Apple Retires iPhone Upgrade Program for Klarna-Backed Leases

[Lounge vibes 05]

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.

It’s literally on Apple’s website in the question and answer section.
Also, while you can absolutely do what you suggested here, I’m pretty sure it violates the terms and conditions. So you know, at your own risk etc.

 

[CarAnalogy]

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.

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.

One of the big three, prepaid not supported i.e., contract.

Perhaps you are able to immediately leave them, but you must select one of them to begin the program.

Same thing with Apple Card these days. Apple will no longer allow financing when using Apple Card without choosing one of the cartel operators.

I'm not dealing with them now and I never want to deal with them again, so even opening an account that I have to then deal with canceling is far too much unnecessary hassle.

 

[theeaglesfan005]

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.

I’m wondering for those of us currently on an iUP what happens in September

With the iUP you could upgrade after 12 payments by giving the phone to Apple and they mark the loan as complete

 

[KurtWilde]

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.

It could have just as easily been a Klarna stipulation for this arrangement.

 

[PBG4 Dude]

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.

I guess I’m old school, because I learned to save up for the things I want, starting with an Atari 2600 I bought with paper route money when I was 12. I saved up for 2 years for my latest laptop.

 

[gmanist1000]

I’m wondering for those of us currently on an iUP what happens in September

With the iUP you could upgrade after 12 payments by giving the phone to Apple and they mark the loan as complete

Ok so I found a link in the middle of this page that lets you log into your Upgrade Program account and it tells you the process. TLDR; pay the final 12 month payment, then switch over to the new lease program during purchase of the next iPhone.

EDIT: Here is the iPhone Upgrade Program link that tells you what to do to switch to the new Klarma program

iPhone Upgrade Program

Get a new iPhone every year, and the protection of AppleCare+ with the iPhone Upgrade Program. Buy now or visit an Apple Store today.

www.apple.com

 

[CarAnalogy]

It could have just as easily been a Klarna stipulation for this arrangement.

Maybe. Seems more like Apple to me though since they've been doing stuff like this for years now.

 

[neuropsychguy]

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.

Well, only if doing this with a phone. You can do it with other Apple devices.

 

[ab2c4]

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.

I think if a person "needs" a $3,000+ computer (using it to make money) then they can easily afford it. What you are saying sounds like more of a "want".

 

[DEMinSoCAL]

It’s literally on Apple’s website in the question and answer section.
Also, while you can absolutely do what you suggested here, I’m pretty sure it violates the terms and conditions. So you know, at your own risk etc.

It literally says nothing about a contract on the website or ther T&C section. It just says you must sign up and prepaid plans are not eligible. If you BYOP to AT&T, they do not obligate you to stick with them for any term.

For AT&T as an example, No-contract plans: If you bring your own phone or buy a device in full, you use a month-to-month plan and can leave anytime without a cancellation fee. [1]

 

[CarAnalogy]

Well, only if doing this with a phone. You can do it with other Apple devices.

Still don't really like this. For Watch, it seems kind of silly to finance payments like that and then expect a balloon payment of well over $100 at the end of the lease. Though thinking about that a little more, for Watch specifically it may make sense to lease and return considering the battery life.

For the Mac, it seems like just another way to justify Macs being the price of used cars.

 

[macman01101]

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

Well said. The APP (Apple Peasant Program) will trap a lot of poor people as well as middle class folks who shouldn’t be buying a new iPhone every year.

Many people are better off buying a used phone or used laptop.

 

[thelion7]

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.

So just to confirm my understanding as I think the article is worded weird as in one paragraph it contradicts itself.

"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."

Then it says

"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."

If I lease an iphone at $1,099 for 24 months at $31.99 at the end I could just pay the remaining $331.24 and own the device outright.

If not, I hand it back?

If so that's fair if you like to upgrade every year although I don't see the point now you can save a few hundred.

