Last Updated: April 23rd, 2013

Verizon officially launched its new Device Payment Plan today, an option more and more of its customers seem to be clamoring for, especially now that T-Mobile has allegedly "killed" its own smartphone contracts. In an ideal world, Verizon would respond in kind with interest-free, 2-year financing of any smartphone you want, contract-free on your existing plan, subject to credit approval. The reality is a little more complex, something I think most people kind of expected.

Here are the key takeaways for Verizon's new plan:

  • You can finance any smartphone or tablet over $349.99 MSRP, up to $1000 total credit available for each customer (meaning account, not line), subject to credit approval.
  • You can only finance up to two devices at any time, subject to credit approval and the $1000 combined limit.
  • The financing period is 12 months, but you can pay off your balance early at any time.
  • And no, there is no special service plan rate / discount for those who finance a phone.
  • There is a $2 finance charge per month ($24 total if you go the full 12 months). It sounds like this is per device, as well.
  • Your contract will not be extended by using the plan (the big benefit).
  • Unknown: You may need a Share Everything plan to be eligible, based on the language on Verizon's site. We're waiting on confirmation of this with Verizon. Update: You do not need a Share Everything plan to enroll in a Device Payment plan.
  • Unknown: You may need to currently be in a contract (not going month-to-month) to be eligible. We're waiting on confirmation of this with Verizon as well.

So, yes, you can finance a smartphone on Verizon now, and upgrade your device early while on a contract. There are still a few unknowns to sort out here, though, such as whether you're truly able to go "contract-free" on Big Red now, and whether you'll have to give up your sweet, sweet unlimited data. We'll update this post when we learn more about those potential caveats specifically.

Verizon via Droid-life

David Ruddock
David's phone is whatever is currently sitting on his desk. He is an avid writer, and enjoys playing devil's advocate in editorials, and reviewing the latest phones and gadgets. He also doesn't usually write such boring sentences.

  • http://twitter.com/snookasnoo Idon’t Know

    What a scam. Verizon makes more money and you get nothing in return. Who is dumb enough to do this?

    • http://twitter.com/seanlongoria Sean Longoria

      You do get to upgrade your phone early without paying $500-plus all at once, but I guess that doesn't count in your world.

      • TheCraiggers

        No, it doesn't count. They're only doing this so that people who can barely afford a new phone can buy one through Verizon and become beholden to them. Big whoop.

        Now, if they would give us a plan discount for buying our own phone, that would be something.

        • Alexey B

          Screw them and their new plan... Google just show a Nexus 4 LTE that will work on Verizon, I'd much rather buy from you.

          • Freak4Dell

            Unless Verizon changes their minds, you won't see a Nexus 4 for Verizon. Google already tried doing a Verizon Nexus, and that thing isn't even worthy of being called a Nexus anymore. For a Nexus to be a Nexus, the carrier needs to back off and let Google do its thing, and clearly Verizon isn't ready to do that.

          • TheCraiggers

            I partially agree. In my opinion, anybody who has a nexus with a still-locked bootloader is doing it wrong. Yes, I'm aware that is probably an extremely elitist viewpoint. I just view Nexus phones as developer devices.

          • http://www.androidpolice.com/author/eric-ravenscraft/ Eric Ravenscraft

            It is an extremely elitist viewpoint. I own several Nexus devices because I like them the best. Hell, the Nexus 10 is the best 10" Android tablet on the market by a wide, wide margin. Why should I have to unlock the bootloader on my phone or tablet just because someone on the internet thinks they're good for one purpose? This is an extremely myopic view of what devices are and why unlocked bootloaders matter.

          • TheCraiggers

            As I said, I'm aware it is an elitist viewpoint. However saying something like "Why should I have to unlock the bootloader on my phone or tablet just because someone on the internet thinks they're good for one purpose" takes so many liberties with my post it's nearly completely without context.

            I never said they were only good for one purpose. What I said is that to me, and to many others, the easily unlocked bootloader and easy to modify software of the Nexus devices is the #1 reason many of us love them and buy them. I sure don't get them for the specs that usually just barely manage to be on par with other devices.

