Trade in

Extracted below from the FAQ section of Apple Trade In - Appl

"Can I trade in my current device when I join the iPhone Upgrade Program?

If you are currently a member of the iPhone Upgrade Program and wish to remain in the program, please do not proceed with Apple Trade In. After you upgrade and receive your new iPhone, we’ll arrange for you to trade in your old one. If you do continue with Apple Trade In, you will be responsible for both your outstanding iPhone Upgrade Program loan and the purchase price of any new iPhone you purchase through Apple Trade In."

Also read this section too from the above link...

If I buy a new device online with a trade-in, what kind of credit will I get?

• It depends on what you buy and how you pay for it.
• If you buy an iPhone, iPad, Mac, or Apple Watch and pay in full, we’ll apply a credit to your original payment method up to the total purchase price. For any remaining amount, you’ll receive an Apple Gift Card by Email.
• If you buy an iPhone using Apple Card Monthly Installments, Apple iPhone Payments, or the Verizon Device Payment Program and include a trade-in, your estimated trade-in credit will be applied directly to the purchase price of your new iPhone. Once we receive your trade-in device and confirm that the condition matches what you described, there’s nothing more you need to do. If it doesn’t match, your original payment method will be charged the difference in value. In that case, we’ll work with you to confirm that you still want to move forward with the trade-in.

There are two programs. The Barclay's payment plan and the Upgrade Program. Perhaps your friend is in the Upgrade Program where he can get a new phone every 12 months. The plan you have however, sounds like the finance for 24 months plan and in that plan, you need to pay off your loan if you want to get the newest phone.

Note that the Upgrade Program monthly cost is higher than the 24 month finance plan.