What happens when I buy a new phone.

You can either restore the iCloud backup to the new iPhone during setup, or Migrate data directly from the old iPhone to the new iPhone using Quick start.

See here: link->Transfer data from your previous iOS device to your new iPhone, iPad, or iPod touch - Apple Support

when setting up your phone for the first time, you’ll have an option to get your back up from cloud. Given you were using an iphone before and have back up on.