We all buy smartphones for our day to day life today. We all need those devices to stay up-to-date with the latest trends. And so, every couple of years, we purchase a new phone for ourselves and start using it. What happens to the old phone? Some people keep using their old phone as a secondary device, while some throw it away. Some people sell their old phone to make some money out of it. When selling an old phone, these people ask the same question, “How do I calculate the resale value of my old phone?”
We looked into it, and found there’s is not much information available on the internet too. And so we decided to share the insight that we have to offer. This ultimate guide to finding out smartphone resale value will surely help you fetch a very good and justified price for your old, used mobile phone.
It is rather easy to find out how much your phone’s worth would be after some time of usage, unlike what impression we have of it.
Let’s take a look at the pie chart above. The chart explains how a phone’s value decreases, taking into account the top 5 factors that contribute to depreciation. To calculate your phone’s resale value, follow the step by step procedure in a clock-wise fashion.
The resale value of the phone would go with considering the following factors, every factor will give you a different value, and then taking the average of all the values obtained:
- The value of a phone reduces approx. 29% per year. Older the phone lower the resale value.
- The value of your phone will reduce by a factor of (0.16 x brand reputation)
(give a smaller number to the z value for a more reputed brand)
- Every defect reduces the value of the phone by 25%. More the defects in your phone, lower the value.
- The more the successors to your phone from the same brand, the lower the chances of getting a good resale value.
- The more the competitors in the brand new segment, the lower the chances are of getting a good resale value.
Let’s take an example You purchased a Samsung Galaxy S8 for 2130 AED.
You wish to sell it after one year of use.
So, Depreciation Due To Age = 2130 – 29% = 1512 AED
Since Samsung is a reputed brand, let’s give it a value of Brand reputation = 1.2
So, Depreciation due to Brand = 2130 – 16×1.2 = 1721 AED
Let’s assume the phone’s screen is cracked, and camera isn’t working well. That’s two defects.
So Depreciation due to defects = 2130 – 25% minus more 25% = 1198 AED
Samsung Galaxy S8 has no successors yet. So, we’ll skip this step.
Samsung Galaxy S8 has only one competitor, the iPhone 7 Plus.
So, Depreciation due to competition = 2130 – 16% = 1789 AED
Now, we have four different values that have arrived because of 4 different factors. At the end if we average out the factors, we get the possible resale value for Samsung Galaxy S8 after one year
Resale Value = (1512+1721+1198+1789)/4 = 1555 AED
To find out details about how we came to this conclusion, keep reading.
About purchasing smartphones
The year 2005 came with a small but innovative package in the field of the communications department. An operating system had been developed for a mobile phone that could let people multitask on a phone seamlessly. This wasn’t new to phones in that era and multitasking was there. But a class of devices named Android Phones changed the way we look at a phone. In 2007, Apple brought the iPhone and brought about the much-anticipated revolution in computing and consumer relationships.
As a result, over 70% of in-use phones today are smartphones, from multiple companies, running a different operating system, with various configurations and features.
Today, most of the world uses a smartphone and depends a lot on it. Every day, we find something or the other being launched in the market that caters to needs and desires revolving around them. And with it comes the need to stay updated, not just with the world but also with the way we interact with the phone, to increase the efficiency of using the device.
Once we get a better device to buy which suits our needs in the best possible way, we switch to it. While we may keep using the old phone, or throw it away altogether, there’s another option that all of us explore. That is of selling the old phone. While selling your old phone, you’ll, of course, want to get the best price for it. But not always do we get happy with what we get while selling the old phone. Here’s a quick guide to understanding how much you’ll get whenever trying to sell your old smartphone.
Phone Resale Value Factors
This is by far the first and the foremost factor that affects the value of a phone when you’re trying to sell it as a second-hand device. The condition of the phone is the factor that is noticed the moment someone lays their eyes on it. The closer the phone is to a mint condition, the better the chances of getting a good resale price for it.
A phone in a perfect condition can fetch you a very good price for the resale. A perfect looking phone can ask for something in the range of 70-75% of the value of the brand new device.
The buyer will also look at the phone as a proper piece of hardware where they won’t have to spend anything on it and start using the phone as their own right away.
- Minor Damage
In case of minor damages, there are a few things the prospective buyer will want to consider so that they can take off some value of the phone. These minor damages include scratches on the screen/back, tiny parts worn out, broken off etc. In short, an issue can be called a minor one if the damage is not enough to cause any discomfort in the usage of the phone and the phone can be used without any problem, barring the minimal damage.
A phone with minor damage can find a 60-70% percent value of a brand new phone. However, in case of damage, there is a lot of scope for a bargain. Keep your skills sharp.
- Repair Needed
For a phone with major damages such as a cracked screen, broken back panel, a depleted battery etc., this is a major setback for anyone trying to sell a phone in such a condition. A damaged phone will incur costs for repairs to the buyer, so the buyer would want to take that money off the cost you quoted. Be prepared to sell the phone for 60% minus the cost of repairs. There’s not much hope for you in trying to sell a damaged phone.
