New vs. Used Smartphones

Buying New vs. Used Smartphones: What’s the Cheaper Option?

CRAIG LLOYD  @craig_lloyd 

Buying your smartphones used can save you a lot of money over buying new—or can it? We’ve done some math to see what the best route is as far as buying new vs. used smartphones.

There’s a decent argument for buying anything brand new (not just smartphones), and it’s that while you’ll spend more money up front for a brand new product, you’ll likely keep it forever (or at least as long as possible until it finally bites the dust). Because of that, you’ll ultimately spend less money than buying used (or inferior) products more frequently.

As an example, if you buy the latest and greatest phone right when it comes out and keep it for four years or so (a good amount of time most smartphones adequately last, we’d say), the argument is that it’ll be cheaper in the long run than buying a used one- or two-year-old phone twice during that same time period.

This is technically true for a lot of different products, especially items that are built to last a lifetime, but I wanted to see if it was true for smartphones. So I busted out the calculator and did some math.

Buying New or Used iPhones

Determining the cost of ownership for a brand new iPhone over the course of four years is pretty easy. All we have to do is take the price and divide it by four to get the average yearly cost. For this example, we’ll use the iPhone XR.

The iPhone XR costs $750 brand new. If you end up keeping that same phone for four years, the average yearly cost comes out to $187.50.

Now let’s say you want to buy a used iPhone, but since you’re buying used, it’s likely an older model, which theoretically won’t last you as long as a brand new model would. So let’s say you buy a used iPhone 8 (a one-year-old phone) for $490, which is about the average selling price on Swappa for the base model at the time of this writing.

Keeping the four-year lifespan factor in place, you’ll end up buying another used one-year-old iPhone three years later. We’ll say that’s another $490. So over the course of 12 years, you’ve spent $1,960 on used iPhones (compared to $2,250 on brand new iPhones over the same period), which comes out to $163.30 for the average yearly cost.

But let’s say that you want to buy even older used iPhones because you still can’t quite afford the $490 iPhone 8. Instead, you go for the two-year-old iPhone 7 with an average selling price of $310 on Swappa for the base model.

Since it’s an even older iPhone, though, you’ll have to buy a new, used iPhone even sooner, let’s say every two years. So over the course of 12 years, you’ve needed to buy six iPhones at $310 each, which comes out to $1,860 total, or $155 per year on average. Here’s a nifty chart that visualizes all of this:

Of course, all of this assumes that brand new iPhones will always cost $750, and used models will always cost $490 or $310, depending on how old they are, but these are good average numbers to go by.

In any case, the math has spoken for itself: If you’re okay not always having the latest and greatest iPhone, you’re technically better off, financially, buying older used models more frequently than just buying a brand new phone and keeping it for a long time.

However, the difference is pretty minimal. You’re only saving about $3 per month when you opt to buy two-year-old iPhones more frequently than just buying a brand new phone and keeping it for a long time. In other words, it doesn’t matter what you do if your goal is to save money—no option is significantly cheaper than the other, but at least be aware of the downfalls of buying used.

Buying New or Used Android Phones

With Android phones, the savings are significantly better if you go the used route, simply because the resale value for Android devices is fairly weak. I did the math to see the differences, both for Samsung Galaxy S phones and Google’s line of Pixel phones (arguably the two most popular lines of Android phones on the market).

Here’s what we came up with for Samsung Galaxy phones, using the Galaxy S9, Galaxy S8, and Galaxy S7, respectively, as well as using the same methodology and sources as the iPhones:

And here’s what it looks if you were all-in on Google’s line of Android phones, using the Pixel 3 (rumored to release next month and assuming a $650 price tag), Pixel 2, and the Pixel, respectively:

If You Plan on Longevity, Maybe Don’t Use Android

So here’s the problem with Android phones, though: Not only do they hardly hold their resale value compared to iPhones, but Android device manufacturers are quick to kick even slightly-older phones to the curb.

Because of that, buying a two-year-old Android phone is a riskier move than buying a two-year-old iPhone. If you bought a Galaxy S7 today, you could make it last two more years, but it would be extremely long in the tooth at that point, whereas an iPhone 6s today still performs pretty well, and it’ll probably still receive updates for at least another couple of years.

There’s no denying the savings, though, if you go with buying older used Android phones. But you’ll want to keep your expectations realistic as far as what you’ll get out of that device.