A new phone for “$0 down” looks cheaper than paying a few hundred dollars for a used one today. Over three years it usually isn’t. This guide adds up what carrier installments, bill-credit deals and Apple’s new lease actually cost, then puts them next to a used phone you buy outright and keep or resell.
Quick Answer
Over 36 months, buying a used phone outright usually costs less than financing a new one, even after you count what each phone is worth at the end. Verizon finances a 256GB iPhone 17 at $25.83 a month for 36 months, or $929.88. On October 15, 2026, a used 256GB iPhone 17 averaged $741 in Swappa sales, and a 128GB iPhone 16 averaged $531, with no loan, no credit check and no carrier lock. Prices move daily, so check current Swappa prices before you decide.
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How Carrier Financing Works
When you “buy” a phone from Verizon, AT&T or T-Mobile with a monthly price, you are signing an installment agreement. Verizon and AT&T both quote phones at 0% APR over 36 months, so you pay the full retail price in equal monthly chunks with no interest.
Zero interest is real, but it comes with conditions:
- A credit check. Verizon sets a device finance limit from your credit history, and AT&T says $0 down requires well-qualified credit.
- A locked phone. A financed phone stays locked to the carrier until it is paid off. Verizon unlocks it automatically once the balance hits zero.
- The balance follows you. Verizon says disconnecting a financed line makes the rest of the balance due on your next bill, and AT&T and T-Mobile say the same balance comes due if you cancel service.
None of that makes financing bad. It means the monthly price is a three-year commitment, not a discount.
The Catch in Bill Credits
The “free” or heavily discounted new phone is usually full price, paid back to you as monthly bill credits. On October 15, 2026, AT&T advertised the iPhone 17 at a “price after up to $930 in credits over 36 mos,” and Verizon offered “up to $1,000 trade-in/promo credit applied over 36 mos.”
The credits come with strings:
- You need the right plan for all 36 months. Verizon’s device payment FAQ says your line must stay on Unlimited Ultimate for the full 36 months to get its best promotional discounts, and switching plans forfeits the rest.
- Leaving early ends the credits. AT&T says if service is cancelled, credits stop and the device balance is due. Verizon says paying off a device early also stops the credits.
- The plan premium is the real price. If the required plan costs $10 a month more than a plan you would otherwise pick, that adds $360 over 36 months. At $20 more, it is $720, which is most of the value of the “free” phone.
Are Carrier Trade-In Deals Worth It? walks through how trade-in credits get valued, and when they still come out ahead.
Apple’s Upgrade Program Is Now a Lease
Apple says its iPhone Upgrade Program “is coming to an end.” Its replacement, Apple Upgrade, is a lease provided by Klarna, and that changes the math. You make monthly payments, then return the phone at the end of the term or pay the rest of its price to keep it.
Apple’s own example: an iPhone 18 Pro 256GB with a $1,199 purchase price leases for $34.99 a month for 24 months, or $49.99 a month for 12 months, before taxes. Two years of payments add up to $839.76, and at the end you own nothing to sell. Other terms worth knowing:
- An iPhone lease requires an AT&T, T-Mobile or Verizon plan and cannot use a prepaid plan, though Apple says a leased iPhone is always unlocked.
- Ending the lease early means paying the remaining payments.
- A phone that isn’t returned in good working condition can trigger a damage fee.
- If you do nothing at the end of the term, the lease rolls month to month for up to six months.
A lease suits someone who wants the newest Pro model every year or two and would trade in anyway. For anyone who keeps a phone three years or more, ownership wins.
Total Cost: Three Paths Over 36 Months
The fair comparison counts what you pay and what the phone is worth when you are done. We do not know what any phone will sell for in 2029, so the table uses today’s average sale price of a phone the same age as a stand-in.
| Path | What you pay | Est. resale at 36 months | Net cost over 36 months |
|---|---|---|---|
| New iPhone 17 256GB, financed at Verizon | $929.88 | About $414 (a 3-year-old iPhone 15 256GB sells for $457 today) | About $516 |
| Used iPhone 17 256GB, bought outright | About $741 | About $285 (a 4-year-old iPhone 14 256GB sells for $315) | About $456 |
| Used iPhone 16 128GB, bought outright | About $531 | About $224 (a 5-year-old iPhone 13 128GB sells for $247) | About $307 |
Purchase prices are Verizon’s published installment total and Swappa’s average sale prices on October 15, 2026. Resale is estimated after Swappa’s 3% seller fee and PayPal processing. Treat every figure as an illustration: actual prices vary with condition, demand and the year you sell.
