Debating whether to buy an iPhone from Apple or your cell phone carrier? Here’s what you need to know.
By Courtney Lindwall, Melanie Pinola
Eager to get your hands on the new iPhone 16? Sure, you can buy one from just about any major electronics retailer, but because most stores offer the same models at roughly the same prices, it’s often simpler and more convenient to buy an iPhone directly from Apple or your carrier.
But shopping for a phone involves more than convenience and price. You also have to consider things like extended warranties, the cost and ease of screen replacement and other repairs, and the long-term commitments woven into some deals offered by carriers.
How do you decide which route is best? Here are some things to consider.
Pros of Buying an iPhone From Apple
Frequent upgrades: If you like having the latest iPhone in your pocket the week it’s launched, take a look at Apple’s iPhone Upgrade Program. It helps you get that new phone every year by trading in your current model and making 12 months’ worth of payments to cover the balance in price.
Tech support: Baked into the iPhone Upgrade Program is AppleCare+, which is one of the few extended-warranty programs recommended by Consumer Reports for certain consumers. That means if your phone gets damaged, you can take it straight to Apple to have it fixed or replaced as part of your plan.
The iPhone Upgrade Program starts at $40 per month, depending on the phone model you select. If you buy an iPhone 16 with 128 gigabytes of storage, for example, it costs $39.50 per month. If you use Apple’s no-interest financing for 24 months, the same phone costs $33.29 per month without AppleCare+. That $6.21-a-month difference in price may be worth it to you if you want a new phone every year, plus the benefits of extended coverage.
Both options are subject to approval: The iPhone Upgrade option is technically a loan from Citizens One (and therefore may affect your credit score), while Apple’s zero-interest financing is available only with the Apple Card credit card.
Low insurance cost: Although you have the option to purchase cell phone insurance through your service provider, plans like that usually have a higher price than AppleCare+ and offer fewer benefits. Adding theft and loss coverage to the AppleCare+ included in the iPhone Upgrade Program adds $2.92 per month. Meanwhile, AT&T and Verizon charge $17 per month for insurance and device protection, and at T-Mobile, it’s $18 per month.
Switching carriers at any time: If you buy an unlocked phone through Apple, you can switch cell phone providers at will, even if you haven’t yet paid off your phone. If you buy your phone through a carrier, you have to pay the full remaining balance before bolting.
Potentially higher trade-in value: Your current phone might be worth more when you trade it in at Apple vs. a carrier. An iPhone 13 in good shape, for example, has up to a $250 trade-in value at Apple. The carriers advertise up to $190, but to get the real figure, you have to use online tools that have grown increasingly complex in recent years. They now may ask for the model name, storage capacity, color, and current provider. This makes it harder to shop around. Some, but not all, Android phones are also available for trade-in at Apple.
Greater availability: The stockrooms in Apple Stores are flush with iPhones, so you have a better chance of finding the model you want in your choice of color and storage capacity. And, if not, you can have it shipped to you free. Depending on your location, you might even be able to get 2-hour delivery.
The Apple Store also has a wider range of accessories than most carrier stores.
Cons of Buying an iPhone From Apple
Potentially missing special discounts: Although the iPhone rarely goes on sale anywhere, carriers often offer limited-time promotions if you trade in an old phone, add a new line, or switch to their service.
AT&T, T-Mobile, and Verizon, for example, are currently offering as much as $1,000 off the cost of iPhone 16 models for new and existing customers. For all three carriers, the discount comes in the form of bill credits spread across 24 months (T-Mobile) or 36 months (AT&T and Verizon). To get the maximum discount, you need to subscribe to the carriers’ advanced tiers, such as Verizon’s Ultimate Unlimited and T-Mobile’s Go5G Plus or Go5G Next. Apple’s website highlights some special deals from these carriers but not all of them, so it’s worth checking with your carrier before ordering your iPhone.
Shorter financing term: Apple’s no-interest financing is spread over 24 months, so your monthly payment might be slightly higher than with carriers that have longer financing terms. AT&T and Verizon both spread it across 36 months instead. The total retail price will be about the same regardless of where you buy, but a longer term can be a bit easier on your wallet from month to month.
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Consumer Reports is an independent, nonprofit organization that works side by side with consumers to create a fairer, safer, and healthier world. CR does not endorse products or services, and does not accept advertising. Copyright © 2024, Consumer Reports, Inc.
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