The bad part is that your phone plan might be
$400 per month, but somewhere in the contract it says $200 discount, normally $600 per month.
If you cancel early, they charge you the remaining term at the FULL price (e.g. $600 per month) plus a cancellation fee of $500 I believe.
The ONLY reason that you buy a new phone with a contract, is/was if you want the new iPhone and they reserved their stock for those who sign new contracts. Otherwise people had to wait 8-12 months to get the new iPhone. Also, what I did one year was I signed a contract, got the new iPhone and I sold my iPhone at something like 9k, which covered the 2 year contract plus the cost of the phone. But you can't do that anymore, unless Apple comes up with something amazingly new.
So, you can:
1) Buy new iphone from Apple store
2) Buy phone from Broadway or Fortress
3) Buy a used phone off forums (geoexpat, asiaxpat, facebook groups, etc.)
Then unless you need something special, get the unlimited data (3-5GB at fast speeds then slows) plan for something like $128/month.
Use phone that you purchased separately with the new plan.
Some carriers will give you about a $500-1000 discount on a new phone when you sign up the cheap plan and buy a phone through them. I think SUN mobile does this, so just ask if you want a new phone.