4 ms·

people 0% finance phones for 2 years, which Apple gets paid up front for.

by abfan1127 4y ago

ratsmack 4y ago
It's the free phone tax, where you end up paying double the cost of the phone by the time the 2 year contract expires.
- dangus 4y ago
  Huh? You can finance phones directly from Apple completely separate from your phone plan. You can buy an iPhone and pop in a Mint Mobile SIM. There's no "free phone tax" if you buy it the right way.
- nemothekid 4y ago
  How do you pay double if the interest rate is 0%?
  - rabuse 4y ago
    Contracts require monthly phone service, and all the other fees they tack on along with those charges.
    - nemothekid 4y ago
      Whether or not you buy an iPhone full retail, or at 0% interest, that monthly service fee is the same. Carriers haven't subsidized phones for years now. I think the GP is mistaken. There is no "free phone tax" is you pay monthly for your phone.
      - hnlmorg 4y ago
        Sorry but the other commenter is correct. I've seen this first hand because with every new phone I've ever bought since even before smart phones were a thing I've always negotiated how much I paid up front for the phone vs the monthly contract and run the maths to see how much difference the contract would be. In every instance, even during my last upgrade which happened ~12 months ago, the amount I paid up front wasn't proportional to the amount my bill reduced by. For example, If I paid for £1000 phone up front the monthly contract would be £40. So if your argument was correct then that same contract should be £40 + (£500 / 24months) == £61. But it wouldn't be. It would be more like £75 a month. Sure that's only £10 a month more. But over 24 months that works out £240 extra. So that £500 ends up costing £740. These are just made up figures but they're roughly in the same ballpark as what I've experienced. On occasions when I've asked for a pen and paper so I can make a note of the differences over the contract term, the sales people have even literally said "So if you go on this contract, your phone will cost £x more". So I don't think it's even a fact they try and hide.
        joshstrange 4y ago
        Are you buying the phone through the carrier? God knows what scummy tactics they will use and it's not a fair comparison. You can buy the phone through Apple and only pay for the phone, no extra (unless you upgrade after only 1 year).
        hnlmorg 4y ago
        I can't speak for the US but in the UK they're transparent about the costs and thus you can compare their costs with that of buying directly from the Apple store. So there isn't really any room for trickery there. Even the contract you sign has to have terms explained by the sales person because that contract can be contested if the customer claims they were duped into signing something they didn't understand. We have a lot stricter consumer laws in Europe.
        nemothekid 4y ago
        If I go to Verizon.com right now and select iPhone 13 Pro Max I can get a base phone for $30.55/mo over 36 months. That is equal to 1099.8 which is the the same price (if not less) than the 1099.9 if I bought it out right. That $30.55 DOES NOT include the price of the contract, which costs an additional $85.00 for 5G Ultraband. I would have to pay $85 whether or not I bought a 0% interest phone, bought it at full retail or brought my own phone. So no, I don't see where the "double" is coming from. It's just math.
        hnlmorg 4y ago
        Given you're quoting dollars and I'm quoting sterling, I think it's safe to say we're all probably right for the territories we reside in.
        giobox 4y ago
        I mean that's kinda on you if you want to contract for cellular service + handset in this way, but even in the UK the cellular market has offered iPhones at 0% over two years with option to find cheapest rolling 30 day contract you can - the iPhone upgrade program is run in the UK under very similar terms to the US one, and is still sim free/0 percent. I've also seen the handset cost separated at 0% APR with separate service charge from major UK telcos too. > https://www.apple.com/uk/shop/iphone/iphone-upgrade-program https://www.apple.com/uk/shop/iphone/iphone-upgrade-program
    - csomar 4y ago
      You can buy an unlocked phone at 0% financing. (Apple's card or your bank card might offer it).
- tims33 4y ago
  Not if you use this option: https://www.apple.com/shop/iphone/iphone-upgrade-program https://www.apple.com/shop/iphone/iphone-upgrade-program
ribosometronome 4y ago
>which Apple gets paid up front for Wasn't Apple trying to do some of their own financing here?
- slt2021 4y ago
  a lot of people use Apple Card to finance (because of cash back) and apple card is underwritten by Barclays or GS bank if I remember correctly
  - hnbear 4y ago
    The current Apple Card, fully Applized and wallet integrated is in partnership GS. The old Apple-branded card was Barclays, but it was just a standard retail-type branded card. iPhone financing is CitizenOne, eg the iPhone For Life program, although you can also use Apple Card to purchase it.

