Ridiculous Down Payment

  • 21 August 2016
  • 15 replies
  • 18630 views
E

I am completely appalled at what happened today.

I had finally decided to ditch ATT due to slow LTE speeds in my area and jump over to T-Mobile and went to do so today. I'm going from an LG G4 to a Note7.

My information was taken for a credit check, which I wasn't at all worried about. My credit isn't excellent, but with all three fico scores in the upper 600s I assumed there wasn't going to be much of an issue, even if a small deposit/down paymentt was needed. Add to that my perfect history with ATT and Verizon and I figured the switch was a done deal.

So then, imagine my surprise when I was told they could finance the phone for $700 down. Seven-hundred.

First of all, I can't imagine why I'd bother because at that point it would make more sense to buy it outright.

Relatively speaking, I paid less down and had a significantly easier time purchasing a new car recently.

I contacted customer service to see if I could figure out why it was so high, and if a mistake might have been made. The representative (who, to his credit, was very nice) informed me that this was indeed correct and unfortunately had no real explanation as to why.

Just as an experiment, I had a Verizon sales clerk see if they could get me approved, and there was no problem at all. No money down, Note7 on their equivalent monthly financing option.

Similarly, I could use my current Next plan with ATT and pay nothing up front.

Why then, does it seem T-Mobile is making it substantially more difficult to switch to them than Verizon?

I'm actually extremely disappointed. I was fully prepared to join "Team Magenta" for the benefits and better coverage in my area. Unfortunately, I'm stuck with the same old Big Two it would seem, as I'm certainly not paying $700+ up-front to go to T-Mobile. Especially not for seemingly no reason.

15 replies

tidbits
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How is T-Mobile going to know your history with other carriers? The reason why you may have a "better" deal is because you do have history with them like you said.

E

Relevant information is why. The point was that there are no negatives on my credit report from any mobile providers.

Yes, I do have a long history with ATT, but not Verizon. I only had them for about a year, several years ago and paid my ETF to move to ATT. Thus, Verizon has no particular reason to trust me any more than T-Mobile does.

tidbits
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Userlevel 6
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Doesn't matter if you have negatives or not.  You have history and that affects decisions. Even if you left early YOU still paid on time, and fulfilled you end of the deal. I used to be an underwriter.

Personally I'd give a better deal to a person who has a history with Citibank(where I used to work) and a 650 Credit score than the guy walking in getting the same loan amount with no history with us.  That can be the difference of up to 7% interest rate.

When you purchased that car and put less than $700 down chances are you are paying 3-7% more interest which comes out more than if you put a down payment larger than $1,000. 

E

You missed where I said "relatively." I put down $10,000 on a $35k vehicle. The equivalent to what I would be paying up front for the phone would have been a down payment of $28k, which would be rather silly.

History may make a difference, but if that other customer walks in with a squeaky clean 800+ on all three bureaus, and a long, spotless credit history with great DTI ratio, etc., There is no question who will walk out with a loan.

tidbits
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Userlevel 6
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That's if you have 800, but we are talking 600's with no credit history.  There is a huge difference between those scores.  The higher the less we look for history.  If you are sitting at 650 I'd take the guy who spent a year with us than I will with a person who has no history with us and interests reflect that. 

A car has a higher resale value and easier to recoup the money.  Most cell phones within the year always sells less than 50% is value on release.  You can't say the same for a car.  So a car is a bad comparison.

E

You make a fair point. Part of what I'm trying to convey, though, is that a $35k item is something that requires more investigation and consideration on the part of the financing bank, than is an $800 item. I think we can agree on that.

The credit check done by T-Mobile, or Verizon for that matter, can't have too much thought placed into it, based on the literally instant decision. I would assume there's some sort of algorithm used by a computer to offer these instant results.

I could afford to pay the $700, but at that point why bother? As I said in my OP, if I'm going to pay that much, I might as well just part with the remaining $150 and buy it outright. Which, again, I could, but have no desire to and no need to. I want to switch to T-Mobile, and I assume that T-Mobile would prefer to have me as a customer as well. It's just that I could pay $0 if I stay with ATT or even switch to Verizon. That makes it a lot harder for me to justify leaving. Surely you can see where I'm coming from on this?

gramps28
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Userlevel 7
Badge +14

The bank will reposse the car if you default on the loan in a heart beat but Tmobile has no option to get the phone back if you default on your payment except blacklisting.

