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iPhone 6: AT&T Next vs AT&T 2-Year Contract Price

Buying an iPhone 6 with an AT&T Next plan is one way to get an iPhone 6 without spending $199 or more up front. As of right now, with rare exceptions, there’s simply no reason for those buying an iPhone 6 to sign a traditional two-year contract and pay $199 up front. Instead, they should find the AT&T Next program that best suits their needs.

AT&T and other wireless carriers traditionally subsidize the full cost of new iPhones. The $199 starting price that Apple typically advertises includes a $450 subsidy that the carriers pay directly to Apple. Of course AT&T isn’t discounting iPhones to do you a favor, the carrier simply builds that subsidy into the required two-year contract. Carriers have spent the past couple of years shifting away from this model and are encouraging customers to pay full price for their iPhones in exchange for lower monthly service rates.

Visit ATT.com to See Exact Calculations, Terms and Additional Details

iphone 6 plus goldOf course most wireless customers would balk at paying $649 plus tax for a new iPhone 6. To help iPhone buyers get around the sticker shock, AT&T offers interest-free financing through a program called AT&T Next. The program allows iPhone 6 buyers to acquire a new iPhone 6 by just paying tax up front and making installment payments on the purchase price of the iPhone 6 over 20 or 24 months.  If a customer wants to get the next iPhone early they can simply pay off the balance or trade in their iPhone 6 for the iPhone 7, or whatever Apple’s going to call it. AT&T Next 12 customers pay slightly more than AT&T Next 18 customers for the privilege of being able to trade in their phones once per year rather than once every 18 months.

The biggest difference between AT&T Next and a two-year contract is not the upfront cost of the iPhone 6 however. The biggest difference is that you are not married to AT&T service for two years. This is important to some people, especially those that move often or aren’t sure if they’ll have the funds to continue paying for expensive wireless service long term. While AT&T Next customers are on a contract for paying off the value of a device, they can leave any time by paying off the balance they owe on the cost of the device. This is similar to paying an Early Termination Fee (ETF) on a two-year contract, but there are a lot of people that complain about expensive ETF fees.

Another huge difference between AT&T Next and two-year AT&T contracts is that AT&T customers can get substantial discounts on data plans. AT&T customers get $25 per month on Mobile Share Value plans per line, so long as they’re signed up for 10GB per month or more. Those on AT&T Next plans that are under 10GB per month save $15 per line per month.  How much money AT&T Next saves you really depends on your family’s situation, including how much data is used each much.

Thankfully, AT&T’s put together a handy chart to help explain it all. For a device that has an advertised price of $199, such as the 16GB iPhone 6, the customer actually has four options. The iPhone 6 can be bought outright for $649, purchased for $199 with a two-year contract, purchased with an AT&T Next 12 contract or purchased with an AT&T Next 18 contract.Paying full price for a device is for people that don’t need to stretch their budgets and those who may not pass AT&T’s credit check. If you pay $649 upfront however, you won’t be eligible for the $25 or $10 per month AT&T Next monthly service credits.

Screenshot 2014-09-16 15.39.41

The chart above illustrates the total cost of 16GB iPhone 6 ownership over the first year for those on a 10GB or higher Mobile Share Value plan.  The amount within the dark blue background is the cost of the device and the amount in the lighter blue is the cost of the wireless service.  The AT&T Next 12 plan hardware costs include 12 installment payments of $32.50, while the AT&T Next 18 bar includes 12 payments of $27.09 each.  The AT&T Next 12 Plan is $149.99 cheaper than going with a two-year contract over the first year. Buying an iPhone 6 on the AT&T Next 18 plan is $199 cheaper over two years compared to buying the device on a two-year contract.  Keep in mind that all of the prices above exclude sales tax.

iPhone 6 Total Cost on AT&T Over 2 Years w/ 10+GB Mobile Share Value Plan

  • AT&T Next 12: $3,540
  • AT&T Next 18: $3,410
  • 2-Year Contract: $3560

Right now AT&T is offering a $100 statement credit with the purchase of an iPhone 6  on an AT&T Next plan. That means you can save up to $300 by going with a Next plan over the next two years rather than going the old-fashioned contract route.

