To get a new phone, you can buy an unlocked device from a retailer, finance through your carrier, or purchase a certified refurbished model. The best option depends on your budget and network preference. For example, buying unlocked often saves up to 30% over a two-year carrier plan.
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To get a new phone, you have three main paths: buy an unlocked device outright, finance through a carrier, or purchase a used or refurbished model. Each comes with different upfront costs, monthly commitments, and flexibility. According to the Consumer Expenditure Survey, the average household spends $1,200 annually on telephone services, so choosing the right method can significantly impact your budget. The FCC reports that 97% of Americans own a cell phone, and the average upgrade cycle is 2.7 years. Below, we break down each option so you can make an informed decision.
Buying Unlocked: Pros and Cons
An unlocked phone is not tied to any carrier and can be used with any compatible network. You buy it at full retail price—typically $800 to $1,200 for a premium model—but you own it immediately. This gives you the freedom to switch carriers, use prepaid plans, and avoid long-term contracts. The main drawback is the high upfront cost. However, industry data suggests that buying unlocked can save up to 30% over two years compared to carrier financing with interest. Budget providers often offer competitive prepaid plans that work well with unlocked devices.
Carrier Financing vs. Full Price
Major national carriers offer device payment plans that let you spread the cost over 24 to 36 months, often with $0 down for qualified buyers. Monthly payments range from $30 to $50 for flagship phones. While this lowers upfront cost, it typically locks you into a contract for that period. Switching carriers early may require paying off the remaining balance. In contrast, paying full price upfront avoids interest and gives you immediate ownership. According to the BLS Consumer Price Index, mobile phone prices have decreased by 12% since 2020, making outright purchase more accessible.
| Option | Upfront Cost | Monthly Cost | Contract Required | Flexibility |
|---|---|---|---|---|
| Unlocked (full price) | $800–$1,200 | $0 | No | High |
| Carrier financing | $0 (with installment) | $30–$50 | Yes (24–36 months) | Medium |
| Refurbished | $200–$600 | $0 | No | High |
Used and Refurbished Phones
Certified refurbished phones are pre-owned devices that have been inspected, repaired, and tested to work like new. They come with a warranty and cost 30% to 50% less than brand-new models. About 15% of consumers choose this route, according to industry surveys. Used phones from private sellers are cheaper but carry more risk. Always buy from a reputable source that offers a return policy and warranty. Refurbished phones are an excellent way to get a premium device without the premium price, especially if you pair it with a budget-friendly prepaid plan.
Tips for Getting the Best Deal
Follow these actionable tips to maximize savings:
- Check trade-in value: Many retailers and carriers offer trade-in credits for your old phone. Even a few-year-old device can knock $100–$300 off the price.
- Compare total cost of ownership: Factor in the phone price plus monthly service for 24 months. An unlocked phone with a budget prepaid plan often beats carrier financing.
- Look for deals from budget providers: Smaller carriers and prepaid brands frequently offer discounts on unlocked phones or bring-your-own-device incentives.
- Consider prepaid plans: Prepaid plans have no contract and can cost as low as $25 per month for unlimited talk and text with data caps, saving you hundreds per year.