Trade-in offer costed me more?

tdc wrote:

I had this same question with a similar promotion (slightly different numbers, but the same issue). 

In my case: iPhone 11 trade in valued at $190. New ("free") iPhone 13 costing $800.

So $800-$190 credit was $610 remaining, which over 24 months came to a $25 credit each month. That left $8 each month, which was billed to me.

That all made sense when phrased that way. But here's where I was getting confused:

If I received $190 initially but also end up paying $190 over 24 months, wasn't that a wash? So I didn't receive 190 (whether it paid my bill or my equipment is irrelevant) if I ended up paying 190.

0 + 190 - 190 still equals 0, whenever and however the 190 was applied or charged.

So then my credit was really just the $610 ($25 monthly x 24 months). 

Then I (think) finally figured out where the confusion came in: the promotion is not a free iPhone PLUS the fair market value of the phone. You don't actually get to pocket the fair market value of the phone AND get the full price of the new phone credited to you.

It’s a free iPhone AFTER the fair market value of the phone is subtracted.

I think that finally makes sense to me...

That is accurate, it’s always FMV one time credit + Sum of monthly credits = Total Trade In value.

Also there is no such thing as "nothing up front" unless you live in a sales tax free state and the physical stores waives activation fees. You always pay these fees up front.

I've made the mistake looking at my monthly bill a few months after trade in and asking the same "WTF" question, but then I remember "oh yeah, I got xx FMW credit at trade in". Every time, the credits are 100% accurate down to the penny - which is trued up with the last payment and last credit.