I’m a gadget nerd. I love having the latest and greatest phone. But my wife is more frugal—she’d rather run her phone into the ground before upgrading. But is upgrading every three years really more cost effective than upgrading every year? I ran some numbers to find out.
Subsidized contracts are all but dead, which means that most of the time, the most cost-effective way to upgrade your phone is to sell your old one, and use that money to (partially) pay for the new one. But I always wondered whether it was more cost effective to sell your old phone early, while it still had value, or run it into the ground. Which saves you more money in the long run?
Here’s my theory: If we can look at the average market price for the last few generations of iPhone, we can use those to estimate how much value your iPhone loses every year. So, the price of an iPhone 6 in September 2015 estimates an iPhone’s value after it’s one year old, an iPhone 5S estimates a two year old iPhone, and so on. From there, we can calculate how much it’d cost you to upgrade to the latest phone from each model.
To calculate average selling prices, I looked the “Recent Sold Average Price” onSwappa for the lowest-tier version of the phone on all four major carriers, plus unlocked versions. I averaged those 5 prices together to get an “average” price for that phone at the time of this writing. Those numbers will change quicklynow that the new iPhone has been announced, but the general rules should stay pretty similar.