end of the month (i.e. pay cash).. And, if you don't want to live in fear all your life, always put aside money for saving every month so you can deal with the unexpected when it comes, because it will.
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Does everyone else abuse their phones so badly that it requires annual replacement?
Even if they do, that's still a point in favor of buying. Most lease programs and tradeup programs I've seen require the phone to be defect free. If you have a phone with a small crack, you can still use it, hand it down, or sell it. If you are in a lease program, you're likely going to be forced to pay to have it repaired.
You might be surprised how many people put a cell phone, without any kind of screen protector, into their pocket with their keys.
I do this. No protector or case. It hasn't damaged my screen one bit, although it has caused damage to the non-glass finish -- but I couldn't care less about that. I've had this phone for four years and it's still going strong.
Well, the other downside is that you paid Apple way, way too much for what you received in return. Other than that, yeah rock on!
Yeah I keep hearing that myth about Apple devices being so expensive and then I see Samsung and Microsoft charging pretty much the same for their premium devices, with Google not being far behind these days. Meanwhile, the resale value on my iPhones and iPads has been phenomenal. So, I never pay all that much for my new devices.
No, because if ANYTHING happens to the phone during that year, you're totally at the lessor's mercy. They can charge you the full original MSRP (and probably a penalty on top) if the phone gets lost/stolen/broken during the year, or if you return it in less than shrinkwrap-pristine condition (their official definitions of "normal wear & tear" almost certainly deviates from YOUR understanding of what it means). And if you DO need to buy a replacement at some point during the year, there's usually a clause requiring that you purchase that replacement FROM THEM, at WHATEVER PRICE THEY DICTATE... if you bought an identical replacement from Amazon or Newegg, they'd be entitled to refuse it (since the phone's serial number wouldn't match the serial number of the one they sent you), charge you some inflated shipping & handling fee to send the refused phone back to you, AND charge you their official inflated replacement price (plus some penalty) anyway. The fact that they're probably going to turn around and sell the returned phones to someone like Asurion for $10/pound as scrap doesn't matter... there's almost certainly a mandatory arbitration clause, and you'd spend 100 times the phone's purchase price on a lawyer attempting to PROVE it to the arbiter.
With consumer-item leases, the deck is totally and hopelessly 100% stacked against you. Sure, you might get lucky... but if you lose the dice roll, you're going to be in a world of pain by the time they're finished throwing arbitrary penalties at you. Especially if there's no language allowing you to purchase the item at the end of the lease.
If you truly intend to keep the phone for a year, buy it outright, then sell it yourself using swappa.com, craigslist, or ebay after buying your new one. At least then, you'll be able to fix it if it breaks, and buy replacements from whomever gives you the best deal, instead of being totally at the lessor's mercy.
Just to give you a small idea of how evil some companies can be, after Hurricane Wilma, I got a letter that was sent to me by mistake by Enterprise Rent-a-Car (I'd rented a car from them a few weeks earlier, and their loss department fucked up and sent the letter to me by mistake) demanding the immediate payment of almost $7,000 for damage to a rental car caused by flooding (Wilma caused extensive flooding in Miami). Anyway, they admitted it was sent to me by mistake, but what I'll never forget was the first paragraph of the letter, which basically said, "the Loss Damage Waiver doesn't include coverage from flooding", then conceded in the next sentence that the language in the brochure might have been "confusing" since it implied "total coverage" (you know, the usual excuse of corporate America... "total" on the marketing materials means "total coverage for what we decide it covers, subject to any exclusions incorporated by reference into the fine print of Article VIII, section c(iii), page 84, on file with the state Department of Commerce). A few months later, I remember seeing a story on the evening news about thousands of complaints filed by consumers against rental car companies who tried doing that exact thing. From what I recall, the state eventually ruled against most of the rental car companies, but the only penalty was that they had to eat the loss and refund any amount already paid. In other words, it was a totally safe gamble for them... "heads they would have won, tails they merely broke even".
Run the numbers and pick the cost-effective choice, whatever it may be.
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"The biggest benefit with a lease program is you have the option of upgrading to a newer phone model, usually after just a year. You don't get that option when you buy. "
Sure you are, you just sell the old one on ebay and buy another one, but you actually have to _buy_ it, not use the ripoff 'buying' that the providers use.
Exactly. The problem is people want different things. Some people consider it worth it to have a new car every 3 to 5 years or so, so they lease. Fine - it's their money, it's what they want. But to argue that it makes financial sense to lease because it's a depreciating asset is moronic - you're always paying the maximum depreciation (the first few years) when you lease.
Stupid sexy Flanders.
He's actually suggesting that you not buy new cars, as they are not salable for the price you pay at a dealer. You lose value as soon as you drive off the lot.
I apply this in practice by never buying new cars.
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