Like all U.S. carriers, Sprint charges $199 for an iPhone 5, but is willing to buy back an iPhone 4s for $235, which means you can actually earn $36 by upgrading.
That’s exactly what I did though, truth be told, I wound up spending $299 for a 32-GB iPhone 5 and had to pay Sprint $70 to buy out the eight remaining months on my contract. Still, I did get that $235 rebate, which greatly reduced my cost of upgrading. That deal is still there as of today.
Even better if you sell your phone to a third party
Not all cellular carriers offer such a buy-back deal but there are companies that will buy your old iPhone for a surprisingly high price, but prices on used iPhones go down regularly so you may have to act quickly.
As of today, iPhone Trader Express was paying $280 for an iPhone 4s with a charger (and $250 with no charger). Both Gazelle and Nextworth were offering $250 — all of these prices are more than the cost of a new iPhone 5 at the subsidized price.
You also have the option of selling your phone on eBay or Craigslist or trying to find a local buyer. You might get more money, but it also involves more hassle than returning it to the phone company or sending it to a reseller like Gazelle or Nextworth.
Call your carrier
Of course, you do have to enter into a two-year contract and you’re not eligible for the $199 upgrade if you haven’t had your device for at least two years though, as I discovered with Sprint, you may be able to buy-out your contract early. Another option is to hand-down your service contract to a friend or family member if the carrier will allow it (some will). Call your carrier to find out what rules apply and never hesitate to ask. I have occasionally been pleasantly surprised to find carrier reps who were authorized to sweeten their deals a bit to keep my business.