Trade-In Programs Reduce Pain Of Verizon iPhone Upgrades

With Apple's iPhone 4 going on sale in February, companies have started pitching those looking to upgrade with trade-in deals.Smartphones are expensive to buy off-contract. Verizon Wireless is offering the Apple iPhone 4 for $199/$299 for 16GB and 32GB models, respectively, but only if you're an existing customer who qualifies for an upgrade or are a new customer altogether. Upgrading at full price will cost you a pretty penny. The 16GB model's full retail price is $649 and the 32GB model goes for a whopping $749 (that's a lot more than the iPad costs).

Verizon is offering to lessen the pain, but just barely. According to the FAQs posted on Verizon's web site:

There's a big, big catch though. You have to buy the iPhone 4 at full retail price. That means you can trade in your old phone for $200 (probably what you paid for it if it is a smartphone) and Verizon will give you a debit card that can be used towards the purchase of a $649/$749 iPhone 4. Sound like a fair deal to you?

That's not the only option upgraders have available. A company called NextWorth is offering its own upgrade program. NextWorth, which is built into the mobile phone sales units of some 847 Target retail stores (as well as its own online site), is offering trade-in deals in the form of cash or a gift card for other smartphones on the spot.

For example, NextWorth is offering $201 for iPhone 3GS 32GB; $155 for iPhone 3GS 16GB; $125 for iPhone 3G 16GB; and $91.50 for the iPhone 3G 8GB. (These trade-in values all assume the phones come in working condition.) NextWorth doesn't only accept iPhones for trade-in. It accepts a wide range of consumer electronics, including other smartphones, such as the Motorola Droid, Droid 2, Droid Pro, Droid X and Droid Incredible. Trade-in values vary depending on condition and what original items are still with the device.

NextWorth isn't the only site that offers cash or gift cards for used electronics, and there's always eBay or Craigslist if you're desperate. (You're likely to get a lot more than $200 if you sell via eBay.)

The problem with these trade-in programs is that they don't take into account the cost of canceling a contract with a carrier other than Verizon Wireless. If you bought the iPhone 4 from AT&T last summer, for example, you're on the hook with AT&T for another 18 months unless you don't mind paying the Early Termination Fee.