Can You Sell a Phone That Is Not Paid Off?

Are you ready to sell your old phone and upgrade to a newer model? If so, you might be wondering if you can sell a financed phone that still has a remaining balance. Can you sell a phone that is not paid off? The answer isn’t always quite as clear-cut as you might think!

If you still have monthly payments to fulfill, your contract terms could largely dictate your next steps. It’s important to understand your responsibilities and rights before selling financed phones to make sure you’re following the rules to the letter.

What Is a “Financed Phone”?

When a phone isn’t fully paid off, it means that you’re still tied to the payment plan you agreed to when you first purchased the device. In some situations, this means you have a lease or financing agreement with your wireless provider, like AT&T or Verizon. In others, it could mean that you’re still under contract with a third-party lender, such as Affirm. It could also mean that you’re making payments to a retailer or manufacturer (Best Buy, Apple, etc.).

Furthermore, the exact terms of these payment plans can vary quite a bit. Even among various wireless carriers, contracts have variable lengths and restrictions. While most carriers used to offer plans that only required twelve payments monthly, that’s no longer the case. For example, Verizon typically only offers three-year contracts these days, while T-Mobile‘s contracts last for two years.

No matter which of the above arrangements describes your specific scenario, there’s a common thread among them all: You don’t actually own your phone. Whether it’s locked by your wireless carrier or under contract with a lender, you’ll need to jump through some hoops to trade in or sell a financed device.

What Happens if You Sell Phones With a Remaining Balance?

In short, you can sell phones that aren’t paid off. However, there are some caveats. If the phone is still leased or financed, your original agreement to pay off the device is still in place. If you sell it without satisfying the terms of that agreement, the company can treat this as a breach of contract.

In this scenario, the company that holds your contract can add your phone to the nationwide database for stolen, lost, and unpaid electronics. This will make the device unusable on most wireless networks in the U.S.

In addition, they can send your account to collections. Not only will this negatively affect your credit score, but it could also become a huge hassle. Collections companies aren’t exactly known for sitting back and waiting for you to pay up, so you can expect near-constant phone calls and emails until you satisfy your end of the agreement.

Even in a best-case scenario, you’ll often be required to pay early termination fees if you sell your device before you finish paying for it. In short, carriers fund financing agreements to make money, not to make friends.

Cell phone payment plans are a form of unsecured credit, meaning there’s no collateral involved. Still, if you try to wiggle your way out of a contract without living up to your end of the bargain, both the device and your credit history could be at risk.

What if I Buy an Unpaid Phone?

If you purchase a phone that’s still under contract, you could face several difficulties. First off, the vast majority of carriers will check a phone’s International Mobile Equipment Identity (IMEI) number before activating it. Think of the IMEI as an electronic serial number that serves as a unique identifier. If the phone still has a remaining balance, the carrier will likely block its activation.

The phone could also end up being blacklisted if the original owner stops making payments on the device after they sell it. This is another scenario where potential buyers can be punished for buying financed phones, as the device would be useless on most networks.

What’s really unfortunate about these scenarios is that, often, the buyer did nothing knowingly wrong. There’s also a lack of options for these buyers once they realize they’ve purchased financed devices. Many peer-to-peer marketplaces like Craigslist and Facebook Marketplace operate “as-is” sales platforms that don’t guarantee the products sold. If the seller isn’t willing to help the buyer resolve any issues, the buyer might just be stuck with an inoperable phone.

Thankfully, you can take steps to protect yourself as a buyer. You can use services like CTIA (formerly known as the Cellular Telecommunications Industry Association) to verify a phone’s IMEI number before buying it. If the IMEI isn’t blocked, you should be good to go with your purchase.

How to Sell Financed Phones

The simplest option is paying off your remaining monthly payments before you sell the device. Once you’ve cleared the remainder of your balance, your carrier will unlock any locked devices and remove alerts from the IMEI database.

You can also look into trade-in programs with your wireless carrier or retailer. You might be able to roll over your outstanding balance into a contract for a new device. While this isn’t exactly “selling” your current phone, it is a way you can upgrade to a better device with a relatively smooth transaction.

In some situations, you can also sell a financed device if you fully disclose its financing agreement with potential buyers. However, this can lead to some very shady dealings, and any buyers who are interested in these phones are likely just using them for parts. After all, why would anyone knowingly buy a phone that isn’t fully paid off when they can easily buy one elsewhere?

Final Thoughts

At the end of the day, you can sell phones that aren’t paid off. You just have to be aware of the strings attached. Keep in mind that you’re responsible for satisfying your end of the phone’s purchase agreement — just because you sell the device to someone else doesn’t mean that your original contract magically vanishes into thin air.

Here at ecoATM, we require several layers of identity verification before we buy any electronic device, which helps law enforcement personnel catch anyone trying to sell stolen or lost phones. If your wireless carrier blocks the device’s IMEI number due to failure to pay your monthly installments, you may not be able to sell it at an ecoATM kiosk.

Selling Your Phone at an ecoATM Kiosk

ecoATM prioritizes transparency as much as we prioritize protecting our environment. We’ve helped recycle over 50 million smartphones and tablets so far, and our goal is to bring that number to 100 million and beyond. When you sell a phone to ecoATM, you can walk away with cash in hand and the knowledge that you made an eco-conscious sale.

We resell as many devices as we can and responsibly recycle the rest, keeping the e-waste stream to a minimum. Together, we can breathe new life into old electronics and reduce the overproduction of new devices. Visit your nearest kiosk today and experience the ecoATM difference for yourself!