I did not know that! I thought Apple was using some owned subsidiary for financing similar to what the auto manufacturers do for financing and loans through their dealership networks. Well, I got nothing then...Klarna probably just wanted the deal more.
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Apple Retires iPhone Upgrade Program for Klarna-Backed Leases
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The "balloon payment" has no profit in it. It's merely the difference of the cost of the device minus what you have paid in. Even Apple says the cost between this plan and paying upfront is the same.
My father paid $11,000 for his first house in 1950, a very nice Cape Cod. A Ford Custom cost $1,500 in 1950. An AMC Gremlin cost about $1,900 as late as 1970-71. Prices began to soar in this country with the first Arab oil embargo in 1973.
zilchfox
macrumors 6502
Right, which is where I state it’s a wash at the end of my comment. I’ll fix the initial part up.
You could do that if you need that mentally but better to just ride the interest free payments and make that big payment at the end. 0% interest means don't pay anymore than you need to while your money earns interest elsewhere.
sw1tcher
macrumors 604
Apple owns the iPhone, not Klarna. Klarna's just the financial institution handling the payments.
It's possible Klarna is making money behind the scenes from Apple, but there is no additional cost (i.e. interest) from the customer to Klarna.
LogicalApex
macrumors 68000
That's an ugly shift I wouldn't have expected from Apple. This is worse than carrier financing...
The user is leasing the device with no clear up front disclosure that I could see about the "final purchase price" that has to be paid at the end of the lease if they want to own the device free and clear. No insurance is baked into the lease even though the user can incur "damage fees". The user can end up paying more to "roll over" their lease into a new device. Sounds like a car lease debacle.
Very much unlike Apple. A shame to see them launch a program that makes carrier financing look pretty...
The user is leasing the device with no clear up front disclosure that I could see about the "final purchase price" that has to be paid at the end of the lease if they want to own the device free and clear. No insurance is baked into the lease even though the user can incur "damage fees". The user can end up paying more to "roll over" their lease into a new device. Sounds like a car lease debacle.
Very much unlike Apple. A shame to see them launch a program that makes carrier financing look pretty...
Smart phones are now a mature technology. I just bought my 5th iPhone 3 months ago. I find fewer meaningful changes between phones every time I have upgraded. I started with an iPhone 5, which I kept for just under 2 years, then to a 6s, which I kept for 3 years, followed by an Xs which I kept for another 3 years (that was the worst of any of them, despite being the most expensive), followed by a 13 Mini which I kept for 4.5 years. I last replaced it with an unlocked 17e, which I paid for in full minus my trade-in. My pattern is that I have kept each phone longer, and even though I have gone from pro-level (Xs) to regular (13 mini) to sub-regular (17e), each of these phones has gotten better and more powerful, and more reliable, despite being lower in the pricing levels. I plan to keep the 17e for at least 5 years and then buy the next one without leasing or without a contract. These phones can last a long time if taken care of, and I see fewer reasons to buy the higher levels, going forward. The lower the pricing level, the easier to buy in cash, and there are alternatives to leasing.
uiop.
macrumors 68020
Ugh, this is so disappointing. Can't stand the leverage the big three have over Apple. Fully unlocked and prepaid or bust.
k1121j
macrumors 68020
How so? I did not see that this cost any more than buying the phone outright? Actually if someone struggling put it on a credit card and paid interest they would be worse off.... Right?
1975 maybe. VW stopped selling the Beetle in the US (and most other developed markets) by 1977. And even in 1975 the Super model was well over $3000 (which would be in the low $20Ks in 2026 inflation adjusted money, about as much as the much nicer Chevy Trax now costs).
LogicalApex
macrumors 68000
It is a lease not a purchase. So fees are disclosed differently.
For instance, I didn't see the "final purchase price" listed on the website (I didn't actually complete a lease purchase) and that would determine any "fees". Just like when leasing a car you have two levers that are used to hide fees. The "Money Factor" and the "Lease Disposition Fee" (aka the cost to buy the car). Apple has confirmed a disposition fee.
So if the fold 2TB is $2700, and I want to upgrade every year I’d have to pay at least $225 a month on this new Apple upgrade program? Lol I very much prefer the old iPhone upgrade program. I really wish they had let the people already on it to keep it.
rgeiger97
macrumors regular
The Fold 2TB is going to be well north of $3,000. Last I knew the rumor was a 256GB fold was $2,500.
