Lending Club Blog

Grandfathered Deals

Taking advantage of a good deal is a smart thing to do, but holding onto that deal as long as possible is even smarter. As time passes, even mediocre deals can look better and better.

The types of deals that generally fall into the category discussed here are ones that have contract terms, such as cellular phone plans, satellite TV agreements, and things of that nature. The reasons these deals can be so valuable is that over time, services tend to raise the minimum amounts available and raise prices as well. By locking into a deal today, you could be saving much more money years from now.

Let’s look at a cell phone example. A basic plan a few years back might have offered unlimited in-network calling, free nights and weekends, and 300 anytime minutes for $30. Today, the most basic plan might offer you more text and picture messaging, 500 anytime minutes, etc., but might cost more like $50 per month. If you do not use all of the extra minutes and features of the new plan, you would probably be better off staying with your old plan.

What many people fail to realize is that you can often continue terms of service after your contract runs out. If you signed a 2-year agreement, you are locked into that plan for a full 2 years. At the end of that time, you don’t always need to sign up with a new contract at a higher rate or with more features. You can usually stay in your current plan at your current price indefinitely, as long as you don’t make changes or take advantage of a promotion, such as getting a new phone for free.

You can imagine how much you could be saving if you were still paying $30 for cell phone service 10 years from now. By that time, basic plans will surely cost more than $100 a month. If your plan still met your needs at that time, it would be foolish to switch. Staying in a low cost plan is like an investment for the future.

Such arrangements are possible in other services as well. A friend of mine signed up when the Dish Network launched. The company had a deal where you could choose any 10 channels (of the hundreds they offered) for $20 a month. If you think about your viewing habits, you may also only watch a handful of channels on a regular basis. It was a good deal at the time because many of the channels my friend chose would only have been available with a premium cable subscription, which would have cost about $100 a month. Dish Network quickly closed the deal to new subscribers, but my friend continued to enjoy it for many years.

As I said above, not all service contracts allow you to continue your current terms indefinitely. But many more than you might expect do allow it. So before you upgrade to a new service, when your current contract ends, consider if your current service can be continued if it is meeting your needs, or if the new and improved service will really be worth the extra cost.

Tuesday, June 24th, 2008 at 6:49 am

Comments (2)

  1. I’ve been able to get a better deal every time my cell phone
    deal runs out. If a cell phone company knows you are going to
    cancel your contract they will usually give you an incentive to
    stay.

    June 24th, 2008 at 11:35 am

  2. I have a locked in a fantastic deal — actually it came with my
    house. It is a contract with a nationally known pest control
    service that covers any termite treatments or damage as long as I
    continue to have a $25 annual inspection. It is also transferable
    if we ever sell the house. The contract is from more than 20 years
    ago and there is no way to get anything remotely close to it today.

    June 25th, 2008 at 9:03 pm

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