The market trade-in value of the phone you're trading in is irrelevant.
AT&T is saying we'll give you $1,000 in bill credits over 36 months for your trade-in, but you have to agree to finance the new phone for the same 36 months.
If at any point in the 36 months you want to upgrade the phone that is being financed, you have to pay the balance of the installment plan, but you also forfeit the remaining bill credits.
It's AT&T's way of keeping you locked in for 36 months to get the full value of the $1,000 trade-in.
You’re 100% right. I just confirmed this with AT&T, Apple, and Apple Store Retail.
My situation: I bought the iPhone 13 Pro Max for $1099 list price in 9/2021, and received an AT&T “special carrier offer” upon trade-in of my iPhone X for $1,000. We didn’t have AT&T Next-Up (or whatever the heck it’s called) and instead, the payment—and the credit—are each split up over 36 months. So, this doesn’t mean (technically) that I’m only responsible for paying the $99 difference. Instead, here’s how the bill looks:
1/36th of the iPhone 13 Pro Max: $1099/36 = $30.53
— 1/36th of the Trade-In Credit: $1000/36 = $27.78
—————————————————————————————————
total bill: $2.75/month
If I wanted to pre-order the new iPhone 14 Pro Max tomorrow, I’d need to “pay off” my current iPhone 13 Pro Max. So, I’ve paid 12 out of 36 months right now (it’s been 1 year since the iPhone 13 Pro Max) — so if I only owe $2.75 a month, I’m on the hook for 24 months, so I should just pay AT&T $2.75/month * 24 months = $66, and I’m golden, right?
Wrong 
No — I’d have to pay the
remaining full-price balance on the phone. So if 1/36 of the iPhone 13 Pro Max cost is $30.53 (see above), then
I’m on the hook for 24 more months to finish the 36-month agreement: so that’s $30.53/month * 24 months = $732.72
due immediately to AT&T if I want to upgrade. That’s the “upgrade fee,” basically.
OK, so I asked AT&T—ugh, if I were to pony up $732.72 right now, that sucks, but at least I still get the remaining 24 monthly trade-in bill credits, don’t I? They’d just roll in slowly but surely over the next 24 months, just like they’ve done for the past 12 months, right?
Again, wrong No, I would forfeit any remaining bill credits. So I would pay the $732.72, but
I would get nothing back in return.
It sucks, but this is accurate information. Does this help?
The market trade-in value of the phone you're trading in is irrelevant.
AT&T is saying we'll give you $1,000 in bill credits over 36 months for your trade-in, but you have to agree to finance the new phone for the same 36 months.
If at any point in the 36 months you want to upgrade the phone that is being financed, you have to pay the balance of the installment plan, but you also forfeit the remaining bill credits.
It's AT&T's way of keeping you locked in for 36 months to get the full value of the $1,000 trade-in.