But if it's pay $767.76 over 24 months then pay $1,099 again to own the device at the end is a rip off.

Am I understanding this correctly or is the article worded funny?

 

[Rogifan]

I’ve been on the iPhone Upgrade program since it started. If you can afford a no-interest loan and monthly payments why not do it? And this probably will soften the blow a bit if new iPhones go up in price this fall.

 

[Stevez67]

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

The perspective that this is "interest free" assumes that the interest isn't rolled into the cost of the device up front. I assume that interest is part of the device cost and is shared by everyone who buys a device by any means, through this program or some other way.

 

[neuropsychguy]

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.

Not to get off-track, but while that's generally true, it's not always true. That is generally true when comparing repeated leasing with buying a car and keeping it for many years, but the cost difference is not always as clear as what you suggest.

A purchased car may eventually provide several payment-free years, but those years can also bring higher maintenance and repair costs, greater downtime, and more uncertainty, while a leased car is usually under warranty during the entire term. Leasing can also be competitive when the manufacturer subsidizes the lease, the vehicle depreciates unusually quickly, or the buyer would replace the car every two or three years anyway (not that I recommend that, but some people do that).

It's more accurate to say that buying and keeping a reliable car for a long time (at least 10 years) will usually cost less, but the exact savings of leasing versus buying depend on depreciation, financing, maintenance, repairs, insurance, mileage, and how long the vehicle is kept.

 

[ab2c4]

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.

Here is the thing, you aren't "purchasing" anything with this plan. You are leasing the devices....aka "renting". You don't own the devices.

 

[segfaultdotorg]

SAD! Now a bunch of people will be unable to upgrade. Thanks, Tim Apple!

 

[jonnyb098]

Klarna is the most trashy thing Apple could've done. Leasing phones now. Watch how high the prices will go. Soon $999 will be the starting base iPhone price. Pro will start at $1299 and Ultra at $1999.

And in a couple years you'll be able to finance your $199/ year Siri AI subscription. Because I promise something like that is coming. There have been hundreds of billions spent on AI and data centers with virtually ZERO return on investment. Get ready.

 

[macintologist]

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.

You are both right and wrong.
Yes the math is correct. Yes you financially gain by leasing.
But there is also psychology. With an attractive monthly price instead of a difficult up front payment, your brain is more likely to spend money on this product, versus simply keeping your old phone for longer.

That is the goal of these programs. To encourage you to spend. Personal finance is more psychology than math.

 

[Nekronos]

"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

This isn't bundling though, this likely has to do with the activation fee

 

[anshuvorty]

Apple doing the impossible - allowing you to rent the iPhone because it is so damn expensive now...don't fall for it guys!! save your $$$ and then buy it outright...these leases aren't worth it!!

 

[Drogba11]

I used to keep my phones in immaculate condition and sell them every year to recoup what I could towards my next upgrade. It got to the point where it was too much of a hassle. Too many lowballers, people asking to trade something for it and on top of that ever increasing selling fees, insurance required for shipping, shipping and packing costs. This is what pushed me to the upgrade program and it has worked well for me in that respect for the last few years. I'll continue to use it for this reason.

 

[DEMinSoCAL]

I’ve been on the iPhone Upgrade program since it started. If you can afford a no-interest loan and monthly payments why not do it? And this probably will soften the blow a bit if new iPhones go up in price this fall.

Makes sense to most people except the entitled rich who think most people shouldn't have nice things.

 

[DEMinSoCAL]

You are both right and wrong.
Yes the math is correct. Yes you financially gain by leasing.
But there is also psychology. With an attractive monthly price instead of a difficult up front payment, your brain is more likely to spend money on this product, versus simply keeping your old phone for longer.

That is the goal of these programs. To encourage you to spend. Personal finance is more psychology than math.

Anything in business is done to encourage you to spend. When a product is put on sale, it's done to encourage you to buy it when, at full price, you might not otherwise do so.