people 0% finance phones for 2 years, which Apple gets paid up front for.

ratsmack 4y ago

It's the free phone tax, where you end up paying double the cost of the phone by the time the 2 year contract expires.

dangus 4y ago
Huh? You can finance phones directly from Apple completely separate from your phone plan. You can buy an iPhone and pop in a Mint Mobile SIM. There's no "free phone tax" if you buy it the right way.
nemothekid 4y ago
How do you pay double if the interest rate is 0%?
- rabuse 4y ago
  Contracts require monthly phone service, and all the other fees they tack on along with those charges.
  - nemothekid 4y ago
    Whether or not you buy an iPhone full retail, or at 0% interest, that monthly service fee is the same. Carriers haven't subsidized phones for years now. I think the GP is mistaken. There is no "free phone tax" is you pay monthly for your phone.
    - hnlmorg 4y ago
      Sorry but the other commenter is correct. I've seen this first hand because with every new phone I've ever bought since even before smart phones were a thing I've always negotiated how much I paid up front for the phone vs the monthly contract and run the maths to see how much difference the contract would be. In every instance, even during my last upgrade which happened ~12 months ago, the amount I paid up front wasn't proportional to the amount my bill reduced by. For example, If I paid for £1000 phone up front the monthly contract would be £40. So if your argument was correct then that same contract should be £40 + (£500 / 24months) == £61. But it wouldn't be. It would be more like £75 a month. Sure that's only £10 a month more. But over 24 months that works out £240 extra. So that £500 ends up costing £740. These are just made up figures but they're roughly in the same ballpark as what I've experienced. On occasions when I've asked for a pen and paper so I can make a note of the differences over the contract term, the sales people have even literally said "So if you go on this contract, your phone will cost £x more". So I don't think it's even a fact they try and hide.
      - joshstrange 4y ago
        Are you buying the phone through the carrier? God knows what scummy tactics they will use and it's not a fair comparison. You can buy the phone through Apple and only pay for the phone, no extra (unless you upgrade after only 1 year).
        hnlmorg 4y ago
        I can't speak for the US but in the UK they're transparent about the costs and thus you can compare their costs with that of buying directly from the Apple store. So there isn't really any room for trickery there. Even the contract you sign has to have terms explained by the sales person because that contract can be contested if the customer claims they were duped into signing something they didn't understand. We have a lot stricter consumer laws in Europe.
      - nemothekid 4y ago
        If I go to Verizon.com right now and select iPhone 13 Pro Max I can get a base phone for $30.55/mo over 36 months. That is equal to 1099.8 which is the the same price (if not less) than the 1099.9 if I bought it out right. That $30.55 DOES NOT include the price of the contract, which costs an additional $85.00 for 5G Ultraband. I would have to pay $85 whether or not I bought a 0% interest phone, bought it at full retail or brought my own phone. So no, I don't see where the "double" is coming from. It's just math.
        hnlmorg 4y ago
        Given you're quoting dollars and I'm quoting sterling, I think it's safe to say we're all probably right for the territories we reside in.
      - giobox 4y ago
        I mean that's kinda on you if you want to contract for cellular service + handset in this way, but even in the UK the cellular market has offered iPhones at 0% over two years with option to find cheapest rolling 30 day contract you can - the iPhone upgrade program is run in the UK under very similar terms to the US one, and is still sim free/0 percent. I've also seen the handset cost separated at 0% APR with separate service charge from major UK telcos too. > https://www.apple.com/uk/shop/iphone/iphone-upgrade-program https://www.apple.com/uk/shop/iphone/iphone-upgrade-program
  - csomar 4y ago
    You can buy an unlocked phone at 0% financing. (Apple's card or your bank card might offer it).
tims33 4y ago
Not if you use this option: https://www.apple.com/shop/iphone/iphone-upgrade-program https://www.apple.com/shop/iphone/iphone-upgrade-program

ribosometronome 4y ago

>which Apple gets paid up front for Wasn't Apple trying to do some of their own financing here?

slt2021 4y ago
a lot of people use Apple Card to finance (because of cash back) and apple card is underwritten by Barclays or GS bank if I remember correctly
- hnbear 4y ago
  The current Apple Card, fully Applized and wallet integrated is in partnership GS. The old Apple-branded card was Barclays, but it was just a standard retail-type branded card. iPhone financing is CitizenOne, eg the iPhone For Life program, although you can also use Apple Card to purchase it.