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Buying New or Used Smartphones: Which is the Cheaper Option?

Buying a used smartphone saves you a lot of money compared to buying a new smartphone - or do you? We did some calculations to figure out the best way to buy new and used smartphones.

CONNECTED:The best way to save money on technology: Buy used

There's a decent argument for buying something brand new (not just for smartphones) and the fact is that while you may be spending more money upfront on a brand new product, you'll likely keep it forever (or at least as long as possible, until) it bites the dust). Because of this, you end up spending less money than buying frequently used (or substandard) products.

For example, if you buy the latest and greatest, the argument is that it will be cheaper than buying a used smartphone in the long run. or two year old phone twice in the same period.

This technically goes for a lot of other products, especially products that last a lifetime, but I wanted to see if this was the case for smartphones. So I broke the calculator and did a little math.

Buying new or used iPhones

Determining the cost of running a brand new product iPhone over the course of four years is pretty straightforward. All we have to do is take the price and divide by four to get the average annual cost. In this example we are using the iPhone XR.

The iPhone XR costs $ 750 brand new. If you keep the same phone for four years, the average annual cost is $ 187.50.

For example, suppose you want to buy a used iPhone, but since you're buying a used model, it's likely an older model that, in theory, won't last as long as a brand new model. So let's say you buy a used iPhone 8 (a year-long phone) for $ 490, which is roughly the average Swappa retail price for the base model at the time of writing.

Keeping the four-year lifespan, you will buy a used one-year iPhone three years later. We'll say that's another $ 490. Over the course of 12 years, you've spent $ 1,960 on used iPhones (compared to $ 2,250 on brand new iPhones in the same period). This equates to $ 163.30 for the average annual cost.

For example, let's say you want older iPhones for shopping because you still can't afford the $ 490 iPhone 8. Instead, opt for the two-year-old iPhone 7 with an average retail price of $ 310 for Swappa as the base model.

However, since this is an even older iPhone, you'll need to buy a new, used iPhone sooner, say every two years. So over the course of 12 years, you had to buy six iPhones for $ 310 each, which equates to a total of $ 1,860, or an average of $ 155 per year. Here is a neat graphic that illustrates all of this:

All of this, of course, assumes that brand new iPhones are always $ 750 and used models are always $ 490 or $ 310, depending on how old they are, but these are good averages.

Either way, the math has spoken for itself: If you don't mind not always having the latest and greatest iPhone, technically you will be better off financially buying older, used models more often than just buying a brand new phone and keep it for long periods of time.

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However, the difference is quite small. You'll only save about $ 3 a month If you decide to buy two year old iPhones for more often 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 you're looking to save money - neither option is significantly cheaper than the other, but you should at least be aware of the cons of buying it.

Buying new or used Android phones

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

We came up with the following methods and sources for Samsung Galaxy phones with Galaxy S9, Galaxy S8 and Galaxy S7:

And here's what it looks like if you're all-in on Google's Android phones and you're using the Pixel 3 (supposedly for release next month and priced at $ 650), Pixel 2, and Pixel 2, respectively :

If you are planning on longevity, you might not be using Android

So here's the problem with Android cell phones: Not only do they barely keep their resale value compared to iPhones, the manufacturers of Android devices also quickly throw older cell phones behind the wheel.

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Because of this, buying a two year old Android phone is riskier than buying a two year old iPhone. If you bought a Galaxy S7 today, you could make it take another two years, but it would be extremely long going on at this point, while an iPhone 6s still works reasonably well today and is likely to receive updates for at least a few more years.

However, the savings cannot be denied when you buy older used Android phones. But you want to keep your expectations as realistic as possible.