Apple Adds 36-Month Carrier Financing for Cellular iPads

[macdaddy43]

It is truly wild to me that people are financing smartphones and TABLETS the same length of some car loans. 3 YEARS to pay off a $1,000 device in insanity to me.

You will literally not even own the device for 3 YEARS. I just cannot even comprehend that this is the situation that we are in right now.

Anyone who is financing a tablet over 3 years is just wild to me. If you stop paying it for whatever reason, that has to hit your credit score, no?

 

[svish]

Good to have options for customers planning to purchase a cellular model.

 

[K.P.]

I get it, but don't personally support it. No judgement on those who do this, it may be your only way, but man, it's a bad idea.

 

[webkit]

It is truly wild to me that people are financing smartphones and TABLETS the same length of some car loans. 3 YEARS to pay off a $1,000 device in insanity to me.

You will literally not even own the device for 3 YEARS. I just cannot even comprehend that this is the situation that we are in right now.

Anyone who is financing a tablet over 3 years is just wild to me. If you stop paying it for whatever reason, that has to hit your credit score, no?

Plenty of people keep their devices, especially tablets, for at least three years. We're also talking about 0% financing in this case which is essentially "free" money (assuming there isn't a lower cash price option) for those three years. Even if you can easily afford to pay cash, it can make more sense (and cents) to finance if your money is earning more (after taxes) than what the finance charge/costs would be.

 

[4look4rd]

If you need to finance an iPad for 36 months, you're too poor to buy one, and you'll be even poorer if you take that deal.

 

[4look4rd]

Plenty of people keep their devices, especially tablets, for at least three years. We're also talking about 0% financing in this case which is essentially "free" money (assuming there isn't a lower cash price option) for those three years. Even if you can easily afford to pay cash, it can make more sense (and cents) to finance if your money is earning more (after taxes) than what the finance charge/costs would be.

The problem is that the people taking these 0% financing deals are also the people that are already underwater.

This is a very common late stage play. When sales slowdown, you provide financing options with ever looser loan standards.

The fact that it's a 0% loan is frightening, it's a subsidized subprime loan to move inventory, and what can go wrong once those people start defaulting on their loans?

The same person buying an iPad on 36 months, is likely also paying for their groceries on Klarna, and it's a matter of time until they are underwater. This is a sign of deeply unhealthy underlying economy.

 

[turbineseaplane]

How is it not already a rental program?

You're not wrong. Good point.

 

[gummybear2026]

Incoming 48 month carrier plans for iPhones.

 

[turbineseaplane]

We're also talking about 0% financing in this case which is essentially "free" money (assuming there isn't a lower cash price option) for those three years.

As the sale price threads here always remind us, there usually is, not even counting preowned.

 

[locked_0ut]

This feels like an auto dealership. Shop for a new car, you are hit with a markup price and fees. Because you cannot afford it, they will extend the length of your loan.

 

[webkit]

The problem is that the people taking these 0% financing deals are also the people that are already underwater.

This is a very common late stage play. When sales slowdown, you provide financing options with ever looser loan standards.

The fact that it's a 0% loan is frightening, it's a subsidized subprime loan to move inventory, and what can go wrong once those people start defaulting on their loans?

The same person buying an iPad on 36 months, is likely also paying for their groceries on Klarna, and it's a matter of time until they are underwater. This is a sign of deeply unhealthy underlying economy.

As I stated in a previous post in this thread, "If someone can't afford to pay cash for the item then perhaps they shouldn't finance it."

My point was simply that financing a purchase can be a reasonable financial move. Plenty of people who can easily afford to pay cash still finance when the APR is lower than what they can get (after taxes) from investment/interest returns.

0% is a way of offering a "discount" (of the interest charge) on the product. 0% APR has been an incentive used on tech devices for a while.

Some luxury/image brands prefer using low APR, if they use anything at all, instead of price discounts as they feel straight discounting their product may "cheapen" it.

 

[webkit]

As the sale price threads here always remind us, there usually is, not even counting preowned.

In situations where a new iPad (or other device) can he had for less elsewhere then buying from Apple becomes less financially beneficial, whether you pay cash or finance.

 

[webkit]

This feels like an auto dealership. Shop for a new car, you are hit with a markup price and fees. Because you cannot afford it, they will extend the length of your loan.

