A word of warning. If you do buy a brand new phone off someone check first that it was not a phone the guy got with his contract. Legally a phone as part of a contract is not yours, part or whole, until you have paid that portion of your contact in full. The contract specifically states that the device is fully owned by the network during the initial period. Selling it is actually illegal as it is not yours to sell.
How the contract is structured you pay a monthly device charge. This is for using the device and not an installment on the device. At the end of the initial part of the contract (ie 24 month), the network will rather give you the device than incur the cost of recovering it. If you read the contract carefully it never states that the device charge is an installment against the device. It also never specifically says that they will give you the device. It just says they remain the owner of the device during the initial period.
Just something to consider. I doubt that the networks would ever take legal action, but they do have every right to. I think it is part of their protection where devices are heavily subsidised on the contract.