Two things the table does not show favor buying used even more. A used phone bought outright is not tied to any plan, so you can move to a cheaper carrier the day you get it. And the bill-credit path is not in the table at all, because its cost sits in the plan premium, which depends entirely on your carrier and plan.
At 24 months the gap is similar. After 24 Verizon payments you have paid $619.92 and still owe $309.96 before the phone is yours to sell. The used iPhone 17 path, sold after two years at today’s 3-year-old price, costs about $327 net. For how fast each brand loses value, see Tech Depreciation: How Fast Electronics Lose Value.
When Financing New Makes Sense
Financing a new phone is the better call in a few situations:
- You want the newest model on day one, such as an iPhone 18 Pro or iPhone Duo, before used prices have settled.
- The promo plan is the plan you would pay for anyway. If the required unlimited tier is already your plan, the credits are close to free money.
- You need to spread the cost and have strong credit. At 0% APR, financing does not cost interest. It costs flexibility.
- You want full warranty coverage from the start and plan to add AppleCare+ or carrier protection on day one.
If none of those apply, you are paying for convenience you may not need. This comparison is general information about published prices and terms, not financial advice.
Which Used Phones Give the Best Value
The best value is usually a phone one or two generations old. A 256GB iPhone 17 averaged $741 in Swappa sales on October 15, 2026, against $929 new from Apple: about 20% off for a phone barely a year old. Step back one or two generations and the savings get deeper.
| Phone | Avg Swappa sale price (Oct 15, 2026) | Why it’s good value |
|---|---|---|
| iPhone 16 | $531 to $699 | Last year’s flagship, years of iOS updates left |
| iPhone 16e | $369 to $556 | Lowest entry price into the iPhone 16 generation |
| iPhone 15 | $385 to $474 | A 3-year-old iPhone that still runs iOS 27 |
| Galaxy S25 | $415 to $507 | Samsung’s 2025 flagship at a used price |
| Pixel 9 | $366 to $407 | Google updates through August 2031 |
Ranges run from the smallest to the largest storage size with sales. For more on Apple pricing, see How to Save Money on Your Next iPhone in 2026 and iPhone 17 Price Increase: What It Means for Used Buyers. The category-wide numbers are in New vs Used Electronics: How Much You Save.
Before you buy any used phone, confirm it works on your carrier. Unlocked vs. Carrier-Locked Phones: What It Means When Buying Used covers what to check.
Frequently Asked Questions
Is it cheaper to buy a used phone or finance a new one?
Usually buying used. Verizon finances a 256GB iPhone 17 for $929.88 over 36 months, while a used 256GB iPhone 17 averaged $741 and a 128GB iPhone 16 averaged $531 in Swappa sales on October 15, 2026. Counting resale value, the used iPhone 16 path costs roughly $200 less over three years.
Are free phones from carriers really free?
Not usually. The phone is full price, paid back as monthly bill credits over about 36 months. The credits typically require a specific unlimited plan for the whole term, and they stop if you cancel, pay off early or change plans.
Does financing a phone through a carrier charge interest?
Verizon and AT&T quote phones at 0% APR over 36 months, so there is no interest. The costs are elsewhere: a credit check, a phone locked to the carrier until it is paid off, and a balance that comes due if you cancel service.
What replaced the iPhone Upgrade Program?
Apple Upgrade, a lease provided by Klarna. Apple’s example leases an iPhone 18 Pro 256GB for $34.99 a month over 24 months. At the end you return the phone or pay the rest of its price to keep it, and an iPhone lease requires an AT&T, T-Mobile or Verizon plan.
Can I use a used phone on any carrier?
A used phone works on any carrier whose network it supports, as long as it is unlocked or already on that carrier. Check network compatibility before you buy, and run an IMEI check to confirm the phone is clean and paid off.
Own the Phone, Keep the Savings
Add up the monthly payments, the plan you are required to keep, and what the phone will be worth when you are done. For most people that math points to a used phone bought outright, on whatever plan fits. The full picture of how used values hold up is in Used Tech Resale Value: The Complete Pricing Guide.
