How to Get Out of AT&T iPhone Contract and Switch to Verizon Without Going Broke

Verizon iPhoneWith a $325 early termination fee required to get out of a two-year iPhone contract with AT&T, making the switch to Verizon when it starts selling the iPhone 4 on Feb. 10 can be painful for current iPhone owners.

But if iPhone owners act fast -- this week is probably best -- they can sell their iPhone on the secondary market and receive enough money to pay off the early termination fee, or ETF, and have enough money left over to buy a new iPhone 4 with Verizon.For every month into a two-year AT&T contract, $10 is deducted from the $325 early termination fee. Using an early termination fee calculator, it would cost $255 to get out of a two-year contract that started when the iPhone 4 came out in June.

Both providers charge the same prices for a new iPhone 4: $199 for 16GB version and $299 for 32GB version with a two-year service contract. The final tally for an iPhone owner of a little more than six months to make the switch? At least $455.

For people who want to make the switch to Verizon, selling their soon-to-be "old" iPhone now so they can buy a new one is one way to save some money. Websites such as Gazelle, eBay, and ecoSquid buy old phones.

Prices change daily at and other sites, so selling them now, or at least locking in a price now, makes sense. Gazelle lets sellers lock-in a price for 30 days, leaving just enough time to get a new iPhone at Verizon when they go on sale Feb. 10, said Kristina Kennedy, a spokeswoman for Gazelle.

As of Jan. 12, these are the prices Gazelle is offering for the iPhones in good condition.

iPhone 2G
Called the original iPhone, it was introduced on Jan. 9, 2007. It can no longer be bought at retail:
  • iPhone 2G 4GB: Up to $63
  • iPhone 2G 8GB: Up to $69
  • iPhone 2G 16GB: Up to $84
iPhone 3G
First sold July 11, 2008:
  • iPhone 3G 8GB: Up to $100
  • iPhone 3G 16GB: Up to $125
iPhone 3GS
First sold June 19, 2009:
  • iPhone 3GS 8GB: Up to $132
  • iPhone 3GS 16GB: Up to $167
  • iPhone 3GS 32GB: Up to $207
iPhone 4
First sold June 24, 2010:
  • iPhone 4 16GB: Up to $345
  • iPhone 4 32GB: Up to $430
The resellers sell them to iPhone customers who don't want a two-year contract with a service provider and instead want a monthly contract. Buying a new iPhone without a contract costs between $500 and $700, Kennedy said.

Verizon announced its deal with Apple on Tuesday, and within the first 24 hours of the announcement, the number of iPhones being sold on Gazelle doubled, she said in a phone interview with WalletPop. That's hundreds of phones, down substantially from the 1,500 phones that were sold to Gazelle in one day when Apple announced the iPhone phone last summer, she said.

The good news is that long lines aren't expected when Verizon starts selling the iPhone on Feb. 10. There's often a lot of hoopla surrounding the launch of a new Apple product, but rarely are there long lines when a new service provider starts offering Apple's products.

Aaron Crowe is a freelance journalist in the San Francisco Bay Area.
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