The average new car depreciates by 40% within three years. That’s a lot of lost value, but it pales in comparison to phone depreciation rates. While top sellers like the Ford F-150 and Toyota Camry respectively lose 37% and 42% of their values over three years, the iPhone 7 depreciated by 76% over that span – nearly twice as much as the average car. The Galaxy S7 and LG G5 lost even more value, depreciating by 85% and 92%, respectively. What about the short term? Cars lose around 20% of their original values within one year, then around 10% each year after. But phones lose between 38% and 76% of their original values within one year, depending on the model (iPhones tend to hold value longer than Samsung Galaxy phones, followed by other Android phones). For example, after one year the iPhone X depreciated by 45% while the Galaxy S8 lost 57% of its value. The value of an LG G6 dropped by a considerable 73% within one year of its launch. Phones lose an additional 10% to 15% of their original values by year two and can depreciate by another 10% to 15% or more during year three. Phone prices continue to escalate, propelling the total cost of ownership to outrageous levels. Our widely distributed report on the total cost of phone ownership found that the average person will pay more than $70,000 for phones and wireless service during their lifetime. It’s an issue that’s becoming increasingly important, and people are combating high prices by holding onto their phones longer than ever – an average of 31 months. That longer upgrade cycle is one way to lower costs. Another strategy is to buy phones that depreciate at a lower rate, which allows you to maximize value on resale. Timing is another factor. Consider the iPhone 7, which depreciated by 60% two years after launch. By year three, it lost 76% of its original value – a full 16% drop during its third year. That rapid year-three depreciation underscores the importance of selling a used phone at the right time. Wait too long, and you could lose a lot of money. The following tables depict phone depreciation rates for popular devices over one, two and three years.
Depreciation rates accelerate when a new flagship phone is announced. For example, the iPhone X lost 19% of its value from July to September 2018 ($733 to $592), when the iPhone XS was released. In fact, old models can lose between 15% and 40% of their values during the weeks surrounding a new flagship launch. Many sellers beat the value drops by taking advantage of price locks, which let you lock in a price now yet wait up to 30 days to sell your phone. That way you can keep your old phone while you wait for a new phone to arrive – without losing value in the meantime. Price locks are free and there’s no obligation to sell.
Did you know? Many phones are worth $100+. Find the value of your phone.
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