How does upgrading every year with AT&T Next work?

Next Question, can I pre-order the X via Apple's website or does it have to be done through AT&T's?

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@alpinewhite wrote:

Essentially we're paying to rent/lease phones during the period of use. Same concept as my car or any other lease program. With the difference that there is the option to own the device if all payments made (i.e. all 24 or 30 payments) vs. traditional lease programs where one must pay an additional buyout fee when all lease payments have been made.

 

It might "feel" like a lease and it's an easy way to explain it, but it's not.

You own that phone when you do Next. You owe the creditor for the loan (to buy the phone), they give you a no-interest loan with strings (must have service, phone is locked).

If you leave AT&T they don't want their phone back (because it's NOT their phone), they want the money.

With next, when you get far enough done with the payments, they basically buy it from you for the remaining payments (a benefit unless you fell it's worth more).

@alpinewhite While your description is quite accurate and Next may very well be like a lease, the fact is it is not a lease. Completing the payments to own the phone is not an option. You own the phone the day you receive it. You are fully expected to complete paying for it. Exercising the trade in option is just one way of completing payment by using the predetermined value of the phone for the final 6 or 12 payments. The differences may be subtle but still not a lease.

You own that phone when you do Next. You owe the creditor for the phone, they give you a no-interest loan with strings (must have service, phone is locked).

 

If you leave AT&T they don't want their phone back (it's NOT their phone), they want the money.

@Gary L don't know if you've ever leased a vehicle but what you describe is identical to a vehicle lease.

You owe the creditor for the payments on the vehicle and sign a contract of liability. I'd have to read the fine print on AT&Ts Next program but would be surprised if they hand you a $700 phone with zero strings attached. 

if you 'leave' the dealership that sold the lease, they will attempt first to collect their liability (they want the $$ not the car they offloaded to you in the first place); if this fails they reposes the vehicle.

With next, when you get far enough done with the payments, they basically buy it from you for the remaining payments (a benefit unless you fell it's worth more).

Same with vehicle lease: when you've completed 24, 36 months 48 months etc worth of payments, they will take the car unless you feel its worth the buyout price. 

Semantics but all this to understand a scenario in which paying for Next is better than just buying an unlocked phone at retail? This coming from someone who has been on Next for over two years and who also made the foolish move to swap 2 x iPhone 6s that were almost all paid off for 2 x iPhone 7 Plus. 

Sprint does leases, another word for it is RENT.   Reading how it works shows the difference in lease, vs installment purchase.

In a standard device financing agreement, a customer will pay off their new phone or tablet in monthly installments – usually over 24 months – instead of buying it at full price outright. After the full term of payments has been made, the device is yours to keep, sell, or trade in for a new handset.

Sprint’s leasing option is a little different. You’ll still make a set monthly payment for your device, but only over an 18-month period, and you’re not paying off your phone or tablet in order to own it.

Instead, you’re merely leasing the device from Sprint, and the carrier will still technically ‘own’ the gadget you’re using. At the end of the leasing period, Sprint will still own the device; if you want to keep it for yourself, you can pay an additional amount in order to purchase it (usually between $150 - $200, but can be much more). 

Otherwise, you can hand the phone back to Sprint in good condition and either upgrade to a brand-new handset, or cancel your service entirely. Either way, you won’t get to keep the device you’ve been using for the past 18 months.

If you want to keep using your leased device but don’t want to commit to buying it from Sprint, your final option is to continue to lease it on a month-to-month basis.

@lizdance40  lease vs. installment purchase; the latter also more commonly referred to as financing whereby one enters into an agreement to make a certain amount of installment payments to slowly chip away at the total purchase/sale price. Delayed ownership.

Leasing (or renting as you mention it) are practices AT&T, Sprint and many other carriers now cater to keep up with changing technology and respective hardware. What you describe above for Sprint is followed by AT&T and others. 

The question is how much do you save if you purchase retail, sell the used device after 1YR on the grey market, and purchase new at retail again? Quick back of the envelop math shows its south of $200 per device. 

@sandblast very well. Out of curiosity, do you subscribe to Next?