            Yes, I'm aware that there are plenty of people that probably bought the Galaxy Nexus because they liked the looks of the phone or whatever, and have never even heard of a bootloader. There are also people that buy Ferraris that never drive them fast, or keep them in the garage to stay pretty. Nothing wrong with either, but in my eyes fast cars were meant to go fast, and Nexus devices were meant to be flashed.

            No, Nexus devices aren't the only ones that can be unlocked easily, but the important thing is they have that tradition. You know what you're getting when you buy one- a device that may have some rough edges, but gives you the sandpaper to polish it as you see fit.

          • http://www.androidpolice.com/author/eric-ravenscraft/ Eric Ravenscraft

            I was referring to your comment that you "view Nexus phones as developer devices." They're not. They're wholly self-contained devices that are perfectly able to serve as consumer devices. I'm not sure where you get the idea that all Nexus devices "have some rough edges." That's true of some, sure. But as I said, my Nexus 10 is the best 10" Android tablet by a wide, wide margin. I would recommend it to anyone and everyone.

            I think it does the entire Android system an injustice to describe Nexus devices this way. The unlockable bootloader is a fallback plan for the minority of users that want to tweak their devices further. It's not the main or even *a* primary purpose of the Nexus program. The Nexus line is for Google to make good, stock Android devices.

          • svartalf

            Actually, it still sort-of is worthy of being a Nexus. I'm on 4.2 (and not via CM10.1 either...) and they just were slllloooow on getting the updates to us OTA. Still basically unlocked. Still without Verizon's crapware.

            The main reason the GNex didn't go as well as anyone thought is that Google didn't really sell it that hard (The Nexus 4 was almost immediately announced...) and Verizon got it, didn't put the effort they needed to into it because it was slightly more open than they wanted it to be (i.e. they couldn't, by default, put their crapware on it and lock the bootloader down...) Some of it was also because the GIII came immediately out and was a slightly better phone for the same prices as the GNex.

            Combine this with a lacklustre offering of accessories (The GPS dock that was planned (using the contact points on the side to charge, etc.) would've rocked- what they went with? Geez...) this caused a vacuum that the device never got the attention or love it could've gotten.

      • Jeff Hesser

        $2 a month finance fee for a 12 month loan is not VZW doing you a favor in ANYONES world.

      • Steve Green

        If you need to finance $500, you do not need a phone that expensive. In that situation you should be saving every dime you can.

        • http://twitter.com/snookasnoo Idon’t Know


      • http://twitter.com/snookasnoo Idon’t Know

        I live in the real world where I can see an obvious ripoff. You?

  • Jeff Hesser

    so you can go contract free, continue paying just as much as people getting up to $400 off the cost of their phone, and pay a finance fee. Yup. VZW certainly figured out how to game this system and confuse people trying to compare service providers.

    • http://www.androidpolice.com/ David Ruddock

      I'm pretty sure no one expected Verizon to lower rates for those who choose to finance a phone. You can buy a phone outright on Verizon and you pay the same rate as everyone else. It's been like this for years now. I don't know why they'd offer people who are taking advantage of financing cheaper service than those who buy a phone outright. I'm not saying Verizon's pricing structure is super competitive or anything, but this is far from a surprise.

      • http://profiles.google.com/tim.glaser Tim Glaser

        It's just that they are still not offering a rate plan that doesn't include a phone subsidy. That's the great thing that Tmo is doing, for people that have a phone already [Nexus 4] or like to keep their phone longer than 2 years [I can see some people who might not feel the need to upgrade a GSII from 2 years ago] will get to go some months not paying the subsidy.

        This isn't an option [as you point out] on Verizon, and that's what makes this announcement a waste to me.

        I would be more excited about Verizon saying 'if you pay full price for your phone, here is your new 2 year contract monthly rate.'

        As it is, Verizon has just figured out a way to make MORE money, not a way to better serve the needs of their customers.

        As you said though, it's not at all surprising. Verizon sucks.

        • http://www.androidpolice.com/ David Ruddock

          Well, T-Mobile is definitely injecting a bit of propaganda into the notion that you're "paying" for a subsidized phone anyway because your service bill at Verizon is higher than it would be at T-Mobile going off-contract.

