Upgrading your iPhone every year is surprisingly affordable — if you’re willing to do some work

As I wrote yesterday, I’ve been saving to buy a new iPhone since last September. My iPhone 7 was the first phone that I didn’t buy under the legacy two-year contract model. Instead, I opted to pay full retail price so that I could easily resell the phone this year and buy a new one.

Here’s why: if you resell your old phones, an annual upgrade isn’t much more expensive than going “new every two.” Consider:

In other words, upgrading annually costs approximately $40 more per year than upgrading every two years. Considering how much I use my phone, $3–4 more per month doesn’t seem like an unreasonable premium.

Of course, there are some caveats (aren’t there always?):

• The equivalent carrier models of the iPhone cost the same, but they don’t all retain their value at the same rate. Your mileage may vary.
• Adopting this approach requires being willing to resell your phone yourself, which can be a hassle. Services like Gazelle make things easier, but they also offer far less than you’ll get selling to buyers directly through Swappa, eBay, or Craigslist.
• Reselling demands that you keep your phone in great shape; no one wants to buy a scratched or waterlogged phone. A rugged phone case and a screen protector are reasonable investments. Holding onto the retail packaging helps, too. Then again, these are smart moves whether you’re planning to resell at one year or at two.
• To calculate the resale values, I used the Swappa sale prices for equivalent baseline AT&T models. For example, for the first iPhone sale under the one-year upgrade cycle, I looked at the Swappa sales trends for the 32GB AT&T iPhone 7; the average selling price in August 2017 was $472. Subtract $15 (Swappa’s seller fee), plus another 10% for depreciation from August to September, and you get my $411 figure. I did similar math for the two-year upgrade cycle, using the iPhone 6s instead.[1]
• Both the carriers and Apple itself now offer upgrade plans. But there’s a catch: the companies require you to trade in your old phone to get the new one. That makes them significantly pricier than the approach outlined above (pay full price and sell it yourself). Plus, paying retail also means you can preorder on day one, without jumping through any hoops. Still, for those who can’t front the phone’s (hefty!) retail price or who don’t want to bother with reselling old devices, the official upgrade plans might be worth exploring.
• This plan doesn’t account for Apple making radical changes to its iPhone price structure—which, by all accounts, they’re going to do today. In my next post, I’m hoping to chew on this a little bit. ■

EDIT: I’ve labeled the chart with model numbers instead of dates.