Apple lease programs vs. carriers?

[maflynn]

So, now that I may be getting some iPhones sooner then initially expected, as we will now switch to VZW. I was looking at Apple's leasing program, and I'm a bit confused.

They will charge 32.45 where as ATT and VZW charge about 27 dollars for the same phone. Why would I opt for Apple's. The only advantage I can possibly see is that I get an unlocked phone.

In both cases, you need to trade in your old phone - what am I missing?

 

[zhenya]

Apple's program includes AppleCare+.

 

[maflynn]

Apple's program includes AppleCare+.

Oh, well that's a plus, but I guess they can build that into the program, since the intent is to trade it in annually.

 

[C DM]

I believe with Apple you get to upgrade every year, while that isn't the case with various other programs from carriers (for example with Verizon's there's really no trading in and just paying the phone off over 2 years and then finding another one again if you want).

 

[zhenya]

On AT&T they have different plans, but the one priced closest to Apple's allows you to upgrade every year even though you haven't fully paid for the phone yet. You just give them your existing phone back and get a new one.

It's worth noting that while these plans are a decent deal for the consumer, you should really commit to either trading in every year or keeping your phone for a while after it is paid off. Let's say you are on AT&T NEXT 12 which breaks the phone into 20 payments and allows you to upgrade after 12 months. Any month you keep the phone beyond month 12 is money out of your pocket unless you will keep it for longer than 20 months. You pay the same amount months 12-20 for what is now old hardware. So pick the plan that allows you to upgrade at the point you are likely to want to or plan on keeping the phone long enough to recoup some benefit of no phone payment.

 

[Lyons00]

Hi,
Wouldn't be cheaper to buy the iPhone at full price and sell your old iPhone? Is this correct?

 

[zhenya]

Hi,
Wouldn't be cheaper to buy the iPhone at full price and sell your old iPhone? Is this correct?

These lease programs actually just break the retail cost of the phone into payments. You can 'buy' the phone at any time by merely paying off the amount due. So when you upgrade, you can either turn your old phone in, or you can buy it out and sell it on your own. Yes, there is probably $100 or so to be made if you sell it yourself, maybe more for the 16GB models - but the trade-in is hassle free, allows you to keep your charger and cord, and is a lot closer in value for those of us who buy the larger capacity phones which depreciate faster on the open market.

 

[maflynn]

I believe with Apple you get to upgrade every year, while that isn't the case with various other programs from carriers (for example with Verizon's there's really no trading in and just paying the phone off over 2 years and then finding another one again if you want).

The last time I checked, ATT and VZW allow you to upgrade to a new phone, provided you pay at least 50% of what you owe, and trade in the old phone.

 

[C DM]

The last time I checked, ATT and VZW allow you to upgrade to a new phone, provided you pay at least 50% of what you owe, and trade in the old phone.

I believe AT&T still has some options, but Verizon has been changing theirs where it went from 50% to 75% and then last year they did away with that completely and just basically have the installment plan where you simply pay it off and that's it (no trade-in or anything like that).

 

[bpeeps]

These lease programs actually just break the retail cost of the phone into payments. You can 'buy' the phone at any time by merely paying off the amount due. So when you upgrade, you can either turn your old phone in, or you can buy it out and sell it on your own. Yes, there is probably $100 or so to be made if you sell it yourself, maybe more for the 16GB models - but the trade-in is hassle free, allows you to keep your charger and cord, and is a lot closer in value for those of us who buy the larger capacity phones which depreciate faster on the open market.

Interesting. Never knew this. So I could essentially pay the phone off and list it on Swappa without having to spend all the money for it at once.

 

[ToroidalZeus]

Apple's lease program includes Applecare+. That may be a perk or con depending your preference. (For me personally it's a con since it's cheaper to just replace the broken screen.)

Carriers financing programs are essentially 2 year contracts. If you want to switch carriers you'll have to pay off the balance of the phone. So they really limit your mobility. For this reason I think Apple's program is better.

It's worth noting that while these plans are a decent deal for the consumer, you should really commit to either trading in every year or keeping your phone for a while after it is paid off. Let's say you are on AT&T NEXT 12 which breaks the phone into 20 payments and allows you to upgrade after 12 months. Any month you keep the phone beyond month 12 is money out of your pocket unless you will keep it for longer than 20 months. You pay the same amount months 12-20 for what is now old hardware. So pick the plan that allows you to upgrade at the point you are likely to want to or plan on keeping the phone long enough to recoup some benefit of no phone payment.

It's best to buy the phone outright and then sell it yourself at the market value. The trade-in program is designed to skim resale value off you.

iPhone 6s 16GB is 32.50 a mo on NEXT 12. After 12 months you have paid 390 for the phone. If you trade it in and get a new iPhone then you'll spend another 390 next year.

If you buy the iPhone outright for 650, then a year later you can resale it for ~400. So net cost will have only been 250 a year. Financing costs an extra ~150 a year.

These lease programs actually just break the retail cost of the phone into payments. You can 'buy' the phone at any time by merely paying off the amount due. So when you upgrade, you can either turn your old phone in, or you can buy it out and sell it on your own. Yes, there is probably $100 or so to be made if you sell it yourself, maybe more for the 16GB models - but the trade-in is hassle free, allows you to keep your charger and cord, and is a lot closer in value for those of us who buy the larger capacity phones which depreciate faster on the open market.

Actually the 64GB model is holding the best resale value right now. A lot of people don't want the 16GB model anymore even on craigslist.

