Many people understand the value that can be obtained through purchasing a cell phone through a third party vendor as opposed to a cellular service provider.  Often, the flexibility offered by not being locked in a 2 year contract is plenty to convince someone to purchase a phone from someone other than their provider.  Something as simple as relocating across the country to an area where your current provider has less than stellar coverage can create a big headache (or big bill).

Some people get confused with all the options that many third party vendors have, though.  New phones.  Used phones.  Refurbished phones.  Phones that are unlocked.  Often there are various combinations of those attributes.  These are the sort of things that you have to be prepared to sort though when purchasing from an outside vendor.  However, the additional time taken up front is well worth it in the end.  Below I've briefly "defined" these attributes in hopes of educating the consumer a bit further.

Used Phones are exactly what they sound like.  Used cell phones have been purchased, at some point, by another person to use as their cellular device.  Even phones that are bought and returned unused must be resold as "used."  You'll find a wide variety of phones with the "used" tag in any condition from "like-new" to "I've seen better days."  If you're looking at a used phone, be sure to find one that is set up to work on your network as most used phones are still "locked" to a particular network (see below for more about unlocked phones.)

Refurbished Phones are phones that have been returned, usually due to some defect that the end user found.  Refurbished cell phones have been sent back to the manufacturer who has restored the phone to "like new" condition.  Refurbished phones have had any glictches repaired, have been cleaned, and are, for all practical purposes, in "new" condition.  These phones can often be found at discounts and, again, may be locked to one particular network.

Unlocked Phones are phones that can be "new," "used," or "refurbished" that eliminate the issue of being locked to a particular network.  Unlocked cell phones can be activated on multiple networks (not at the same time) because they have been altered to operate on several networks.  To activate an unlocked phone, all you need is a SIM card for the particular network you want to use the phone on.  Unlocked phones are a great alternative for the person that loses or breaks their current phone but doesn't want to either pay full retail price for a new phone or pay the cancellation fee associated with ending their contract prematurely.  Additionally, unlocked phones are convenient for international travel as you can often buy prepaid SIM cards for networks in other countries.  Instead of paying extraordinary international roaming fees to make calls during a business trip to Europe, you can slip a SIM card for one of the networks in your destination country into your unlocked phone and operate on their network for much cheaper.