          The fact is, Verizon offers better speed as a function of coverage than anyone else in the US right now, it's not even really a contest at this point (a year or two from now, who knows - that may change). They know this. it's why they have so many subscribers. It's why their plans are more expensive than everyone else's - you're paying for a superior level of coverage, and what is currently the world's single largest LTE network. Do you think Verizon's prices would be so high if their coverage and speeds were comparable to T-Mobile? Probably not.

          So, the notion that you're "paying" to subsidize everyone else's handsets is kind of irrelevant. You're paying for Verizon's service. That means you're opting out of advantages and incentives other carriers with inferior service may offer you. They offer those incentives largely because they are fighting a losing war with Verizon and AT&T for market share. And hey, good on them for trying - I would be in love with a carrier that offered Verizon's coverage (at least in my area) with T-Mobile's new pricing scheme and device payment plans.

          At the end of the day, it's supply and demand. Verizon supplies the US's best mobile network - people demand a superior level of coverage and speed, and Verizon knows they're willing to pay for it. Competitors may eventually start challenging Verizon's coverage and speeds in key markets in the next few years, and at that point, the landscape may change again. We'll see.

          • http://profiles.google.com/tim.glaser Tim Glaser

            Clearly I am paying for phone subsidies though? The 'normal' thing is for people to get an iPhone or a Galaxy device, pay $200 up front for it, and then have a 2 year contract. They 'save' $400 [ish] dollars this way vs. someone who buys a phone for full price. Because there is no option for 'if we aren't subsidizing your phone then the price is lower.'

            You are correct that Verizon easily has the best overall service, and as a result they have the most customers and can charge the most for it. I just take issue with the fact that they don't give me an option to only pay for what I am actually using [their network] and not pay for what I do not want to use [their subsidy].

            Tmo's recent plan has brought more focus on this issue, however I have been complaining about this for a long time.

          • Matthew Fry

            You are overlooking the fact that Verizon and the other cell providers have specifically used the ever rising phone prices for their excuse for draconian plans (terms, length, cost, cancellation fees, etc.).

          • Freak4Dell

            You're correct that Verizon can charge more because they have more coverage, but that doesn't change the fact that they still charge a subsidy markup, too. Verizon's plan with 2GB is $100 a month, and T-Mobile's is $60. That extra $40 isn't all just for the superior coverage. If we compare with Sprint, whose coverage is very similar to T-Mobile's, their prices are still $10 higher ($80 vs $70). It's hard to say that extra $10 is for coverage when the coverage is so similar. I wouldn't ever expect Verizon's prices to come down to the T-Mobile level, because come on, let's be real. However, it would be nice if they would give you a discount for not taking a subsidy. They can still upcharge for the superior coverage, but you know, not pocketing that extra bit that they saved by not giving me a discount on my phone would be nice.

          • Nick

            The problem with this is that Verizon's coverage, service wise, with what it can do, is at least 2x better than T-Mobile. At least with Verizon I have 3G everywhere and it's fairly quick. And they have LTE in many places. T-Mobile still has 2G is most places and their HSPA+ or LTE is much much smaller than Verizon's 4G coverage.

            Once T-Mobile has refarmed their slower network, then they are at least a viable alternative. At this point they are only worth it if you live in a huge metro areas. Otherwise outside of those areas, most places will have 3G and even more with 2G still.

          • Darth Vaeder

            verizon charges more because they offer different incentives. tmo offers lower prices on "non-subsidized" phone purchase plans in order to draw customers to their network, or to keep you on it. Verizon doesn't do this b/c they have a better network, with better performance. They offer you the lower priced phones in order to lock you in to 2 years of their higher price service. The benefit for the customer of paying 'full price' for the phone is being able to leave the network whenever they feel like it's not worth it.
            Like em or hate em, if they weren't better people wouldn't pay their prices and stay with them

  • http://twitter.com/ToysSamurai Toys Samurai

    >> There is a $2 finance charge per month ($24 total if you go the full 12 months). It sounds like this is per device, as well.

