How To Get an iPhone Every Year for Free

Update: New Upgrade-Every-Year plans make this less likely to work. At&T is really pressing customers toward those plans, and away from the 2 year contracts.

Warning: This only works if you have two phones on your account and don’t care what kind of phone you have on the other number. It’s not truly free, because you are locked into a contract, but you can upgrade every year without spending extra money.

This is a pretty simple plan, which I have used and will use again, but some people may not realize it’s possible so I thought I would post it up. We are with AT&T, but this may work with Verizon as well. With the announcement of the iPhone 5S and 5C the other day, many people locked in a 2 year contract may be thinking of trying to upgrade early.

It’s nice to have the latest hardware from Apple. I like the iPhone and my apps. I want to take advantage of every new advance in capability. But I don’t want to pay $600 for an iPhone with no contract. What if I am only one year into my contract but I still want a new phone? I don’t even want to pay the early upgrade fee.

Here’s how I do it. My wife and I are on my AT&T account. AT&T allows people on the same account to switch phones for an $18 charge. So I could give her mine, and get hers for a whopping $36. Not something you want to do every day, but it’s a lot cheaper than $600.

She does not care what phone she has. That is a crucial part of this working out. If the person who uses the second phone on your account wants more than a basic handset, this will be more expensive.

Your goal is to get one of your numbers’s contracts ending one year, and then the next one ending the next year. So that every year you have one number up for a new contract. Once that happens the rest is easy.

To get this going you have to either pay full retail for a basic handset, or elect to keep the phone on your second number after the contract runs out. So, next time your second account is up for renewal, don’t do the contract. Either keep your phone or get a cheap one. Purchase a pay-as-you-go phone for your carrier. In the case of AT&T, that’s a Go Phone. The cheapest Go Phone costs about $15 at most stores. Nicer ones go up in price as you add features. You can easily get a phone for under $50.

For instance, this year my wife’s account is up for renewal. I will get the new iPhone on her account, and then swap it to my account. She will be in a new contract, but I won’t. I will be using the new hardware with only one year left on my contract. This will cost an additional $36.

Now, if it’s time for her to get a new phone as well I need to spend about $15 on to replace her cheap one. As long as the used market for iPhones remains high, this won’t cost me anything.

Using eBay (or something similar), you can fund this entire process where the end result is very little out of pocket. Currently a used 32GB iPhone 5 is selling for $400+ all day long.

So, after you have your account set to go, visit your local AT&T store. Purchase the new iPhone on your second number (the one up for renewal) with a contract and then have them switch the new iPhone to your primary number. This removes the old iPhone off your primary account and leaves the other basic handset on your second account. You could upgrade that phone if you wish during this process. With AT&T Go Phones, it’s as easy as swapping Sim Cards.

At this point you have paid $335 plus taxes and such if you get the 32GB 5S model. You now have the new iPhone on your phone number with about one year left on your contract and your second phone has a basic handset with two years left. Next year you can buy the new iPhone on your primary account. Add about $15 to the $335 of you replaced the base handset.

Then, wipe everything off your old iPhone. Make sure you go into the settings and use “Erase all Content and Settings” to make sure all of your personal information is gone. Then list your old iPhone on your favorite auction site. After your fees you will likely clear about $330-350. (Selling fees are ridiculous! 10% to eBay and then you pay Paypal another 3%. Then shipping and insurance.) If you decided to buy the new base phone, you probably broke even for a new iPhone. Not bad. If you didn’t replace the basic handset this time, you may end up with enough to buy a new case.

So that’s it. If you need help, the folks at the store can help you through it. The trick is to get your contract terms up for renewal on alternating years. And be OK with staying in a contract with your carrier.

A word about selling your iPhone: Be careful. I’ve used eBay to sell a lot of stuff. Nothing brings out the scammers like selling an iPhone. Follow eBay rules. Only ship to confirmed addresses, with tracking and insurance.

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