Apple Retires iPhone Upgrade Program for Klarna-Backed Leases

[MacRumors]

Apple today launched Apple Upgrade, a new U.S. leasing program for iPhone, iPad, Mac, and Apple Watch. Apple partnered with Klarna for Apple Upgrade, and it replaces the current iPhone Upgrade Program and iPhone Payments.

Apple Upgrade has lower base prices than the iPhone Upgrade Program, with iPhones available starting at $17.99 per month and the Apple Watch available starting at $11.99 per month. Macs can be leased starting at $24.99 per month, and iPads start at $11.99 per month. AppleCare+ is optional and not included in the lease price, with customers also able to opt for AppleCare One.

There are 12-month and 24-month leasing options for the iPhone and Apple Watch, along with 24-month and 36-month leasing options for the Mac and iPad. Lease cost varies based on device, and is lower with a device trade-in that's applied on a monthly basis. Apple has some sample pricing, minus taxes and trade-in credits:

• 256GB iPhone 17 Pro ($1,099) - Typical monthly payment is $31.99 with a 24-month lease or $45.99 with a 12-month lease.
• 42mm Apple Watch Series 11 ($399) - Typical monthly payment for a 24-month lease term is $11.99 per month, or $21.99 for a 12-month lease term.
• 256GB iPad Pro ($1,199) - Typical monthly payment is $24.99 for a 36-month lease term, or $31.99 for a 24-month lease term.
• 16GB 14-inch MacBook Pro ($1,999) - Typical monthly payment is $38.99 for a 36-month lease, and $53.99 for a 24-month lease.

When leasing an iPhone, customers are required to choose a plan from AT&T, Verizon, or T-Mobile, and prepaid plans are not eligible. iPhones need to be leased with a carrier plan, but the iPhones are unlocked so customers can switch carriers if desired. MVNOs like Mint Mobile or Visible are not supported.

At the end of the leasing period, customers can choose to return the device and exit the program, pay off the remaining amount owed on the device with a one-time payment and keep it, or return it and upgrade to a new device with a new lease.

The payoff amount is the difference between what was paid during the leasing period and the retail price of the device, minus any remaining trade-in credits. Klarna is not charging a fee for the leasing program, so an iPhone that's $1,099 can be leased and then purchased for $1,099 with no extra cost beyond taxes.

As with trade-ins, Apple will send a pre-labeled and prepaid shipping box for device returns or upgrades.

If you don't opt to pay the purchase fee at the end of the leasing program, you will not own the device and must return it.

Apple is discontinuing the iPhone Upgrade Program, and iPhones can no longer be purchased with it. Current participants can continue to make payments until their existing iPhones are paid off, but at the next purchase, they will need to switch over to Apple Upgrade or another payment option. Apple Card users can continue to buy devices with the Apple Card Monthly Installments plan or choose Apple Upgrade and get 3% Daily Cash back on lease payments made with Apple Card.

Apple Upgrade is available for online and in-store purchases. Customers can select their preferred leasing option, and after a soft credit check, get an instant approval from Klarna if eligible. Lease information like billing schedule, total price, and remaining payments can be managed in the Klarna app.

Most iPhones, iPads, Macs, and Apple Watch models are eligible for Apple Upgrade, but the program can't be used for iPhone 16, iPhone 16 Plus, Apple Watch SE, MacBook Neo, Mac mini, iPad (A16), and Studio Display purchases. Apple Upgrade cannot be used with EDU discounts, and leases aren't available for refurbished devices. Apple also excludes purchases made with the Apple Employee Purchase Plan and business, government, veteran, and military purchase programs.

Fine Print

Lease participants can opt to end a lease early and return a device, but Apple says there may be "substantial fees" for terminating a lease before the end of the term. The fee is the remaining amount of the lease, so terminating a lease three months early means paying the remaining three months. There is no fee for paying off a lease early.

Customers must upgrade, end the lease, or purchase the device at the end of the lease term. If that doesn't happen, the lease converts to a month-to-month lease for up to six months. Month-to-month payments will remain the same, but if there was a trade-in credit being applied monthly, it ends when the lease does, so payments could go up. At the end of the month-to-month lease add-on, customers will be charged the purchase fee.

