I'm sure for 100% of mortgages people would love to just make a down payment and get the deed and not have to make any other payments for 15+ years but there's nothing ironic about the need to fulfill contractual obligations that aren't awesome for you.
I think the meaning was that most Americans resent that they are basically forced into a contract in order to get the plan and device they want. I would rather bring my own device, but the only carrier available to me (until recently) was Verizon, and they won't let me do that. So I (at one time) signed a contract, but I would have been happier to simply pay for the device of my choice and paid for service month-to-month.
To extend this to your analogy, I was forced to take out a mortgage despite having the cash to buy the whole house outright because the person selling the house wouldn't take cash.
Why can't you buy your own devices? I live in the UK and have always bought my own devices, it often works out at about half the price over the term of the contract.
UK (like most of the world) uses GSM. With GSM your identity is linked to your SIM card. Put your SIM card in another phone, and "you" are still "you" as far as the phone company can tell.
Verizon (and most of US) uses a competing "standard" called CDMA, where your identity is coupled to your phone. Which means you have to involve your phone company in order to switch phone.
It's technically possible to "unlock" a CDMA phone, but in the USA, CDMA carriers refuse to unlock a phone on their network. And even if you did get an unlocked CDMA phone, the providers will refuse to activate any phones that were not originally activated on their network.
I use Verizon and they are always more than happy to activate my CDMA capable phone for use on the Verizon network - which I have been using for a very long time and live contract free this way. I also use a very old completely Unlimited plan, so buying a phone from Verizon would cancel this plan and force me on a new contract.
Anyhow my point is I have no problems adding a personal device to my plan anytime - many times.
This is true, but mobile contracts are much murkier than mortgages, and this is by design of the phone companies.
Consider how much different things would be if people had month-to-month service contracts and they financed their phone upgrades separately (though the payments were rolled together). Imagine if people could just pay off their device debt, cancel their contract, and move to a new carrier. Or imagine if people could pay off their device debt in advance to avoid the interest payments. Or imagine if people could roll their old device debt into a new loan for a new device, and then carry that forward. It's funny how a phone company will give you $500 in financing for a new phone no problem but they outright refuse to give you $550 or $600.
I imagine most consumers would probably prefer a more transparent system like this, but the problem is that then they would see how much they are getting shafted. People are locking themselves in to $2k commitments when in reality they should only be committed to $500. Sure there's also service attached but a lot of people don't use a lot of cell data or make many phone calls. Most people could probably get buy on the cheapest virgin mobile plan, for example, which is just $35/mo.
So let's do the math. People who are locked into phone contracts due to their device upgrades are locked into about $1150 of extra payments. That works out to an effective APR right around 99.8%!
It's no wonder that phone companies like things the way they are, confusing and complicated. It allows them to charge usurious interest rates on device purchases without their customers fully realizing.
You know there are enough options in the market for what you are looking for. Why are you not exercising your options?
This is at the of the US market conundrum. There are enough options for people not to go for the big two. They cost more money, they give less freedom and still people flock to them. I just don't get it.
Yeah, but if you buy a house with cash upfront, you don't have to keep paying interest to a bank.
In contrast, if you do the analogous thing with a cell phone plan -- buy the phone upfront -- you still have to pay the implicit "interest" in the higher monthly fee. There's no option to take a lower monthly fee in return for paying upfront.
Some marketers noticed they can make people buy more if they stretch out the phone payment over 18 months and add it to the phone bill -- good!
They denied everyone else the option to save money over the long term -- not good.
> if you do the analogous thing with a cell phone plan -- buy the phone upfront -- you still have to pay the implicit "interest" in the higher monthly fee.
You can always choose an MVNO if you want to. They run on same network as the big 4, although they might lack some roaming options. (and access to LTE, if that is important to you)
You absolutely can in the UK. I pay £15/mo for the same service my friend pays £34/mo with a phone. He's in a 24month contract instead of my 12 and will end up some £150 down over the course of the contract.
The difference is that if you show up with cash you can still buy the house. You can pick your own bank, too.
If two people owned all of the houses in your city and colluded on pricing, types of houses available and only did business with their bank — then your comparison would be true.
One of the aspects of contract law, at least in my country, is that a contract is - in principle - supposed to result from a more or less equal bargaining procedure. Having an extremely strong bargaining position, and jamming it up to the hilt in someone's chest, is grounds for the contract to be held invalid here. It's called undue influence.
I believe there was a case a few years back where it was even specifically held that this invalidated a mobile phone contract because the woman couldn't predict the future as well as the phone company.
