Apple's New Upgrade Program: Is It Worth It?

[lsatterfield]

I just spoke with a sales associate from Apple over text. I wanted to know what the “fee” (that they briefly mention on the site) to upgrade early to the new iPhone 18 Pro would be if I got the iPhone 17 Pro and wanted to upgrade early… Turns out, it’s really ******.

You have to pay off the full lease. That’s it. It’s like getting out of an apartment lease.

You have the phone for two months, the new phone comes out, and you either wait for your lease to end OR you pay 10 months or 22 months of payments before you can get the new phone and begin paying leases again.

That’s insane. Coming from a person who needs a new phone now but still wants to get the new-new one when it comes out, this is a terrible idea right now. Maybe once the 18 Pro releases, I’ll feel differently, but this in general is just terrible.

 

[triumvirate]

Why are so many people in these comments worried about what other people do? How does it change your life if a stranger makes a bad financial decision with their own money? Look, I don't care for Klarna either, or really any bank, lender, etc. but no one is forcing anyone to use Klarna or to lease a device. If you all care so much then please take that energy somewhere more constructive, get involved in politics and law, try to make a real change! The government allows these 'predatory' companies to exist in the first place.

I don’t care what others do with their money. But it’s an Apple focused forum and I expressed my thoughts on Apple being willing to partner with predatory companies like Klarna. It is rather disgusting.

 

[DTphonehome]

The one thing not considered is the transaction cost when selling your owned iPhone. On eBay you have fees (and PayPal fees), and the risk of being scammed. On FB marketplace you have to make time to meet with someone who may or may not be sketchy. With the lease you don't have to deal with any of this.

 

[Core.2]

You wouldn't beat up a rental, the same thing applies here. Hopefully people will have enough common sense to realize that.

I am thinking Klarna may deduct for a small ding in the frame of an iPad as they want to resell the device, when Apple just wants it back to recycle the parts and materials. Just a guess.

 

[PhoenixDown]

And even with their own credit card, one can no longer finance an iPhone without choosing one of the big three to get in bed with.

I noticed that earlier this year when I went to buy a new iPhone. That was the only real value I see from the card. I'd cancel but maybe I'll keep it for a future MacBook or transfer the credit lines once this moves over to Chase.

 

[Hammerd]

At first this sounds like a great idea with no downsides, but the problem is that Apple is doing this through Klarna, which is one of the most predatory companies out there, that takes advantage of people living paycheck to paycheck by burying them in debt that they can't possibly hope to ever repay.

So yeah, no thanks.

Why the heck couldn't Apple just handle this themselves? They have the capital to do so, why partner with vultures?

Because they don’t want to be associated with the negative emotions that installments and reminders to pay gives
Because they are not experts of debt collection
Because Klarna pays the full amount upfront (with a discount)
Because Apple shouldn’t get into the business of BNPO loans that is unsustainable

 

[AmigaDos]

So how is this different than the iPhone Upgrade program if you do the 12 month option?

 

[LarryB08]

At first this sounds like a great idea with no downsides, but the problem is that Apple is doing this through Klarna, which is one of the most predatory companies out there, that takes advantage of people living paycheck to paycheck by burying them in debt that they can't possibly hope to ever repay.

So yeah, no thanks.

Why the heck couldn't Apple just handle this themselves? They have the capital to do so, why partner with vultures?

This comment represents astounding naivete. The problem is NOT with Klarna or similar companies at all - the problem is with YOU, the buyer. To use your example, if you are living paycheck to paycheck, why on earth are you buying or leasing a $1000+ phone or any other such expensive luxury item? This is not an example of being preyed upon by "evil" corporate America. This is a simple example of a totally irresponsible buyer who does not know how to handle their existing finances in a reasonable way. I have used Klarna and Affirm with purchases through other sellers with great success. I was able to spread out my payments with low to 0% interest and was not preyed upon in the least. And why? It is because I knew that my current financial situation would allow me to comfortably make the required payments. But if working through such a program as this will create an undue burden on you and your bank account, then guess what, you shouldn't be leasing the phone in the first place. And the end result is not an issue with Klarna; it is an issue with you. (PS - this is similar to the reckless use of Credit Cards that so many use without any kind of forethought).

 

[Octavius8]

It will be the only way to the foldable. 50% over 12 months or more…

 

[mattopotamus]

Why. The lease costs exactly the same as buying. If you buy the phone at the end of the lease, the deal is just a 2-year interest-free loan. Zero-percent financing is always "worth it".

Based on this article, Apple will give you more for a trade-in, and you can also sell your outright purchased device for more than a trade in after 1 year. You have to weigh convenience vs money.

 

[GuruZac]

These "is X apple product worth it" threads are always funny to me. Whether or not a product is worth it is entirely up to the buyer/user. Worth it is dependent on so many things. Is a Porsche GT3RS worth leasing? Maybe if you have the means. For most no. Is an iPhone worth leasing? Maybe, maybe not.

 

[neuropsychguy]

I just spoke with a sales associate from Apple over text. I wanted to know what the “fee” (that they briefly mention on the site) to upgrade early to the new iPhone 18 Pro would be if I got the iPhone 17 Pro and wanted to upgrade early… Turns out, it’s really ******.

You have to pay off the full lease. That’s it. It’s like getting out of an apartment lease.

You have the phone for two months, the new phone comes out, and you either wait for your lease to end OR you pay 10 months or 22 months of payments before you can get the new phone and begin paying leases again.