    As good as it may sound, if your phone is only around $500, the actual interest rate will be near 5% at $2 a month. You might want to check your credit card and see how much your interest rate is before giving money to the Big Red.

    • http://www.androidpolice.com/ David Ruddock

      Well, a high-end phone is about 600-$650, and not getting fancy with compounding and such, that works out to around 3.3-3.7% APY. I doubt anyone has a credit card with a non-promotional interest rate that low. But hey, I got 0% APY on a Citi card for 12 months, so for some people, yes, a credit card could be a more viable option, and one that's probably a little more helpful to your credit score.

      • http://twitter.com/ToysSamurai Toys Samurai

        At $600, if I calculated correctly, the APR will be around 7.5% (compound interest.) Rare, but cards with such a low APR do exist -- although, one may need a pretty good credit score to get one of these cards. So, you are right that it may not make sense for everyone. However, if you pay with a credit card, you don't have to buy from Verizon either. Chances are for phones that have been released after 2 to 3 months, you can buy a new one from eBay at prices cheaper than from Verizon.

        Again, it won't work for everyone, but everyone should keep in mind that $2 is not a "low fee" as Verizon wants to portray.

        • John O’Connor

          regardless of how you "pay" for the device, you do not receive any incentive for doing so. You will continue paying the same rate as a subsidized customer and I believe that is the biggest takeaway here.

          Basically, Verizon will clear off the debt of your subsidy from their books sooner and hence be more profitable, but then you, as the consumer, receive no benefit and in the end pay more money than you would have by purchasing the same phone at a subsidized price.

          I call shenanigans. Yes you pay for Verizon's service as is the mantra repeated here ad nauseum, but you pay more for the service if you pay off the subsidy quicker. It is certainly not in line with T-Mobile's early payoff option as you would no longer be paying the extra cost for a subsidy when you pay the device off.

          Anyone who feels they are getting a great deal should probably be allowed to do so, as a fool is soon parted with his money.... and it doesn't take a rocket scientist to realize that this entire thing is all smoke and mirrors. Clearly anyone who can qualify O.A.C. does not need such a plan in which to pay more for the device or the service or both combined.

  • Phoney6

    And I'm guessing I still get to pay the "I'm making up for the subsidy in my monthly payments even though I'm off contract and have more that paid for this phone" rate I currently enjoy.

    • http://www.androidpolice.com/ David Ruddock

      There is no rate discount. And as I said to Jeff, Verizon doesn't even offer a discount if you buy your phone off contract - there would be no reason for them to offer a discount if you chose to take advantage of financing if they don't provide cheaper service to non-contract customers already.

      • phoney6

        Oh I get that I just think its a bad model for the consumer, though they have great coverage which I need so I still pay them every month much to my dismay.

  • Tim Harper

    So, basically this only benefits those who want to buy a new phone more than once every two years without killing your wallet at one time. I will' be interested in this if I can keep my unlimited data. Maybe Verizon won't be total douches and let us do that....but that is very unlikely :/

    • Steve Green

      If $400 kills your wallet, you probably should not be wasting it on new phones that often.

      • Tim Harper

        $600-650 is more accurate for a Verizon phone, and I don't buy them out right. I'm too poor for that. If I'm allowed to keep my unlimited data, this well let me by a new phone without paying for it up front.

        • Steve Green

          If you can't save up $650, you should probably consider a cheaper provider.
          Heck, even if you can. VZW pricing sucks.

          • Tim Harper

            Very true, however I live in northern Michigan...NOBODY else has 3g where I live. :/

        • http://twitter.com/snookasnoo Idon’t Know

          You are not allowed to keep unlimited on this deal. You are better off finding a way to pay full price for the phone instead.

  • Evan T

    It would seem to me that Verizon is targeting poorer people and kids with this new plan, which is kind of messed up. Since people with a lower level of income would probably the only group that couldn't afford the $200-300 lump sum price tag, Verizon has managed to get twice the amount after the user pays off the $600+ phone. Then tact on the $24 ($48 for 2 years) for service fees. Same product, same service, twice the profit.

