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Upgrade to New iPhone for Free — Really

If you’re in the market for an iPhone 5, experts say it’s best to lock in a trade-in price for your iPhone before today’s announcement.

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Three out of four current iPhone 4 owners plan to buy the iPhone, according to a survey from deal site TechBargains.com. That’s a lot of old iPhones coming into the market. As we’ve previously reported, that kind of glut has made trade-in prices fall as much as 25% during previous releases.

Spokesmen from sites including Gazelle.com and NextWorth.com said the best time to lock in was mid-August. But in many cases, current prices still eclipse carriers’ subsidized prices for the handset — in other words, it’s possible to get back more than you initially paid for the phone , says Kirk Parsons, senior director of wireless services for J.D. Power and Associates. Here’s how it works: The $199 starting price the wireless carriers charge is just a fraction of the true cost of the device. Carriers factor in the price difference when setting plan rates and early-termination fees, helping them recoup the cost over the course of that two-year contract.

But shoppers will need to watch lock-in times. Amazon.com, for example, gives shoppers just seven days to send in their phone after getting a price estimate, while NextWorth.com has a 21-day period before an offered price expires.

Keep in mind that requirements to get the best trade-in price vary by site. Some knock off a few dollars if you don’t send the charger or haven’t cleared your personal information off the device; all of them assess scratches, cracks and functionality. Most also vary pricing by carrier.

Here’s a selection of current trade-in prices:

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