 

[nburwell]

Even though you pay a little more per month on Apple's program, I prefer it because not only is my iPhone unlocked, but I have the piece of mind of AC+, especially since I don't use a case on my phone.

 

[Tycho24]

Hi,
Wouldn't be cheaper to buy the iPhone at full price and sell your old iPhone? Is this correct?

YES!!!

 

[C DM]

YES!!!

You could still do that with financing options if you want to.

 

[aristobrat]

You could still do that with financing options if you want to.

Interesting. Never knew this. So I could essentially pay the phone off and list it on Swappa without having to spend all the money for it at once.

That's what I did last year on AT&T - used Next to 0% finance two $749 iPhone 6 (64GB).

Instead of paying $1498 upfront, I paid ~$83/month for them for the first 11 months, then paid off the remaining balance (~$585) on month #12 and sold them on my own.

At the end, it was no different then having paid full-price for them up front and selling them. It was just nice (for me) not having to pay full-price up front.

 

[ToroidalZeus]

You could still do that with financing options if you want to.

That's what I did last year on AT&T - used Next to 0% finance two $749 iPhone 6 (64GB).

Instead of paying $1498 upfront, I paid ~$83/month for them for the first 11 months, then paid off the remaining balance (~$585) on month #12 and sold them on my own.

At the end, it was no different then having paid full-price for them up front and selling them. It was just nice (for me) not having to pay full-price up front.

att next has a 15 dollar upgrade fee tho so it doesnt make sense to do both financing and then pay off full balance.

can't speak about the other carrier financing options.

 

[bpeeps]

att next has a 15 dollar upgrade fee tho so it doesnt make sense to do both financing and then pay off full balance.

can't speak about the other carrier financing options.

Easy for me to waive.

 

[aristobrat]

att next has a 15 dollar upgrade fee tho so it doesnt make sense to do both financing and then pay off full balance.

Agreed. If you can pay $649+ in cash up-front, or you have your own financing that lets you carry a starting $649+ balance for 11 months for less than $15 in interest (like a card with a intro rate), you can use those to save $15.

For folks that don't fall into those categories (and want to sell their phone at the upgrade point instead of trading it in), using Next for the 0% APR financing for the first 11 months should still save them money (even with the $15 fee) vs. charging $649+ on a regular credit card and paying the interest on it for the first 11 months.

 

[Jasmynp]

So, now that I may be getting some iPhones sooner then initially expected, as we will now switch to VZW. I was looking at Apple's leasing program, and I'm a bit confused.

They will charge 32.45 where as ATT and VZW charge about 27 dollars for the same phone. Why would I opt for Apple's. The only advantage I can possibly see is that I get an unlocked phone.

In both cases, you need to trade in your old phone - what am I missing?

Some carrier charge a one time or monthly membership fee for the upgrade program and that's not included in the price quotes online.

 

[bniu]

Apple's program is pretty simple. 24 month installments, trade in after 12. Includes AC+. If you cancel the AppleCare+, then you lose the right to trade the phone in. The bonus on top for Apple's program is that the phone comes 100% unlocked. No carrier contract, so you can jump from carrier to carrier.

 

[I7guy]

Apple's lease program includes Applecare+. That may be a perk or con depending your preference. (For me personally it's a con since it's cheaper to just replace the broken screen.)

Carriers financing programs are essentially 2 year contracts. If you want to switch carriers you'll have to pay off the balance of the phone. So they really limit your mobility. For this reason I think Apple's program is better.


It's best to buy the phone outright and then sell it yourself at the market value. The trade-in program is designed to skim resale value off you.

iPhone 6s 16GB is 32.50 a mo on NEXT 12. After 12 months you have paid 390 for the phone. If you trade it in and get a new iPhone then you'll spend another 390 next year.

If you buy the iPhone outright for 650, then a year later you can resale it for ~400. So net cost will have only been 250 a year. Financing costs an extra ~150 a year.


Actually the 64GB model is holding the best resale value right now. A lot of people don't want the 16GB model anymore even on craigslist.

Doesn't it cost you the "extra"$250 to buy the outright? Invest the $250 in the market and your ahead of the game.

 

[lordofthereef]

AC+, IMO, is apples way of squeezing a little extra cash out of everyone. I'd much rather lay out of pocket for repairs, should I need them. Adding AC+ to four phones represents $200 a year and I've never even had to use the service in all my years of owning these phones.

I'd consider Apple's option if they allowed me to opt out of AC+ (and reduced rates accordingly) or if they added loss/theft to their coverage.

 

[barkomatic]

If you go with the carrier financing programs do you get to turn in your iPhone and then upgrade to a different smartphone altogether -- such as a Galaxy? I guess that would be an advantage of the carrier programs for some people.

 

[aristobrat]

If you go with the carrier financing programs do you get to turn in your iPhone and then upgrade to a different smartphone altogether -- such as a Galaxy? I guess that would be an advantage of the carrier programs for some people.

Yes.

 

[I7guy]

AC+, IMO, is apples way of squeezing a little extra cash out of everyone. I'd much rather lay out of pocket for repairs, should I need them. Adding AC+ to four phones represents $200 a year and I've never even had to use the service in all my years of owning these phones.

I'd consider Apple's option if they allowed me to opt out of AC+ (and reduced rates accordingly) or if they added loss/theft to their coverage.

The reason they require it is it covers hidden damage if you turn it in.