  • Steve Freeman

    The ONLY thing Verizon has going for them anymore is their network. If they don't stop pissing their customers off with various changes that only end up making customers pay more, they're going to start losing customers. The only reason I'm still with them is that I'm still grandfathered into unlimited data. If they ever come up with a way to make me lose that, I'm going to AT&T the very next day.

    • http://www.facebook.com/profile.php?id=551560076 Dan DeMarco

      You do realize that Verizon and AT&T are pretty much Coke and Pepsi with almost identical products, AT&T with the inferior network however. Pick your poison, Bucko.

  • http://twitter.com/s99nj S. Ali

    Only Verizon subscribers would be dumb enough to sign up for this, they seem to have more money than common sense.

    • Evan T

      What does being a Verizon customer have to do with being dumb? They have the fastest network, the best coverage, and the largest LTE rollout. If you compare the price of devices and services on Verizon vs that of a pay as you go plan for a single user then Verizon loses. Do that same comparison for a family plan and Verizon usually comes out as the better deal.

      • duse

        No, not really. Verizon 4 smartphones + 6 GB = $240. 4 x Straight Talk = $180. This gap continues even all the way up to 10 people (10 lines + 100 GB). Verizon never comes out to the better deal.

        • Evan T

          You never included device costs. Over 2 years on Verizon you will spend $5760 on a plan and Straight Talk will be $4320. Since top of the line devices for Verizon tend to be $200 at launch (although other vendors tend to have steep discounts) while off contract pricing is generally $550+ . So if a family gets 4 top of the line release date devices with Verizon, that would mean a straight talk user would have to find the same item for less than $560 per device to be the better deal. The SGS4 will be around $640. Add to that the superior network and coverage and the Verizon plans are fantastic for families. I totally get why people opt for ST when alone but I have no idea why people bash the (I guess not so obvious) benefits of VZW.

          • duse

            Yes, you're totally right that in this example of a family of 4, that ST will cost just as much as Verizon if every person buys a device for $560. In that scenario you might as well go with Verizon since you are getting better coverage and speeds. However with pre-paid, you have flexibility, in terms of how long you stay with them but more importantly, which devices you get. There is little reason to spend $500-600 on each phone. A Nexus is $300-350 and is basically top of the line. If there is a spec or two that it is behind in, that gap will always be made up mere months later when the next device comes out. Without subsidies, it makes little sense to spend $600 on a phone that will be worth less than half that a year later. For the rest of the family who doesn't care what device they have, there are even more options, like cheap GS3s/GS2s, Galaxy Nexus, etc.

            Going back to the example, if every Verizon family member paid $200 for a phone, and every ST member paid $300 for a Nexus 4, the savings work out to $43/month over 2 years. As you said, the savings for a single user are much more pronounced.

            You are right that the benefits may be "not so obvious" on both sides of the argument. Only people like you and me think about things to this detail. And I also am not bashing Verizon's actual benefits of coverage and speed. I'm just making the point that buying $600 phones with prepaid makes little sense, and plenty of people can have more than adequate service with a Nexus 4 on Straight Talk/Net10/T-Mobile and save a ton.

          • Evan T

            Let's just hope Google continues the $300 pricing structure (with more storage space).

          • http://twitter.com/snookasnoo Idon’t Know

            Doesn't help if you can't get a signal from the carrier.

  • spunker88

    Nothing really special to see here. They are basically financing your phone in a similar way to a car finance. If you have the money to buy a device at full price I really see no benefit to using the financing plan from Verizon. IIRC the warranty is the same either way.

    • John O’Connor

      The only way that they can insure they bilk people out of more money would be to replace their existing terms and conditions to make you choose one or the other. Which I WOULD NOT put past Verizon. Basically they could say that you purchase this device outright and sign the contract or you agree to these new subsidized financing terms and can possibly remove the contract when the subsidy is paid off, but we reserve the right to charge extra money so that in the end you will pay the same regardless. Kudos on making your shareholders happy VZ. You may have the best network at this point in time but over and over again you do it at the expense of your customer.

      All it will take is one other carrier to outdo you in price, value and most importantly, coverage. I see your approach, take what you can while you still can and work out another scheme when the time comes to find a larger payout when you begin losing customers.

