Verizon Eliminates Two-Year Contracts for Smartphone Upgrades

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Starting today, Verizon will no longer be allowing customers who are upgrading their smartphones to purchase a two-year contract, effectively eliminating two-year contracts for all new and existing users.

While Verizon did away with two-year contracts for new customers back in August of 2015, existing customers were able to re-purchase two-year contracts when upgrading their smartphones. That option is no longer available, and customers will be transitioned to device payment plans as their contracts expire.

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Two-year contract upgrade options are no longer available at Verizon stores and have been eliminated at partner stores, including Apple retail stores.

Customers who are currently on a two-year contract will need to purchase a phone outright or choose a device payment plan when their contracts expire and they need to upgrade their phones. A device upgrade fee will be required as well.

Verizon device payment plans for the iPhone 7 start at $27.08 per month, while plans for the iPhone 7 Plus start at $32.08 per month. Verizon offers a range of data plans, from 2GB for $35 per month to 24GB for $110 per month, with a $20 access fee for smartphones.

Verizon's move to fully eliminate two-year contracts comes on the heels of T-Mobile's "Un-carrier Next" announcement, which will see T-Mobile offering a single $70 per month unlimited plan with no additional fees.

Top Rated Comments

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Avatar
50 months ago

Still fail to understand how this is possible. I've been holding onto an upgrade and pretty upset about losing it. How is paying full price for a phone spread out over two years cheaper than paying up front? For an iPhone 7, I can pay 199.99 today for a two year contract or can sign up for a payment plan of 27.08 monthly paying a total of 650 over 24 months. I could be completely missing something but always saw the doing away with contracts to actually be a greedy move by carriers to not subsidize phones.

You may be on an older plan, and in many of those situations keeping the contract plan made sense. However, on their recent plans, the line access fee was much higher for two year plans than for payment plans or fully-paid phones. Also, with payment plans, the payments stop when you have fully repaid the phone whereas the higher line access fees of the contract plans persisted in perpetuity until you switched to a payment plan.

Two year contract:
$200 for device = $200 (charged once)
$40/mo line access fee = $480 annual
plus whatever data bucket you get
Total after two years: $1160 (plus whatever data bucket you get)
Total after three years: $1640 (plus whatever data bucket you get)

Payment plan:
Device is $0 down
$27.08/mo device payment = $325 annual (this fee ends after $650 is paid)
$20/mo line access fee = $240 annual
plus whatever data bucket you get
Total after two years: $1130 (plus whatever data bucket you get)
Total after three years: $1370 (plus whatever data bucket you get)

The longer you wait between upgrades, the better of a deal the payment plan is.
Score: 16 Votes (Like | Disagree)
Avatar
50 months ago

Meh, they were the last ones to have them anyway. T-Mobile, Sprint and AT&T ditched them already. The new way is cheaper for like 99% of people too

Still fail to understand how this is possible. I've been holding onto an upgrade and pretty upset about losing it. How is paying full price for a phone spread out over two years cheaper than paying up front? For an iPhone 7, I can pay 199.99 today for a two year contract or can sign up for a payment plan of 27.08 monthly paying a total of 650 over 24 months. I could be completely missing something but always saw the doing away with contracts to actually be a greedy move by carriers to not subsidize phones.
Score: 10 Votes (Like | Disagree)
Avatar
50 months ago
Whether it's VZ or anyone else - I find it a bad business practice to charge people an upgrade charge. That's a nickel and diming practice that needs to end. I've usually been able to negotiate it out by nicely asking.
Score: 9 Votes (Like | Disagree)
Avatar
50 months ago
And yet, your calling and data plan prices remains just as high as when they subsidized the phones.
Score: 7 Votes (Like | Disagree)
Avatar
50 months ago

The contract you signed was your acknowledgement and agreement, that said carrier could make changes to the contract and or service it provides as it sees fit. You shouldn't be mad at Verizon for exercising power under the contract you signed.

That is the dumbest logic I have ever heard.

My gym membership, for which I signed a contract,has a clause that can revoke my membership whenever they want to. If I walk into the gym tomorrow and they tell me my membership has been revoked since they don't like the way I look, I shouldn't be upset since it has that clause in the contract? The reasoning behind Verizon's decision will clearly impact my determination of whether or not I'm mad at the situation. Clearly it only benefitted their bottom line, likely significantly.

Anyone with a brain can see this is obviously a very anti-consumer move which will cause significant backlash by VZW customers. And you're telling me I don't have a right to be upset because I signed my signature at some interval of time ago? Go read a book
Score: 6 Votes (Like | Disagree)
Avatar
50 months ago
Kind of funny. My GF's iPhone 6 Contract expired today. She was going to go and grab an iPhone 7 and renew. I talked to her for an hour about how the 2 year 'loan' with upgrades every 12 months was a superior option but she was set on renewing a contract.

She was going to go tomorrow to renew.

LOL.
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Now, they need to get rid of all that company branding they put on their smartphones.

This is MACRumors. No one here is going to share your passion. Our phones and computers don't have any stickers "EneryStar" "Intel Inside" "powered by NIVIDA" "Verizon wireless" "Powered by Qualcomm"

LOL. I've never had any branding on my device except a big-ass apple logo.
Score: 5 Votes (Like | Disagree)

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