Damage to an iPhone, losing an iPhone, or having an iPhone stolen could incur fees. Klarna assesses damage at return and charges accordingly. With AppleCare+, the cost is the applicable service fee, but without it, the full cost of the assessed damage has to be paid.

If a customer misses a payment, the payment is rolled into the next month's payment, but there are no late fees incurred. If there are three consecutive missed payments, the lease agreement ends and the customer has to pay the full outstanding balance minus the value of the device when returned. If Klarna is unable to collect payment, the case will be handed over to Klarna's debt collection agencies. Apple says Klarna support offers a one-month payment deferral and an early lease termination option with a repayment plan.

Leases are restricted to customers who are 18 or older (or legal age in their resident state) with a valid SSN or ITIN. Customers must be U.S. residents, and territories are excluded. An Apple Account in good standing is required, as is a Klarna account and a credit or debit card.

Availability

Apple devices can be leased with Apple Upgrade in stores or online starting today.

Article Link: Apple Retires iPhone Upgrade Program for Klarna-Backed Leases

 

[levitynyc]

"You will own nothing and be happy with it." - literally every corporation including Apple now.

 

[Lounge vibes 05]

“If you’re leasing an iPhone, you’ll need to connect to AT&T, T-Mobile, or Verizon when you enroll. You can lease an iPad, Mac, or Apple Watch without a carrier connection.”

Fail.
Some of us don’t want your big three slobber fests Apple.

 

[Mrkevinfinnerty]

So basically if anything happens ..

 

[neuropsychguy]

"You will own nothing and be happy with it." - literally every corporation including Apple now.

Or you can purchase it for the price difference at the end of the contract. That way you can own it and be happy (or not) with it.

Factoring in inflation and potential investment/interest returns, you can come out ahead rather than buying up front. It's basically a 0% interest rate loan. Plenty of people can afford to buy the device but will opt to "lease" (finance) instead. I do almost every time I buy an Apple product.

As an example. Assume a Mac is purchased for $2700 (taxes included). If you finance/"lease" over 36 months instead of purchasing up front (and assuming you keep the chunk of money you'd have spent in a high yield savings account or invested with typical returns), you will save anywhere from about $100 to $300 (or more) on that purchase. Now, this assumes you don't spend the money on other things and aren't just deficit spending/building up debt you can't pay off, but for those who have the money and the fiscal restraint, programs like this usually make more sense than just purchasing outright. It's good to have options.

Edit: There are downsides (not generally to Klarna or Apple); if you're someone who can't afford the device but uses this to buy something you want and don't need my advice is "Don't do it."

 

[noannualfee]

Cue the Klarna glitch tiktok videos on how to get free macs.

 

[wdowell]

"When leasing an iPhone, customers are required to choose a plan from AT&T, Verizon, or T-Mobile, and prepaid plans are not eligible."

Well thats certainly pretty lame. If this came to Europe/UK Id bet this isnt possible. For a start there are countries where bundling is illegal

 

[DBZmusicboy01]

Or you can purchase it for the price difference at the end of the contract. That way you can own it and be happy (or not) with it.

Factoring in inflation and potential investment/interest returns, you can come out ahead rather than buying up front. It's basically a 0% interest rate loan. Plenty of people can afford to buy the device up front but will opt to "lease" (finance) instead.

Not a terrible deal if it weren’t for forcing people to have to use a Postpaid Phone Plan.
All of us who uses prepaid are screwed even tho the old program also forced people to have postpaid.

 

[Lounge vibes 05]

"You will own nothing and be happy with it." - literally every corporation including Apple now.

You have never really owned anything, it has always been theoretically possible for your property to be seized.


And of course, you absolutely never owned the software on any of your devices.

 

[Spock]

Surprised to see the Vision Pro not on the program, that would have been a good way to get them in more people’s hands.

 

[rgwebb]

This reads like Apple was seeing an increasing default rate in their program so they found a desperate bag holder for when the crash happens.

 

[ab2c4]

The people that will probably do this are the people who are struggling financially, and will end up paying more in the long run.

 

[SoApple]

This isn’t any different than whats been happenning in Canada the last few years. Telecom companies have a “bring your device” back program. Essentially a lease with an option to purchase it at the end.

 

[Astuces iOS]

Meh no just no... just buy

 

[roncron]

Or you can purchase it for the price difference at the end of the contract. That way you can own it and be happy (or not) with it.

