When i upgraded to my Note 3 i knew i would be paying a lot of money over 24 months and also knew that i could get the phone cheaper from a large list of companies but i dont have over 500 quid to spend on a phone all in one lump.
As for 2nd hand value, of course it isnt going to be worth as much as you paid for it, this is how 2nd hand markets work, they have to make a profit and to do that they will only pay a fraction of the value but still sell at a higher rate.
O2 say that you dont pay interest on that phone but price them a little higher so that they still make a bit on the interest free loan that they give you, it is how companies do business. I can gaurantee i know who you would go with if one company offered the same phone at a lower price but added interest on top and the other priced the phone at a price with no interest even if those prices ended up being the same after 24 months.
The prices at O2 might be a little bit higher but no matter where you buy a phone from it will still be worth the same at a 2nd hand shop like CEX etc.
