Can You Trade In a Phone That Isn’t Paid Off?

Trading in a phone can be a great way to get cash or credit toward an upgraded device, but what if you still owe money on your current smartphone? Can you trade in a phone that isn’t paid off? The answer isn’t always straightforward, and it depends on factors like your wireless carrier, financing plan, and where you want to trade it in.

It’s important to understand your options and potential roadblocks if you want to trade in a phone that still has payments left on its contract. What happens to the outstanding balance? Does its trade-in value play a part? What if it has a cracked screen or other damage? Thankfully, we have the answers to these questions and more!

Understanding Smartphone Financing, Carrier Locks, and More

Before examining your trade-in options, you should first know how phone financing works. When you buy a phone on a payment plan through a specific wireless carrier — like Verizon, T-Mobile, AT&T, etc. — you don’t actually own the device until you finish paying it off. Rather, the carrier technically owns your phone until you clear your remaining balance.

Wireless Carrier Locks and Their Effect on Trade-Ins

Most phones financed through wireless companies are carrier-locked, which means that they can only be used on that specific carrier’s network. You typically can’t trade in carrier-locked smartphones with third-party retailers or trade-in programs that require unlocked devices.

That said, in some situations, carriers and other retailers may allow trade-ins for locked devices, applying the remaining balance from the financed device on the new phone’s wireless contract.

How to Trade In a Phone That Isn’t Paid Off

As it turns out, there are a few different ways you can trade in a financed phone. However, you’ll need to follow the rules carefully.

Trading It In with Your Carrier

Usually, the easiest way to trade in financed or leased phones is through your wireless carrier. Various carriers often accept phones that haven’t been paid off through their official trade-in programs, but how they handle the outstanding balance can vary depending on your chosen carrier.

AT&T allows customers to trade in phones that are still under installment plans, but you might need to pay off at least a portion of the remaining balance before transferring ownership of the device. AT&T typically applies the trade-in credit toward your next device or monthly wireless bill.

With Verizon, you may be able to get an early upgrade option which allows you to trade in a financed phone, but only if you’ve already paid off at least half of its total value. Verizon may forgive the rest of the balance, but this depends on your wireless plan, which device you own, and other factors.

T-Mobile customers can trade in financed phones or tablets and roll any remaining balance over into the cost of a new device in the form of bill credits. In general, T-Mobile’s policies in this area are the most consumer-friendly of the “big three” U.S. wireless providers.

Trading It In with a Retailer

Apple offers trade-in programs for its own devices, and Best Buy is one of several reputable retailers with trade-in policies. Of course, these policies can vary for financed phones, so let’s take a look at the details to find out if you can take advantage of either of these programs.

Apple Trade-In

Apple does accept carrier-financed iPhones under its trade-in program, but you remain responsible for paying off the entire remaining balance with your wireless provider. Under this program, Apple will not pay off your installment plan on your behalf, so you can end up with two monthly payments — one for your new phone and one for the unpaid balance of your old device.

Best Buy

Best Buy’s program has several similarities to Apple’s, with one obvious caveat being that Best Buy also accepts devices from Samsung and other manufacturers. Like Apple, Best Buy won’t clear your old device’s balance with your wireless carrier. Instead, you have two choices: Continue making your regularly scheduled payments or pay off the remainder of the device loan before trading it in.

Selling It to a Third-Party Service (like ecoATM)

If you want to sell your fully paid-off phone for instant cash rather than store credit, ecoATM is always a great option. That said, we don’t accept any devices that are still under financing with a mobile carrier or manufacturer.

Here at ecoATM, we buy phones in exchange for instant cash at our 6,000+ kiosks located from coast to coast. But, since a financed phone is still technically owned by the wireless carrier until the payment plan is complete, we won’t buy it (and, to our knowledge, neither will any of our competitors).

In other words, if you want to sell your device at an ecoATM kiosk, you’ll need to pay it off first.

What Happens to the Remaining Payments on a Traded-In Phone?

If you trade your phone in before paying it off, the remaining balance doesn’t simply disappear (but wouldn’t it be great if it did?). There are several different scenarios here, so let’s briefly walk through each one.

Trade-Ins Through Your Wireless Provider

The mobile carrier might roll the balance of your old device into your new phone or payment plan. Some carriers might even forgive the remainder of your contract if you meet certain previously specified upgrade requirements. For example, if you’ve paid off at least half of the phone’s total value and your wireless plan allows you to upgrade your device, this might be an option.

With any wireless provider, if you cancel your service, you will need to satisfy all remaining payments immediately.

Trade-Ins Through a Retailer

In this scenario, you are still fully responsible for making the necessary payments on your old phone, even if you’ve already traded it in with a retailer. The trade-in value will not automatically apply to your remaining balance unless you find a deal that allows you to use the credit to pay it off.

Trying to Sell a Financed Phone Elsewhere

In general, devices that are locked to a specified wireless carrier have less resale value than unlocked devices that can be used with any mobile service provider. Some buyers may still offer to purchase a device with payments left on it, but you must disclose the outstanding balance upfront. If you don’t, you could find yourself in some very hot water, legally speaking.

How to Pay Off Your Balance Before Trading In Your Phone

If your phone is still financed and you want to trade it in for a different one, there are generally three different options for paying it off.

• Lump-Sum Payment: Most carriers will let you pay off the rest of your balance in full anytime you’d like. Contact your carrier or check their website to get the details on any potential payoff options.
• Upgrade Offers: With some carriers, you can access promotions that cover the balance on an old device if you upgrade to a new one on a new contract.
• Private Buyer Sales: If you have a phone with high resale value, it could be possible to sell it privately for a high enough price point to pay off your balance.

How to Avoid Common Trade-In Scams

When you’re trading in a phone that isn’t paid off, you need to be aware of scams and misleading offers. Some third-party retailers will promise to pay off your financed phone with a promotional deal, but they often have hidden fees or consumer-unfriendly contracts. Always read the contract in its entirety before signing anything!

If you sell a financed smartphone to a new buyer, you might be (willingly or unwillingly) participating in a scam yourself! If you stop making payments, the buyer’s device might end up blacklisted. You must disclose all details of your phone’s contract before you sell it.

Finally, there are some fake buyback services out there. Always avoid services that ask for your phone upfront — this might sound obvious, but you might be surprised by how clever some of these scammers can be!

Final Verdict

So, can you trade in a phone that isn’t paid off? The answer is yes, but there are plenty of limitations. Before trading in any device, double- and triple-check your carrier’s policies to confirm how they’ll handle the remaining balance. If you’re anything less than entirely certain, paying off the phone first gives you plenty of flexibility regarding where, when, and how you trade it in.

Once your phone is paid off, you can sell it at any of ecoATM’s 6,000+ kiosks! Our kiosks are located in popular retail stores and shopping malls across the country. Use the “Price Your Device” tool on our website and use the kiosk locator to find the most convenient ecoATM location for you. Your wallet will thank you, and you’ll rest assured knowing that you did your part to keep old electronics out of the e-waste stream.