 

AT&T Next 2GB

But before you rush off and sign up for AT&T Next, keep in mind that the numbers change if your family doesn’t use a lot of data. Those on a 2GB plan for example don’t see the same kinds of savings since AT&T drops the credit down from $25 per month to $15 per month. Above is a chart illustrating the costs of each plan over the first year. As you can see, things are a lot closer. In the 10GB chart there’s a $214 gap between the AT&T Next 18 and 2-year Contract total cost of ownership for the first year. In the 2GB chart the gap narrows to just $95.

iPhone 6 Total Cost on AT&T Over 2 Years w/ Mobile Share Value Plan LESS than 10GB

  • AT&T Next 12: $1,950
  • AT&T Next 18: $1,885
  • 2-Year Contract: $2,160

The AT&T Next 12 plan is $210 cheaper than the two-year contract if you end up keeping the iPhone 6 for two years. The AT&T Next 18 plan is $275 cheaper compared to the two-year contract price over two years if you keep the iPhone 6 for the entire period.

So who shouldn’t switch to AT&T Next? Those on grandfathered AT&T contracts should tread carefully. AT&T’s tried to get people off of those plans for years and the savings may not offset having to count bits and bytes as you stream content.  You should also avoid the AT&T Next Plan if you don’t plan on taking good care of your iPhone 6. AT&T requires trade-ins to be in good condition.

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17 Comments

  1. Bob Bergen

    09/17/2014 at 12:01 pm

    Your math is incorrect for the Mobile Share Value Plan with less than 2GB of data. The AT&T Next plans are actually MORE expensive than a 2-year contract. When you calculated the costs of the 2-year period, you neglected to include the monthly phone payments which are part of the AT&T Next plan.

    The correct numbers are as follows:
    2-year contract: $2,160
    Next 18: $2,210
    Next 12: $2,340

    Reply

  2. Travis

    09/18/2014 at 11:25 am

    The math is also wrong for the total cost over 2 years w/10+GB. In the second year, you only have 8 remaining payments on the AT&T Next 12 plan (20 payments total), so the second year is $260 + $1380. It’s the same 2-year total for Next 12 or Next 18 because the total phone payments are the same.

    AT&T Next 12: $3410
    AT&T Next 18: $3410
    2-yr Contract: $3600

    Reply

  3. Brandobean

    09/20/2014 at 5:24 pm

    Not sure why carrier make this stuff so complicated. So much that the author didn’t even get the math right (according to the two commenters before me). I’m currently out of contract and deciding where to go with my girlfriend… Verizon, t-mobile, or AT&T. We want at least 4gb each (shes giving up a grandfathered AT&T unlimited plan) and to save money on new iPhone 6 plusses. So Confusing!

    Reply

  4. Chris44

    09/22/2014 at 6:51 pm

    If you account for the credit/dollars you will get for trading/selling your phone at the end of the 2 year plan they are all pretty much the same.

    Reply

  5. Jeff

    09/26/2014 at 8:51 pm

    Actually if you’re buy the phone outright you receive the same monthly rates as the Next plan. You get either $15 or $25 off the normal $40

    Reply

  6. Victoria

    11/25/2014 at 12:58 pm

    Actually we are not allowed to sell the iPhones off contract(outright). It’s completely illegal within contract.

    Reply

  7. Christina

    12/10/2014 at 11:06 pm

    Actually the next installment calculations assumes you will receive place the phone on another next plan. At least with the 2year contract you own the phone and you can do as you choose at the end of the 2 year contract. I am not convinced the next plan is better at the end.

    Reply

  8. Chris

    12/17/2014 at 8:27 am

    I’m actually only posting because everyone keeps starting their comments with “Actually” to prove they are correcting someone else on the interweb.