I usually paid in full for my iPhone up front. I usually get at least 3% cash back on a credit card from doing so.
I've never used buy now pay later programs like Klarna before. I've don't finance through a carrier unless there's a big promotion since I use unlocked phone overseas.
With this program:
Questions:
For my next phone that I purchase from Apple, I'd be deciding between paying up front for the entire amount and getting credit card rewards, or paying $35 more using a leasing program and keeping the amount of the payments in a savings account to earn interest?
I may also wait for a lower sale price from a third-party retailer, but certain BTO options are not available.
I've never used buy now pay later programs like Klarna before. I've don't finance through a carrier unless there's a big promotion since I use unlocked phone overseas.
With this program:
- I have to pay a $35 connection fee to T-Mobile.
- The phone is unlocked, unlike previous monthly payment plans
- I can choose to keep the phone at the end of the lease for the remaining portion of the purchase price.
Questions:
- With a iPhone 17 Pro Max with 2TB storage, it looks like I can pay $35 T-Mobile connection fee + $1400/2 years + $598.84 at the end instead of $1999 up front. Is that right? When is the sales tax paid? In California is it due with the monthly payment?
- Do I need to keep my T-Mobile post-paid plan for the entire period? Can I switch carriers?
- Is the carrier covering part of the financing costs? Is that why there's a carrier requirement? Or is Apple also helping to cover the cost like they do with Apple card interest free purchases?
- Is the only extra cost the required connection fee from the carrier if I have an existing line?
- Can I use a rewards credit card for the monthly payments? I thought Chase restricted such payments to buy now pay later programs.
- Does this show up as a new credit line on a credit report?
For my next phone that I purchase from Apple, I'd be deciding between paying up front for the entire amount and getting credit card rewards, or paying $35 more using a leasing program and keeping the amount of the payments in a savings account to earn interest?
I may also wait for a lower sale price from a third-party retailer, but certain BTO options are not available.
See, I would argue that no interest loans are ideal for those who do have the means to buy a product outright. Play it smart and that lump sum they would have paid can turn into a greater amount of money over time.
This strategy doesn’t come without risk, but that is why I argue low and no interest loans are great for those who are doing well financially. The risk is much lower for them.
IIGS User
macrumors 68000
To anyone who thinks they "own" anything. Try "owning" a house and not being able to pay property taxes on it. Which can be pretty exorbitant in many parts of the country you didn't think they could be.
Watch as the house you "own" is sold for pennies on the dollar to settle a tax lien a fraction of what it's worth. And if the county you live in is generous, you get the balance from the sale at the end. Which is no where near what the house was worth.
No. You really don't own anything. It is an illusion.
thebellnd
macrumors member
Legally the lease provider owns the device in any leasing arrangement. Apple state on their website that Klarna are the lease provider. You pay Klarna at the end of the lease if you want to keep it. And it sounds like you return the device to Klarna for inspection, if you don't want ownership.
mathiasinthe314
macrumors 6502
If I am reading this right, I'm not going to be able to trade in my current device on IUP this year and get a new iPhone, without paying mine off or opening a completely separate lease (making two payments for two devices). That feels like a rug out from under me.
I agree. These types of leases are bigger risks for those who can’t afford the higher home outright.
snackdog2000
macrumors newbie
Kind of a bummer if you are on the Apple upgrade program. You have to pay the loan then do a trade in rather than a trade in as before.
PBG4 Dude
macrumors 603
Own my vehicle outright and while I have ~12 house payments left, I could pay it off from my savings account if I really wanted to.
Yup. I have a no interest loan on my new car. I would NEVER pay for a car outright. That’s a huge chunk of money they could have been put to better use or invested. Same thing here. These types of loans are best suited for those who COULD afford to buy outright as there is a risk of paying more in penalty's and fees if something goes wrong.
They are much riskier and less recommended for those in worse financial situations. The problem comes when these loans are approved For those high risk individuals.
Absolutely agree but for some, just adding a little bit more each month and not having that "big payment" at the end is comforting. Either way, it doesn't change the cost of anything.