While a "contract" or installment plan removes the "hefty upfront cost," it essentially acts as a loan.

: Best Buy's Trade-In Program allows you to use the value of an old device as a "down payment" on a new contract phone, further reducing the monthly installment. The True Cost: A Long-Term View

: It is worth noting that T-Mobile ended its partnership with Best Buy in late 2023, meaning their contract-based plans are generally no longer available at these physical retail locations. Strategic Advantages of Buying at Best Buy

: Retailers and carriers profit because the long-term service fees far outweigh the initial discount given on the hardware.

: Retailers like Best Buy act as a "curated showroom". They offer a neutral ground where you can compare different carriers (Verizon, AT&T, and Google Fi) and their respective financing deals in one place.

Historically, carriers like Verizon and AT&T used "subsidized" contracts where a $600 phone cost $199 upfront in exchange for a locked-in two-year plan. Today, this has evolved into . Under this model, the full price of the phone is split over 24 or 36 months at 0% APR.

: If you want to switch carriers before the 24 or 36 months are up, you must pay the remaining balance of the phone immediately.