I remember when carriers not just locked the phones, they also had custom firmwares filled with bloat and customized skins and even locking down features and all that shit. For example, I had a Sony Ericsson K700i and it had a disgustingly customized FW on it, and aside that it was ugly, I could only play MP3 files that I purchased through Vodafone. Sending them via bluetooth (or even with IR) didn't work, the phone refused to play it back.

(Then of course I found out that Sony Ericssons were pretty moddable phones so I replaced the FW with an original one and that solved all my problems. For some reasons, the fact that I patched the FW with countless of VKP patches and even unlocking it with a patch, didn't void my warranty so whenever I fucked up the FW beyond my abilities to repair it or simply bricked it, I just sent it to Vodafone and they fixed it.)

And they did this even when Android became a thing. (Though, it was a Vodafone branded phone so... it was sort of OK. (technically it was a Huawei though, also pretty moddable phone))

When I left my company, I had to get a new phone. When I talked to the rep, the phone cost was essentially free with a contract.

The offer was that Verizon would pay for the phone over the course of three years.

So it's not financing so much as it was free with a contract. When I asked why this was, he said that it was due to how the market was. Everyone has a phone at this point so now cell service provides have to compete to keep people. So they are willing to pay for your phone so long as you are locked in with them.

Sometimes you can get a really good trade in deal. Just pay it off immediately and it will be unlocked, then you'll usually get bill credits for 2 years. You'll have to stay with that carrier for 2 years if you want the full discount but every month is you saving off of the full retail price, so as long as you plan to stay a few months anyway you're still saving.

Because a locked loader only really affects an absurdly small percentage of people.