Why lease mobile phones?

Smartphones make everyday life easier on many levels. Whether you want to log in to online banking, get directions when taking a road trip, or check the weather, you can do it all with a smartphone. Leasing cell phones works a lot like leasing your car. You get the phone at a cheaper rate upfront, but at the end of a two year contract, you have to bring it back to the carrier in ‘good working condition’. You could then go on to lease the latest device again and the cycle repeats.

If you would rather keep your phone, you also have the option to pay the difference between the regular price of the phone and the discounted price you received up front, and keep the device.

Leasing a smartphone may seem like a more attractive option than buying one, if you would like to have the latest model without the high price tag.

KEY TAKEAWAYS
Premium smartphone models can easily sell for $1,000 or more on average.
Leasing a smartphone offers the benefit of being able to upgrade to the latest models regularly without incurring contract fees.
Keeping a smartphone at the end of a lease term may require paying a buyout fee to purchase it.
Leasing could save money over buying new phones, but it doesn’t convey ownership, similar to leasing a car or an apartment.
What Is Smartphone Leasing?
Leasing a smartphone is similar to leasing a car or an apartment. You sign a lease with a smartphone-leasing company, which gives you the right to use the smartphone for a set period of time. In return, you make lease payments.

It’s important to note that leasing is not the same as buying a phone on an installment plan, which many cellphone networks also offer as an option for making smartphones more affordable. Spectrum, for example, allows you to pay in 24 monthly installments, after which you own the phone outright.

When you lease, you generally need to make one initial payment up front, followed by weekly, biweekly, or monthly payments. The length of the lease term can vary from one provider to the next. T-Mobile, for example, offers 18-month smartphone leasing.

At the end of the lease term, you have the option to:

Return the phone and lease a different one.
Sign a new Lease Mobile Phone for the same smartphone.
Purchase the smartphone that you’ve been leasing.
You also may be able to lease accessories for the phone, such as Bluetooth earpieces or car chargers. Anything you pay toward the lease covers only the physical use of the phone; you need to pay for cellphone service separately.

Smartphone leasing may or may not require a credit check, depending on the company from which you’re getting the phone. This could make it a good option for people who don’t have sufficient credit to purchase a regular contract phone.