  • duse

    Hey author...why do you put "killed" in quotes? T-Mobile really did kill contracts, there is no debate around that. You can say whatever you want about a device payment plan "feeling" like a contract, the fact of the matter is, it isn't one, and it's very different and much more generous than what any other carrier offers, especially Verizon.

    You seem to excuse Verizon quite a bit. Yes, they have the fastest network. No, that does not mean $100/month for a single line is justified, nor is allowing users to pay for a device TWICE via this new awful scheme (the financing plus the subsidy already built into your plan). The only reason they get away with this is because of the shit state of wireless regulation in the US. It's not even "supply and demand," as in, most people that have Verizon feel the service is worth the money. Maybe that's true for people on this board, but for the general public, they have Verizon because their stores are at every street corner and they don't know there are alternatives. Nobody needs 20 Mbps LTE or can tell the difference between that and 5 Mbps HSPA+. You put GSM pre-paid service in most people's hands and they won't be able to tell a damn difference unless they live in a bad coverage area.

    If YOU feel Verizon's service is worth the price, that's great, I have no problems with it. Just please don't make excuses for them or confuse readers by misusing quotes when referring to the competition.

  • dude

    I don't see the value in this if you are going to pay the subsidies cost in the monthly contract cost anyway, along with the full price of the phone. If you were to pay full price for the phone, then they lowered your contract cost or require no contract like with T-Mobile then it make sense. This right now is rip off.

    What nobody seem to mention is the fact that you are purchasing a CDMA phone (okay there are times when the device also doubled as an unlocked world phone). But I can't see myself paying hundred of dollars MSRP cost for a CDMA phone, these phones always have lower resale value compared to international unlocked version. They tend to have slower update time (sometimes much, much slower) and if you are into custom rom, wanting to run the latest Android version or stretch the life span of the device, developers are also less in numbers for the CDMA version. It make more sense just to buy a used CDMA phone. Just compared the regular going price for any used highend Android phone that is older than 6 months, the CDMA version is always cheaper.

    • dude

      Oh, and don't forget the locked bootloader.

  • pacoman

    You don't have to be on contract from what I hear and you don't have to be on share everything plan

    • http://twitter.com/snookasnoo Idon’t Know

      Yes you do.

  • bakemcbride21

    The only reason to pay full price for a phone on Verizon is if you are a heavy data user and you want to grandfather that sweet $30 unlimited data plan. Otherwise there's no incentive and not penny wise to forgo getting an unsubsidized phone on big red.plain and simple

  • Joe G.

    Everyone wants a great deal, but no one wants to pay for premium services. I'm a Verizon customer and I applaud them for standing firm and selling the quality of their products and services. Why should anyone ask for a discount just because someone is financing a product they can't afford? It's only fair that if you have the need to finance a "want" due to your current financial situation, there should be an additional price to pay in some type of form of interest or by entering into a 1 or 2 year commitment.

  • Kyle Daniels

    You have to have had a post paid account in good standing, contract and month to month (post contract) will work. Just no prepaid. This account has to be active for at least a year, some say 6 months but it is a year.

  • Tony

    So, with this 12 month installment phone payment plan, I pay:

    the hidden phone subsidy fee bundled with my monthly bill
    AND the 12 monthly installments for my phone
    AND pay a $2 "monthly finance charge" for the "privilege" of using VZ's 12 month phone payment plan?

    This purely serves to take more cash from VZ customer pockets and into its own. I was a VZ customer till I moved to T-Mobile's UnCarrier plans, and now I feel more and more comfortable with that decision.

  • Hector Barnes


  • lizz

    Spoke with Verizon manager today they said you could keep your unlimited data if you finance the phone b/c you are not changing the contract on the line... Just to clarify

  • Comefollowme

    I keep hearing that buying phone outright VS 2 years contract save more money in the long run.
    I went to Verizon web site and did both with 2 years contract and buying phone outright and the monthly bill still come out exactly the same. The only difference is that I can leave anytime I want. Instead of getting stuck with them for 2 years. I thought that my bill would be lower without contract.

    Could someone please explain to me where the saving is?

  • Nick