How to Pay Nothing for Your New iPhone

In 2008, I purchased a shiny new iPhone 3G for myself and my wife and spent a few hundred dollars in the process. Ever since then I’ve been able to buy each new iPhone and it paid for itself within an hour, maybe two at the most. In fact, sometimes I’ve even turned a profit.

So how was I able to do this? How could I possibly pay nothing for a new iPhone? Well truth be told, I’m not really paying nothing, because there is an up front cost. But in the end, being payment neutral is a very nice thing. Heck, even getting some money back is a step in the right direction, right? Let’s talk about it after the jump.

Before the Purchase

We all know the drill. A new iPhone is announced, everyone hops online to either preorder their new iPhone, or they get ready to stand in line on launch day. Good times are had by all.

For me, I have a slightly different plan. I preorder if I can, and if not, I get ready to stand in line. But before I do either of those, I make sure everything is ready and good to go for sale.

I’m the guy who keeps their Apple packaging, and that comes in handy when you want to sell your iPhone. I first make sure that the packaging is ready, then I put the charger, cable, earbuds and anything else I have for the iPhone in the box, that way it’s ready to go. I also snap a few quick pictures of the iPhone and the packaging so that I can be ready to strike when I need to. Now it’s time to get my iPhone.

Also, photograph any damage to the phone closely, that way you’re honest with the seller. You don’t want them to back out of the deal once they see damage, so be up front.

The Purchase

Now it was time to wipe everything on my iPhone, that way I could sell it and be good to go. So how do you do that? Just go to Settings > General > Reset > Erase All Content and Settings and you’re done. Now just sit back and let your iPhone reset itself, which should take a few hours to accomplish.

One last thing: If you’ve got an AT&T iPhone (or one with a SIM card), make sure to remove the SIM card using a paperclip. That’s yours, and you want to hang onto it.

Pricing

Look over your iPhone and take a realistic evaluation of its quality. Do you have scratches on the glass? Did you use a case or a skin? Make the iPhone as naked as possible and really make sure that you take note of every single problem with it, because each knick, scratch or crack is a mark against the overall value.

Now price the phone. I usually sell mine for the original purchase price, and say “OBO” which means “Or Best Offer” after the price. If someone wants to talk me down $50 or so, I might consider it, but by starting high you’re in a good place.

You can also check out the competition. Troll Craigslist and eBay to find people who are selling their iPhones as well. See what kind of damage they have, compare it to yours and match or come close to their numbers.

The Sale

From here on out, you have a few different options to choose from, but let’s start by talking about what works for me, then we’ll go from there.

I start on Craigslist, because that’s worked pretty well in my experience. You can use either your email or your phone number, but for me, I find that the phone is the fastest and best way to go. This way people can text you if they want, or just call you and get the job done quickly. Email has frequently caused me spam issues, so I tend to veer away from that end of things.

But Craigslist isn’t your only road here, and you do have other options. Apple is offering pretty good deals through the Apple Recycling Program. They’ll give you $200 for your iPhone 4 32GB in great shape, or $180 for a 16GB model. The drawback is that you’ll only get an Apple Gift Card in exchange, but if you’re reading this site, chances are pretty good that you buy a lot of Apple stuff anyways, so it’s not too bad.

Another option is eBay, but now it’s the waiting game. Unless someone picks it up for the “Buy it Now” price, you could be in over a week until you get your money, and by then you might have missed your window. The key here is to sell your iPhone 4 as close to launch day as possible, otherwise the market will be flooded with other people trying to do the same thing. This happened to my parents last year, who tried to sell their iPhones just three days after launch and found them almost impossible to move.

There are other online options that you can try also, ones like Gazelle.com that will buy your used electronics and give you cash back. I considered doing this with my iPad 1 when the iPad 2 came out, but I chickened out at the last minute. Maybe you’ve had a good experience with one of these companies, and if so, then let us know in the comments so other users can become informed on the issue.

If you don’t get any bites, consider dropping your price. Taking off $50 or $100 may hurt at first, but any amount you get closer to the purchase price of your new iPhone is money saved overall. And if Craigslist doesn’t work, then you can try eBay, Apple’s Recycling Program or an online option if you prefer. You have some choices here, that’s for sure.

Delivery

Since I use Craigslist, I now have to meet the people to make the transaction. Some people are uncomfortable with this, and I admit, if I wasn’t so tall and tough looking (although a giant wuss on the inside), I probably would be more intimidated myself.

To combat this, I usually arrange the meet at a public place where there are lots of potential witnesses just in case something should go astray or whatever. For me, that’s usually the parking lot of a gas station or fast food place, both of which have lots of foot traffic, so you know you’re good.

You can also bring a friend if you like, preferably one who’s a little intimidating looking themselves if you have that option. In my case, sometimes I go with my buddy Chad, a friend of mine from West Texas who’s 6’5″ and was fed a mixture of corn and bacon for most of his life. Know though that since we’re selling iPhones here, chances are pretty good you’re not going to get the same type of customer who looks for stolen cars online, so you should be fairly safe.

Once the meet happens, be nice and civil — you’re a salesperson here, so remember to be courteous to your potential buyer. Let them look over the merchandise, then take their money. Never, ever take a check or write down a PayPal account, because that’s just asking to get robbed. Make sure to count all of their bills — in front of them is usually best — and make sure all of your money is there. If it’s good on both sides, then shake their hand and drive away happy.

In most of my Craigslist sales, the entire deal went down in under five minutes, sometimes even less.

The Jailbreak Option

If you’re having problems selling your iPhone — or you want to raise the price a bit — you can also jailbreak your phone so that it can work on any carrier. We don’t talk about jailbreaking on this site, but a quick Google search will find you everything you need to know. The process itself takes just a little bit of time, and that might get you some extra cash in the end if that’s what you’re shooting for.

Final Thoughts

In my experience, I’ve found that many Apple products keep their resale value up over time, and you can make back most if not all of your original investment by keeping the item in good condition and striking while they iron is hot. I sold a three-year-old MacBook Pro just a few weeks ago for $900 — and I bought it when the newest models came out, so it was at a substantially discounted price. And I’ve sold my iPhones for retail price every time, with the only exception being my wife’s iPhone 3G, because I sold it two years after we bought it.

If you’re smart about it and plan things out thoroughly, you can do the same thing I do and get a new iPhone every year for either very little money or even nothing at all. All it takes is a little preparation and some of your time.

Oh, and for the record, anyone want a 32GB iPhone 4 in black? It’s in great shape and it’ll be available on the 14th.