Cost and Warranty are the trade-offs. If you bring your own phone, you are limited to the 1 year and optional extended warranty.
If you buy your phone through the service provider you pay more but have an accidental damage or trade-in program for a replacement for usually one or two hundred Dollars.
Also when you purchase your phone outright you generally get less bloatware (pre-installed apps) from the service provider and your phone is unlocked and can be used with any carrier.
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