A

I definitely see where you are coming from @eightd ,  $700 is a chunk of change for sure.   I guess the way I look at it (I have pretty high downpayment amounts right now, too) is that I tough it out with my Note Edge for just another couple of months and then, because I have made every payment on time within 2 days of its due date, I will qualify for zero down and then I will get the phone I really want.    For me, the lower cost of the service is way worth what is to me a small enough sacrifice.  I actually like my Note Edge.

But, that's one thing to keep in mind -  once you have established a history with T-mobile (12 consecutive on-time payments) then you will be considered well-qualified and will get the lowest downpayment amounts.

Another thing to consider is that any of the other providers (who are offering you a 'free' device, in exchange for a 2 year contract) are going to recover the cost of that device from you in higher service charges.  Except that once they've done that, they are not going to then reduce the amount you are paying for service. Additionally, should you decide to change carriers they are going to doubly recoup that initial loss-leader in the form of ETF.

So, when making my own decision it was a combination of things which made T-mobile the right choice.  I am honestly super happy with my service, and enjoy all of the little perks like Music Freedom, Binge-On, and the free Pokemon Go data just about sent me over the moon I was so delighted.   Oh, and also Frosty's. 


Just my two or seven cents.

😊

A

Sweety im with you i could care less the excuse their is no reason on earth that you should drop more for a efen phone than a car or house payment, no excuse !!!if all company did it we could have a debate but the facts are not all rob you that blindely but since tmobile does have better service they get away with it and then you have blind corparate fans who have no problem shilling out for them coming on here not wanting to hear your legit gripe and continue to give you bs excu

ses on why they are able to be jackasses. Must be nice to have great credit cuz it makes it much easier to be snobby towards those who dont

M

Their ridiculous down payments are due to the fact they want to keep the monthly payment “low”.  $30 to be exact.  While companies like AT&T and Verizon will just require the taxes, since they can’t be financed, and will finance the whole amount for about $48 a month. 

M

I'm so upset and disgusted with tmobile right now! They are asking for $350 down! What type of down payment is that, and I'm on the original jump where I do not have to pay half of an old phone off before I purchase a new one, and I can jump twice a year! I really wanted this phone badly now I'm so hurt. Does anyone else have this high down payment. I been a loyal customer for over a decade, and I jump every year I never had a down payment this high!!

stevetjr
Userlevel 3
Badge +7

It's is really $279 down plus tax, but as mentioned above the most T-Mobile will finance on EIP is $720 (= $30 x 24 mo) so when the phone is $999.  It was the same with the Note 8 and the S9+ if you look at the retail price - $720 = down payment (plus tax).

J

How is T-Mobile going to know your history with other carriers? The reason why you may have a "better" deal is because you do have history with them like you said.

That’s not at all true I’ve been with T-Mobile for going on 22 years and my parents as well and both of us have outrageous down down payments I need to upgrade my XR  and I was looking at the 12 pro max 512gb it’s a 1400$ phone they want a down payment of 1057$ before tax why bother doing installments then 

J

How is T-Mobile going to know your history with other carriers? The reason why you may have a "better" deal is because you do have history with them like you said.

That’s not at all true I’ve been with T-Mobile for going on 22 years and my parents as well and both of us have outrageous down down payments I need to upgrade my XR  and I was looking at the 12 pro max 512gb it’s a 1400$ phone they want a down payment of 1057$ before tax why bother doing installments then 

And to further add to this point I was never a Verizon wireless customer and they want 400$ still high but a hell of a lot better then 1057$. And that’s with tax

L

in the same boat. came here to leave ATT (4 lines, 4 phones). my husband has a 750+ credit rating, we own a $300k house, we own several vehicles, have good very credit, credit cards, etc. all paid on time.NO ISSUES WITH OUR CREDIT!

JUST WANT TO LEAVE ATT! we pay almost $300 a month on our plan with ATT and have 3 phones on contract with them. they just raised our rates AGAIN and i can’t stand it anymore.

TMobile wants to charge us almost $700 a month for a freaking deposit!?! plus i have about $1,000 i have to pay to ATT to pay off the phones (since TMobile doesn’t REALLY pay off the phones - they only credit your account with them). I have 3 phones, less than a year old trading in, all in excellent condition - just want to leave ATT.

NO WAY IN HELL will i pay almost $2k just to switch to a company who i don’t even know how reliable their service is and even if they correctly honor the phone trade ins (seen alot of negative comments on that)

guess i will just stick with ATT. I will pay off our phones and just upgrade there. it will end up costing me less money in the long run since i will only be saving about $30 a month with TMobile anyway.

a shame. i have been a customer with ATT for almost 30 years and looking to be with a company who might better treat and respect their customers - but oh well. 

hey - at least TMobile showed me UP FRONT before even bothering that “the grass is not always greener”...

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