Factoring in inflation and potential investment/interest returns, you can come out ahead rather than buying up front. It's basically a 0% interest rate loan. Plenty of people can afford to buy the device up front but will opt to "lease" (finance) instead.

Yes, for people who intend to keep their iPhones, this is a way to spread out the cost over 2 years, interest-free.

But that option has always been available: you can buy an iPhone on a 24-month payment plan that's interest-free.

What's new about this Apple Upgrade program is the lease part. Leasing cars costs you more in the long run, but is tempting because it gets you into a new car every 2-3 years for a monthly payment that's lower than the payment you'd pay if you purchased the car with a loan. The Apple Upgrade program appears to be much simpler and more transparent than a car lease.

I guess I'm glad this option exists for those who might benefit from it, but it's not for me. With prices going up, I'll be replacing my iPhone every 3-4 years instead of every 1-2 years as I've been doing until now. So the 24-month interest-free purchase plan is the best option for me.

 

[gmanist1000]

I'm guessing they'll allow iPhone Upgrade Program folks to move over to the new Klarna lease thing before the new iPhones drop... at least I hope so! I'd hate to deal with that right when iPhone 18 sales start and end up missing out on launch day delivery.

 

[DEMinSoCAL]

For those without the means to purchase their dream Mac, a no fee/interest payment plan is perfect. This seems like a great option.

If you're religiously against having something you can't afford to pay for up front, this isn't for you. Seems pretty clear. Don't judge others.

But it seems like a win-win for many. It's very similar to buying a MacBook at BestBuy with their 24- or 36-month no interest plan which allows one to pay off a purchase over time for free.

 

[jsavvy]

This is to soften the blow for people who cannot or do not want to pay the full sticker shock price of Apple devices.

 

[CarAnalogy]

Or you can purchase it for the price difference at the end of the contract. That way you can own it and be happy (or not) with it.

Factoring in inflation and potential investment/interest returns, you can come out ahead rather than buying up front. It's basically a 0% interest rate loan. Plenty of people can afford to buy the device but will opt to "lease" (finance) instead. I do almost every time I buy an Apple product.

Except you must choose one of the three cartel network operators to be contractually obligated to.

This is another step in Apple handing power back to the cartel. There's no reason they have to attach it to one of the big three when Klarna is already financing everything.

 

[yukari]

Klarna assesses damage at return and charges accordingly. With AppleCare+, the cost is the applicable service fee, but without it, the full cost of the assessed damage has to be paid.

So do you have any recourse if you disagree with Klarna's assessment of damages?

Remember how Hertz rental car used laser scanner to assess exorbitant damage fees to their rental cars?
Will this be a similar tactic used by Klarna? Have their proprietary software run a diagnostic test on returned iPhone and spit out a damage report?

 

[DEMinSoCAL]

The people that will probably do this are the people who are struggling financially, and will end up paying more in the long run.

Either you're rich or just don't understand you don't have to be "struggling financially" to not be comfortable spending over $3000 upfront for a computer. Sometimes I think many people here don't realize how most people live.

 

[ProbablyDylan]

When leasing an iPhone, customers are required to choose a plan from AT&T, Verizon, or T-Mobile, and prepaid plans are not eligible. iPhones need to be leased with a carrier plan, but the iPhones are unlocked so customers can switch carriers if desired.

If the phones are unlocked then what's the point? Just to be inconvenient?

 

[DEMinSoCAL]

Except you must choose one of the three cartel network operators to be contractually obligated to.

Where did you read that the required plan needed to be on a contract? I didn't read that, and don't see any reason why it would be since the carriers aren't subsidizing these phones. If you want a cheaper plan elsewhere, sign up with one of the big three, and port out in a month.

 

[Lounge vibes 05]

Except you must choose one of the three cartel network operators to be contractually obligated to.

This is another step in Apple handing power back to the cartel. There's no reason they have to attach it to one of the big three when Klarna is already financing everything.

Completely agree. I have no idea what’s up with that other than back room deal making.
And the saddest part I’ve seen many people defend it already.
I genuinely think it’s easier to defend the maps ads than it is this.

 

[abatabia]

Lost me at klarna. I use Amazon device payments and that’s what I’ll stick to. Hard no.