Originally Posted by tatergator1
This whole debate is the result of the ubiquity of credit and the "monthly payment" mentality held by so many people. I think my biggest pet peeve on this topic is cell phones. How many people would own an iPhone or other smart phone if the cellular companies did not subsidize the cost.
Option #1: $99 for the new iPhone 5c with 2-yr agreement....sign me up.
Option #2: $549 for the new iPhone 5c without a contract.....I can't afford that!
Yet, people fail to realize they'll simply be paying a monthly cellular service bill that is about $20 more than it would have to be otherwise. If you don't upgrade that phone right after the 2 years is up, your just throwing that $20 away on your monthly cellular bill.
I would rather have the option of a full price phone with no contract and reduced monthly rates and keep that smart phone for 3 years and save money in the long run.
At least Tivo affords me that opportunity with Lifetime.
Regarding Cell phones. I have what you describe above for my iPhone 5 through StraightTalk (prepaid service at Walmart). StraightTalk resells Verizon service, so I get the same great coverage Verizon offers in my area. My iPhone 5 cost $550 from StraightTalk, but I have no contract and only pay $45 per month for unlimited talk/data/text. Breakeven is about one year, compared to buying the $199 iPhone at Verizon and paying $75 a month for service. And in this model, it's to my benefit to hang on to my iPhone as long as it works, rather than feeling obliged to upgrade ever two years. The longer my phone works, the better.