If you’re part of 91% of Americans, you have a cell phone plan. If you’re one of the normal ones, you probably wish it were cheaper. You probably also wish that the new awesome smartphones didn’t cost so much. Wanna know how to get all the hotness for ridiculously cheap?
Phones these days are priced relatively competitively. Most smartphones sell for about $500 MSRP – when you don’t sign up for a contract. You buy the phone, you activate it, and if you want to turn it off at any time, you do.
Where the wireless companies make their money though, is in the contracts. If you sign up for a 1 or 2-year contract, they will subsidize the price of the phone. If you take a look at the HTC Sensation 4G above, you’ll see it costs $549.99 MSRP, and $199.99 with a 2-year contract.
Why Hate the Contract?
A lot of people are extremely opposed to contracts. They don’t want to be locked in. They might even favor pre-paid plans over contract plans. This post is not about pre-paid plans. If you want to save money with a pre-paid plan, that’s awesome, but this post is about getting a great deal on a smartphone and service. (You are extremely limited when trying to get pre-paid service with a nice smartphone.)
Contracts can be used to your advantage. If you’re going to sign 2 years of your wireless communications away to a company, you are in just the right place to bargain with them. More on that soon…
So, phone prices?
Generally, you’ll be paying between $149-$199 for a phone on-contract, when there aren’t any special deals running (and when you aren’t working hard enough). This post is not about buying phones for MSRP, so we won’t discuss that further.
We’ll use T-Mobile’s “Family” plans for comparison, since I’m currently on a family plan, and it’s easiest for me to compare. These prices are based on a 2-phone account. So, basically, the cheapest plan you can get is about $60 per phone, before taxes, insurance, and other random fees.
Now keep in mind, that $60 per phone is for only 200mb of data. If you use your phone for pretty much anything other than email and calling, you’re going to go over 200mb of data per month. I currently have 5GB of data per Android phone on my plan, and I get right up to the cap each month.
Realistically, you could get away with using only 2GB of data per phone, and hooking up to WiFi, whenever possible. If that’s the case, you’ll be paying $139.98 per month, plus taxes, fees, and other BS.
My Phone Prices
If cell phone companies are allowed to keep you paying them exorbitant monthly prices, you shouldn’t have to pay a single penny for your smartphone.
Look, folks, it’s 2011. People simply shouldn’t be paying for phones any more, when they’re going to be locked into a 2-year contract.
How Did I Get My Phones For Free?
I run The Rich Life, and that means I’m always on the lookout for deals. I find deals even when I don’t need them. You can get a new smartphone for free, and you don’t have to spend as much time monitoring deals as I do.
When T-Mobile introduces brand new smartphones, they’ll often offer them up for free as retention offers. That means that when someone calls in to cancel their account, T-Mobile will (sometimes) offer them the newest, hottest smartphone – for free. This often coincides with T-Mobile’s offering the phone for free to new customers. If new customers are getting it for free, you better believe a potential canceled customer will get it for free.
You have the most power to get a deal when you’re out of contract.
Even if you’re not out of contract, that’s okay! If you are at least a year into your 2-year contract, you still have a good bit of bargaining power. However, you have the best chance when you are out of contract.
When my 2-year contract for my HTC G1 expired, I checked T-Mobile’s deals daily for free smartphone offers. As soon as I saw the G2 being offered for free to new customers, I called T-Mobile’s retentions department and asked for the same deal, in return for renewing my contract. This is how I did it:
Hi! My contract is expired, and I’m thinking of switching to Verizon for one of their awesome Android phones. I see you’re offering new customers a free G2 – can you match that offer for me, to keep my business?
If they say no, I bring up the fact that I’ve been a loyal customer for X years, and that I love T-Mobile, but I might just have to switch to Verizon. If that specific representative won’t budge, I hang up and call back again. Someone always budges. They want to keep me (and you) as a customer.
What About the Second Free G2?
Right before my wife and I got married, I knew I’d want to add her on to my plan. T-Mobile offered another smashing G2 deal – “Add a line with a G2, and get the G2 free!” I called in just a week after I got my free G2. They said, “Sir, we just gave you a free phone, we can’t give you two.”
I told them that I was still within my 15-day grace period, and I could always switch to Verizon. They then gave me the second free G2. That’s about $900-$1000 worth of hardware for FREE. Ruminate on that a bit.
My Plan Prices
Once I got the free Android phones, it was time to get a slamming plan. Before I go into my plan details and you say, “But I have to text message!” let me show you my alternative:
Google Voice allows me to text any cell phone number (in the US?) for free. It gives me visual voicemail – for free. The cost of the service is – free. Because I use Google Voice, I don’t need SMS service or Visual Voicemail. I can also make free calls through Gmail and route incoming calls to Gmail, so I don’t need lots of minutes.
My wife does use SMS messaging, so I need it for her line, but she doesn’t use a large amount of minutes either. Here’s the breakdown of our plan:
- 600 minutes (with nights&weekends and Fave5) – $49.99
- Unlimited SMS (for my wife’s line) – $9.99
- Unlimited Data (capped at 5GB per line) – $20 x 2 = $40
I also have a 15% Volume Discount (check with your company to see if they offer one). We don’t use Asurion (T-Mobiles suggested insurance provider) because the smartphones are covered under our USAA Renter’s Insurance policy. Our total bill after taxes, fees, and BS comes out to about $102 per month.
How Did I Get The Bill So Low?
Once again, I kept my eyes open for deals on plan services. The standard price for 5GB of mobile data (per line) is currently $30 per month. I pay $20 per month for each line. I simply heard about the cheaper data plan and called in and asked for it.
Sometimes it’s not just as simple as calling in and asking for it. You have to work for it. I work for it every single time. When they don’t seem to want to give me what I want, I play dumb and literally repeat my request over and over again. As Andy Bernard would say:
Every success I’ve had at my job or with the lady-folk has come from my ability to slowly and painfully wear someone down.
That’s the secret. That is how you negotiate your cell phone bill down.
It’s Your Turn
I save approximately $60 per month with these techniques. Over 2 years, that comes out to $1440. That’s a whole lotta green. Imagine what you could do with that money. Travel? Buy a better razor? The possibilities are endless.
This article used T-Mobile as an example, but I’ve had my way with Sprint as well, and the others work just the same. If you’re not with T-Mobile, I highly suggest them for their low prices, AWESOME data speeds, and great customer service. Regardless of your carrier, go out and save some freaking money on your cell phone bill.
This article took a lot of effort to create, and it can potentially save you a LOT of money. If you found any part of it helpful, please consider hitting the “Donate” button below, to help me create more awesome articles like this.
(If you donate, I’ll also give you a free download code for my craigslist book.)