Why You Should Sell Your Old Smartphone Every Time You Buy A New Phone

There's a very good chance you are sitting on a few hundred dollars worth of old smartphones.

A new study from Consumer Intelligence Research Partners says less than 20% of smartphone owners sell or trade-in their old phone when they upgrade to the latest model.

If you are one of the 80% of people that are just putting your phone in a drawer, you should really reconsider.

Last Friday, UBS put out a report on the state of smart phone upgrades. In its report, it included a chart showing the average selling price for the most popular premium smart phones.

An iPhone 5 is going for $225, according to Gazelle. A GS4 is going for $160. You can get better prices on Craigslist and eBay, but you have to work a little harder for it.

In the U.S., when you get a new phone, you generally re-up for a two year carrier contract. Your new phone usually costs $200-$300. What this means is that you could be getting your phone for free if you were selling your old phone! And if not free, then at a nice discount.

And yet, 80% of people are just sitting on the free money. Huge mistake, people!

Quick story about me: Over the weekend, I decided to jump from Verizon to T-Mobile.

The reason I jumped? Price.

Verizon was charging me $180 pre-tax for two lines using 6 GB of data. T-Mobile will charge me $120 for three lines, and one of those lines gets unlimited data, the other is 2.5 GB, and the third is 500 MB.

(In case you're wondering, so far T-Mobile's network isn't all that great. I've given up my Verizon LTE connection for a life of slower 4G T-Mobile speeds. But, you get what you pay for. If I really hate it, I'll bail to AT&T, or Verizon again.)

T-Mobile's cheap monthly plans weren't the only reason I jumped, though. T-Mobile was willing to pay my $193 termination fee from Verizon, plus throw me $206 for my 32 GB iPhone 5.

This is what pushed me over the edge, and convinced me it was worth switching. T-Mobile basically paid me ~$400 for my old iPhone, which, I should mention, had dents on the sides from dropping it a few times.

T-Mobile doesn't do traditional iPhone subsidies. I have an option of paying $650 for my iPhone up front, or $27.50 per month. So, I'm not getting $206 for the phone straight up. I'm putting that towards covering the cost of a new iPhone. Still, if I had kept my phone, then I'd be paying full price, which is silly.

The point of this quick story? Sell your old smartphone! Don't let the money just sit around!