Years of Usage
As a phone gets older, its parts and software begin to become outdated. Given the current pace of development, any smartphone released today would be completely outdated by five years of usage. E.g. iPhone 4 was launched in June 2010, the phone is virtually of no use by the standards of today’s smartphones. You can find phones with better capabilities within 1000 AED today. Trying to sell an iPhone 4 in 2017 would be difficult, and finding the right buyer would be equally difficult, whereas doing the same with an iPhone 7 would be rather easy.
Value decreases by 29% every year in a compounded fashion
To calculate how much you will get while trying to sell a phone, you may simply decrease the current value of your device by 20%, and keep reducing it further by 20% with each passing year.
For example, you purchase a phone worth 2000 AED. After a year of usage, the phone’s value will become 2000 – 20% = 1600 AED.
After another year of usage, it will be 1600 – 20% = 1280 AED and so on…
Couple it with the condition of your phone. In pristine condition, you may directly ask for the amount of money calculated directly. In case of damage decrease the value accordingly.
A phone is not worth much after three years.
A phone becomes virtually outdated after five years of use. There are other phones already present in the market that beat your used phone in all parameters at half the prices. If you have used your phone for more than five years, try to find the best offer you can; It wouldn’t be very wise to expect much.
Current market trends
Also, just because someone is looking to buy a phone, and is exploring the options for finding a second-hand phone with great specs at a low price doesn’t mean they aren’t looking to buy a brand new phone themselves, given their budget. Do a little research, see the pricing trends on brand new phones in the market, to give you an idea, how much you’ll probably get.
Take a look at the average prices of other brand new phones with the same features. In case your expected price exceeds the price of a brand new phone with the same price, there’s a slim chance your prospective buyer wouldn’t look into it. When they do, be prepared to slash the price down, or they’ll go for a brand new phone in most probability.
E.g. Samsung Galaxy S5, came with 2GB RAM and 16GB internal memory in 2014; that’s only three years ago, and cost a hefty sum of money when it was launched. Today, phones like Moto G5 Plus can be purchased with more RAM and a better processor for less than one-third the price of the Galaxy S5. If you have a similar phone, look for the current trend and keep the cost of your phone accordingly.
Ideally, you should quote your phone at 85% of the price of the brand new phone you’re looking at. Since your old phone isn’t completely outdated and still functions well, the value of the phone cannot be completely decided by competition from the ‘brand new market’.
When looking to buy a second-hand phone, the reputation of the brand is another thing that matters a lot. Some brands have developed deep relations with their customers and have gained popularity based upon their post-sales customer service. This is similar to the fact that a Chevrolet Aveo has a different resale value as that of the Toyota Corolla. That’s because of the difference between the reputation of the companies. Similarly, a Samsung device may find better resale than an Oppo. If you’re an owner of a phone from a reputed brand, the chances of getting a fairly great resale value are much more.
Let’s take an example of the iOS powered Apple phones. Apple’s devices, in general, find better resale value than Android phones. Some factors related to this fact include a replacement warranty and replacement service from Apple. You can always exchange your old iPhone for a new phone. So the buyer would find no problem in purchasing even a second-hand iPhone 6, as they can always go out and exchange the phone after using for a year or so, and get another upgraded iPhone.
On the other hand, Android phones find lower resale value due to these reasons:
- Many phones in the market
- Tendency to slow down after more than two years to usage
- Cheaper phones use modest quality materials.
This is a very good reason for a buyer to prefer a new Android device as compared to second-hand one.
As much as the hardware is important, so is the software. Since smartphones are getting stronger with each iteration, so are the requirements of the software that runs on them. A later phone is more likely to support the latest features of the way we interact with our phones.
- Operating System
The operating system makes a lot of difference to the resale value of a phone. The price of used phones takes a dip when it comes to ‘less efficient’ operating systems. E.g. Android is coded in a way that causes some devices with inadequate RAM to begin lagging after a few months of usage. That is not the case with iOS and Windows.
- Age of operating system
A later OS is more likely to involve a better functionality and efficiency. And so, the newer the OS on your device, the better it is for you to be able to ask for a better price on your phone.
- Availability of updates
Even if your phone’s OS is old, there’s still a very good chance that it may receive updates in near/far future. If that’s the case with your phone, it’s a good news for you. An older OS cannot hamper your phone’s value.
- Working post years of usage
After a few years of usage, as the hardware starts getting older and older, the performance of phones begins deteriorating. As more and more years pass by, the phone’s OS too eventually gives up. If your phone’s OS is very old and no updates are expected, consider cutting down on your price.
Summary & Final Tips
In the end, what matters is the condition of your phone, the brand it belongs to, and the competition with a brand new. Always remember, you may never get the full value for your used phone. Once a phone comes out of the box, the value of the phone starts decreasing right away. As your phone gets older, it becomes more and more obsolete by the day. Remember, if you wish to sell your used phone, do it within three years of purchase, that’s when you get the best value for your once prized device.
Normally, a phone not older than two years can fetch you 60% of the brand new value in perfect condition. In case you have the original box and accessories too, in a great condition, you may even get up to 80%, but that depends up on the brand and the condition of accessories too; also the phone must not be more than a couple of months old. To get the best possible price for your phone’s resale, use your phone like a just-came-in-today device throughout its life with you. This will fetch you not only keep you satisfied about your phone throughout its life but will also fetch you a fair price when the time to part ways comes.