This has been true for a while and not just with cars. Until around the 1960s or so, 20 year mortgages were the norm and then 30 year mortgages became the norm. For cars, 36 month terms used to be the norm and now it's closer to 70 months. Unfortunately, instead of buyers taking advantage of the longer terms to lower their monthly payments and live more affordably they choose to buy more and more expensive houses, cars, etc. in part because that's what others are doing and it becomes about keeping up with the Joneses.

 

[Happy_John]

Add this in Poland

With Polish interest rates? Forget it.

Paying in installments / leasing only works in Poland if you are registered as a business, and you offset the monthly payment against income tax.

As a private individual, it's crazy. A much better option in Poland is to be a member of a credit union (SKOK), and then you can get below Polish Central Bank rates. In certain cases, if you have paid in via a work scheme, you can get 0% interest loans. Teaching staff in schools often have such a set up amongst themselves.

No phone carrier in Poland will give you 24 month contract with phone /tablet etc. without adding on sizable interest.

 

[WilliApple]

I don’t want my tech to be a car please…

 

[artifex]

You will literally not even own the device for 3 YEARS. I just cannot even comprehend that this is the situation that we are in right now.

Uh, what now? Are we supposed to replace tablets every year or two?

 

[Gorlammi]

BestBuy is offering their members right now 36 month zero percent financing, even on items that are marked down on sale. I just have a hard time seeing what is bad about taking advantage of someone else's money for 3 years for free, especially in these times (in the US).

There is nothing bad about it, especially if you can't part with multi-thousands right now, but can easily part with $50-$100 a month. If you can't afford that monthly payment for the foreseeable future that is a different conversation, and not what we're talking about.

It makes MORE sense to take advantage of the 0% interest financing than it does to pay up front. For so many ways.

 

[Complex757]

and to think if you had financed a Apple Watch Ultra for three years when it first released your reward for paying it off would not be receiving anymore updates.

 

[Apple_Robert]

In my opinion, financing a phone is a terrible idea. Pay in full or don't get the phone until you can buy payment free.

 

[Johnny907]

I knew this was coming. Called it! 🙂 If you have to finance an iPad though, you might want to take a step back for a minute and think about your financial situation.

I financed my Pro through my cell carrier, but only because it was an end of stock deal that worked out to $5/month.

Completely agree with your other point though: they had to do this now that even the Air is stupid expensive. I had no plans of getting rid of my M2 Pro but now I feel even better about holding onto it 😁

 

[icwhatudidthere]

There is nothing bad about it, especially if you can't part with multi-thousands right now, but can easily part with $50-$100 a month. If you can't afford that monthly payment for the foreseeable future that is a different conversation, and not what we're talking about.

It makes MORE sense to take advantage of the 0% interest financing than it does to pay up front. For so many ways.

Exactly. People don't understand opportunity cost and time value of money.

 

[clg82]

It's a 36 month, interest-free purchase. After 36 months, you've spent the same amount as if you bought it outright.

Now with people who can't afford $2000 out of pocket all at once, how is it bad?
For people who don't blink twice spending $2000 all at once, put that $2000 in an interest bearing account or invest it, make the zero interest payments for 36 months, and you wind up making money, yes?

Those same people have 5-10 other things financed with higher interest rates because they have no comprehension of how credit works.

 

[BP9906]

It's funny how people look at 0% stuff and don't see the whole picture.

They are making money off of it/you one way or another or they wouldn't be doing it.

Just "think" about the possible ways .. and then know there are even some others not being realized.

Question is… does the carrier financing require monthly cellular charge? Probably.

 

[Apleeseed84]

Question is… does the carrier financing require monthly cellular charge? Probably.

Since the financing comes from Apple, it can be said they pay 500-600 for like an iPad Pro 2tb(just an estimate) and the MSRP difference would factor financing costs now. Apple is not obviously a cellular carrier, but pretty sure cellular models would be locked to actual carriers, who will milk you dry from using their plans if need be. I imagine if you default on payments, they would just disable the IMei from being active elsewhere and be stuck with wifi.

They’ll probably have some clause that explains it better, but it’s reverse cellular financing plan because you finance the device through the carrier already paying apple in full, but they make money on cellular services, etc as part of their contract.