Author Topic: Buying out cell phone contract to switch to cheaper one  (Read 656 times)

VENCEDOR7

  • 5 O'Clock Shadow
  • *
  • Posts: 1
Buying out cell phone contract to switch to cheaper one
« on: November 27, 2017, 07:13:52 PM »
I would not be surprised if a similar question has already been asked, but I did research prior to posting with no avail. I would appreciate input from seasoned Mustachians as I've just come to discover the existence of facial hair myself.

I have 2 cell phones (LG G4s) currently under contract with Virgin Mobile (Ottawa, ON, Canada) with another year or so left which translates to $340 per line owing on the phones. Our currently monthly total is $135.40 for mediocre plans. I know someone who works at Freedom Mobile who can get us a much better plan for a combined total of $70 per month. Another thing to consider is both phones need to be unlocked which can be done for $15 a piece on Canadaunlocking.com. I am aware that unlocking becomes free by carriers on December 1st, but the code for the cheaper plan at Freedom is only valid until November 30th...convenient I know. So would it be worthwhile to spend a totat of $670 in order to obtain the cheaper monthly rate? I figure it will take 11 months ($670/65) to recoup the initial "investment", and assuming we can keep the same rate beyond that it will pay off in the long run. Might have to replace the batteries, but the 3 gigs of ram should be more than enough to keep us going for a few years.

Appreciate any input

Daley

  • Magnum Stache
  • ******
  • Posts: 3936
  • Location: Cow country. Moo.
  • Got that mustache feeling.
Re: Buying out cell phone contract to switch to cheaper one
« Reply #1 on: November 27, 2017, 11:11:09 PM »
Here's a tool I specifically created to run these sorts of numbers for you, linked from the trusty and rusty (and thread stickied) superguide.

Run the specific cost of both, and go with the one that gives you a faster ROI. Given you don't include the off-discount plan prices, I can't answer with authority... but given the equipment price difference between November 30th and December 1st is only an extra $30 (plus any reduction in remaining contract obligation, if any) and given you already know that the pre-11/30 cost will break even in eleven months? Unless the discount disappears after 12 months or the difference between pre and post discount is under one-two dollars a month (which is doubtful)... I think you already know the answer to this one.

cchrissyy

  • Pencil Stache
  • ****
  • Posts: 718
  • Location: SF Bay Area
Re: Buying out cell phone contract to switch to cheaper one
« Reply #2 on: November 27, 2017, 11:11:11 PM »
have you asked the new company about any incentives to switch?  in my area, the big carriers often offer to pay your early termination fees for you.  I have a friend who does this at least once a year, moving from one big carrier to another and another. each time, the new carrier gives their best prices AND pays all the costs of breaking the old contract. (i think by giving credit on upcoming bills not by directly paying the old carrier. but still!)