When buying a new smartphone, you have two choices: Pay full price upfront, or pay over time through a carrier's contract.
You'll save money -- possibly hundreds of dollars -- by buying used, especially if you're OK with an older model.
But is the upfront discount worth the risk the phone might be stolen, have security flaws or not work correctly?
Here's a look at the key factors in deciding whether buying a used cellphone is right for you.
For some people, carrying around a $600 gadget that's easy to lose, break or have stolen is unsettling. For others, it's simply unaffordable. Here's a sample of how much you could save on a popular used smartphone. These examples compare phones for sale from Apple and Verizon with phones on online marketplaces Gazelle, Glyde and Swappa.
Used prices of popular smartphone models, Verizon network
|Apple Store||iPhone 6: $649.99*||iPhone 5: not available||Samsung Galaxy S5: not available||Samsung Galaxy S4: not available|
|Verizon online store||iPhone 6: $649.99||iPhone 5: not available||Samsung Galaxy S5: $599.99||Samsung Galaxy S4: $499.99|
|Verizon (2-year contract)||iPhone 6: $199.99||iPhone 5: not available||Samsung Galaxy S5: $199.99||Samsung Galaxy S4: $49.99|
|Gazelle||iPhone 6: $559 -- good
$629 -- like new
|iPhone 5: $209 -- good (out of stock)||Samsung Galaxy S5: $379 -- good||Samsung Galaxy S4: $224 -- good (out of stock)|
|Glyde||iPhone 6: out of stock||iPhone 5: $171.75 -- good
$280 -- excellent
|Samsung Galaxy S5: $309.75 -- excellent||Samsung Galaxy S4: $291 -- excellent|
|Swappa||iPhone 6: $598 -- good
$600 -- mint
|iPhone 5: $190 -- good
$225 -- mint
|Samsung Galaxy S5: $310 -- good
$355 -- mint
|Samsung Galaxy S4: $190 -- good
$219 -- mint
*Price is for unlocked, 16 GB SIM-free version; no prepaid Verizon version is available. Full-price T-Mobile version is also $649.
Notes: We compared phones tied to Verizon’s network because it’s the nation’s largest carrier and because Glyde doesn’t sell unlocked phones. All prices are from the companies' websites on Feb. 16, 2015. Some phone models were not available in all conditions (e.g., good, excellent). Swappa’s "mint" is the equivalent of Gazelle’s "like new" and Glyde’s "excellent." Glyde also offers phones in "acceptable" and "certified" condition.
A $30 to $50 discount might not be worth the risk when buying a preowned $650 device, but saving $400 on an older but still perfectly functional iPhone seems like a bargain. Prices are constantly changing as supply fluctuates; track them for a few weeks and you might snag a deal. Glyde will even email you when the phone you want drops to the price you want.
Fluctuating supplies also mean you might not find the color or memory size you want. You might prefer a "good" phone for a steeper discount, but find only "mint" devices for sale. Or your preferred model might be sold out.
Any phone you buy -- used or new -- could have broken components or be a complete dud.
But unlike a new phone, a used phone may no longer be under warranty.
Besides, warranties won't cover common used-cellphone problems such as ordinary wear and tear, batteries that won't hold a charge and accidental damage.
Minimize your risk of buying a phone with functional problems by using a reputable seller with a buyer-friendly return policy.
Other than eBay, which presents buyers with such a complicated used-cellphone marketplace that we won't cover it here, the main used cellphone marketplaces are Gazelle, Glyde and Swappa.
Glyde and Swappa act as intermediaries between buyers and sellers. That means it's up to the seller to be honest about the device's condition. However, both sites protect buyers with rules against selling junk devices.
Glyde doesn't release your payment to the seller until you've received the phone and approved its condition. You have 72 hours to make sure it works and is in the condition described. If not, you return it and get your money back.
Swappa manually reviews all listings but relies on PayPal's purchase protection policy, which allows buyers to open a dispute if a seller misrepresented the item's condition.
Gazelle buys used cellphones directly from consumers. It runs each phone through a 30-point functional and cosmetic inspection and sometimes refurbishes devices to bring them up to par.
Centralized processing should mean consistent phone quality, and Gazelle gives buyers 30 days to exchange or return problematic devices.
One worst-case scenario when you buy a used smartphone is that it's loaded with malware. Hackers can then use your phone to steal banking credentials, secretly send text messages to premium numbers they own or sign you up for costly premium services, says Ondrej Krehel, managing director of LIFARS, an international cybersecurity and digital forensics firm.
Krehel advises lowering your risk by performing a factory reset and erasing the phone's internal storage as soon as you receive it.
A factory reset returns the phone to its original state, Krehel says. Search online for the device name and "factory reset" and follow the instructions.
Reputable used-cellphone vendors do this step for you or instruct sellers to do so.
"All devices we sell are data-wiped and restored to factory settings," says Alyssa Voorhis, Gazelle's senior tech analyst. "This process removes both the personal data of the previous owner and any nonstandard software, like malware, running on the device."
What about buying a stolen phone? Consumers have bought used phones that seem to work, and then are reported stolen and deactivated.
Once you receive your phone, check its electronic serial number (ESN), mobile equipment identifier (MEID) or international mobile equipment identity (IMEI) number to make sure the phone isn't locked.
Find your phone's number in the settings menu or behind the battery, then check it for free online at Swappa (though the results aren't guaranteed) or for $2.99 with CheckMEND, an online service that checks data from the FBI, insurers, retailers and cell carriers for problems that could prevent you from using your phone. Besides being stolen, the phone could be reported lost or a former owner could owe the carrier money.
For iPhones, also use the Check Activation Lock Status tool on iCloud to make sure the previous owner disabled Find My iPhone.
Any reputable seller will let you return a phone that won't activate.