    Reply

  9. Dewang

    12/21/2014 at 7:31 am

    I think Next is like you are Next for a ripoff. LOL

    Reply

  10. Veronica

    12/26/2014 at 1:04 pm

    I like using a cell phone, but remember when home phones costed us 40.00 a month..and we didnt have cell phone bills that cost 200.00 for 4 people to text, web..and who talks on phones anymore? We should start all over and end the cell phone craze.

    Reply

    • Jimmy Bob

      07/21/2015 at 6:06 pm

      Cell phones are trash. I use them CB radio’s. Them CB radios are some fine pieces of technology!

      Reply

  11. miles

    08/10/2015 at 10:46 pm

    It seems to me that the supposed benefit of the Next plan versus a 2 year contract do not exceed the price reduction of an iPhone purchased on a contract. Based on an iPhone 6 (64 gb) the price is $450 less than the same phone purchased under the installment plan. The difference of service plans over two years does not make the no contract, at least in the case of an individual plan, cheaper than a 2 year contract. The example posted on the ATT website shows for 3gb of data Next would be $65 per/mo vs $80 for a 2 year contract. That’s a difference of $15 per month. 24 months times $15 would be $360. You would receive a $450 reduction with the purchase of a new phone so, you would save $90 by going with a contract. You will have more flexibility going no contract but, you are going to pay more for it over time because you pay the full price of the phone over time.

    Reply

  12. rox

    08/22/2015 at 11:45 am

    I know that AT and T will do nothing about this as they don’t care and are too big to care. I have been with ATT / cingular since 1995. Just google the word ATT ripoff and see all that pops up.

    I am eligible for an upgrade for 3 family plan phones. I chose the 2 year contract and was shown an absolutely free phone (note 4) online. Then I was told that by upgrading I would lose my $75.00 total credit per month. So in 2 years using the next plan, I would lose a total of 1800.00 or 600.00 for each FREE phone. They want everyone to be on the next plan as this is how they make money but what they say is that some people don’t like contracts. (I do)

    I was told by sales online that if I pay 1958.00 and buy the phones outright I would keep my credit of 75.00 per month (this is paying 150.00 more???? than with the next plan).

    This system is not much different than all the money being made by car dealers with 7 year car loans.

    AT and T does not learn its lesson well. They had roll over, took it away, then years later brought it back. They had unlimited data, made us buy blocks of data, and now are giving huge date packages for little money. So eventually AT and T will go back to giving a choice of contract or no contract which it does not have at the moment essentially.

    Are Americans really this stupid? I think so if they fall for the next plan without doing homework..

    Reply

    • Xavier Lanier

      08/22/2015 at 12:15 pm

      What is your $75 credit from? Was it a promise, employee discount or something else ?

      Reply

      • rox

        08/22/2015 at 12:27 pm

        I beleive last year or the year before, ATT was giving either a 15 or 25 dollar credit per month to those people who upgraded their data plan depending on what plan you got. I upgraded from 10 gigs to 20 gigs and was given a 25.00 credit per phone per month. That is 75.00 per month. This credit has been confirmed on several web sites. The employee at the store showed me the credit on my bill when trying to explain the next plan to me.

        Reply

  13. David

    08/31/2015 at 8:11 am

    2 year contract
    200 for phone
    45 upgrade fee
    15 extra for 2 gb data a month
    50 for taxes
    Total 655 u own phone but stuck in contract with possible early termination fee

    Next 24
    15 upgrade fee
    50 for taxes paid upfront
    25 a month added to bill
    Total 665 u DONT own phone but can upgrade
    Pay 30 month total to own phone at 815

    Side note the next program is interest fee so att doesn’t make money off phone itself

    Reply

  14. Ramon

    09/28/2015 at 4:42 pm

    I almost got An iPhone 6s Plus and iPhone 6s on att next but I change my mind when they was charging me $105 of taxes and fee. I though I pay nothing for what it looks like they would end up charging me taxes twice for the same phone

    Reply

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