That’s insane. Coming from a person who needs a new phone now but still wants to get the new-new one when it comes out, this is a terrible idea right now. Maybe once the 18 Pro releases, I’ll feel differently, but this in general is just terrible.

It's only "terrible" in you rather unique situation -- buying an iPhone 17 Pro now and planning on buying an iPhone 18 Pro in a couple months. If you need a new phone, why not just buy the 17 Pro and get another iPhone in a few years? Or buy something like a good condition used iPhone 13 (around $250) and then trade it in to Apple when the 18 Pro comes out? Or sell it? Current trade in values are $195. While that might drop in a few months, the iPhone 12 still has a $125 trade in value to Apple. That would make it much cheaper (around $60 - $125 effective cost) than being stuck in a contract for 12-24 months.

 

[OGdrknight]

My question would be what are the damage fees because occasionally you will get some cosmetic damage even with a case and screen protector on.

For some reason, I feel Apple may see cosmetic damage and say you need pay additional $100 damage fee before we’ll give you a new phone.

 

[Clowndips]

Um . . . financing is financing. This isn't any different from any other financing plan that has been offered for anything, ever, except that if you upgrade the device regularly, now you are on the hook for more full-price financing into perpetuity, without ever actually owning the hardware.

In larger scale deployments like enterprise this might make a little sense (and to be fair that might be the point), but as an individual user - really: save the money and buy outright. There is nothing about this that makes sense for someone just wanting a good computer; and good computers last longer than these contracts do.

I get why Apple did this. That does not make it not stupid. For most users, this is very stupid.

 

[Ethrem]

Yeah, I'm curious about that. Obviously Apple's most popular product is iPhones, and that's what 90% of the comments in this thread are about, but how does it actually shake out for more expensive devices like Macs or tablets?

If I wanted to upgrade at the end of my lease...
If at the end of the lease, I can look at the trade-in value (as if I owned it) or average private selling value (as if I owned it), and if those are higher than my remaining balance, I'd pay off the remaining balance so I own it, and go through one of those channels. Then turn around and update to a newer device if I wanted to (and could choose to do the lease program again). Seems like I'm losing literally nothing there?

If the values are lower than my remaining balance...
Unlikely, but possible... then I'm probably better off still paying off the remaining balance and just not upgrading at the time, which would essentially be the same as if I'd just bought out outright to begin with. So seems like I'm not losing anything here either?

On the flip side, since these are essentially 0% loans, I'm getting to put my money elsewhere where it can earn more than 0% interest during the duration of the lease. In theory, I should be coming out ahead.

I've said several times... I'm not a fan of Klarna. I would/could do this also via Apple Card to stick purely with Apple (and Chase), but the lease periods are shorter (it looks like 12 months?) versus Apple Upgrade (with Klarna) which has 36 month leases for Macs. This means lower payments... (still at 0% interest), and therefore still seems like a better deal. Especially because I'm definitely not going to be upgrading my Macs every year.

Please check my math and logic. In this scenario, this seems like it would actually be a good move? What am I missing?

The one potential Apple Card trade off is missing out on the 3% cash back at the outset. But Apple's docs say you can still use the Apple Card to make your lease payments and get 3% cash back there as well, so that seems to balance out?

There really is no downside if you plan to do it this way. I also was looking at it from the lens of someone financing to spread the purchase out, not to necessarily actually continually upgrade. Like if I do it for my phone, I'll do 12 months, decide if I want to upgrade or not, and if not, let the payments spread out another 6 months automatically, then pay the final balloon. 6 months later I can trade in with Apple to get a new device or keep it until I'm ready. There's no real downside here, especially if it's true that you can still get 3% from paying the device off with Apple Card (although I'm in a unique situation of having a card that gives me 3% cash back on any purchases up to $1500/mo so I could do this regardless as long as the credit union doesn't exempt Klarna).

So how is this different than the iPhone Upgrade program if you do the 12 month option?

The difference is that instead of having another 12 months of payments if you decide not to upgrade, you have up to 6 more and then a balloon for the rest of the balance. On the flip side though, if you decide to exit the upgrade program you only have to return the device at the end of the 12 months while with iUP you would have still been on the hook for the other 50% of the phone.

 

[mattopotamus]

My question would be what are the damage fees because occasionally you will get some cosmetic damage even with a case and screen protector on.

For some reason, I feel Apple may see cosmetic damage and say you need pay additional $100 damage fee before we’ll give you a new phone.

IIRC, they are not offering Applecare+ by default, it would be an add-on. If you have AC+, $29 for broken screen and $99 for a replacement phone. If you don't add Applecare+, you are playing with fire on a leased phone. Out of warrant replacement is something crazy like $600+

The previously offered Apple upgrade plan included AC+. Your post is really good and something a large majority will overlook and get hammered at trade in time.

 

[abracadaver]

I'll stick with upgrading yearly by just financing it with my Apple Card and trading it in or keeping it, depending on the price this year. Apple gave me $580 for my 16 Pro last year, so I financed the $519 on my Apple Card.
I have a feeling that the price will be drastically high, like the MacBook $200+, so who knows if I'll upgrade or not depending on if the trade in value increase

Question for you: when I went through the current checkout flow for an iPhone, the Apple Card Monthly Installments option is set at 0% for 24 months.

Does Apple allow a phone purchased with ACMI to be traded in after 12 months worth of payments/before it's paid off? The wording of your comment sounds to me like you got trade-in credit for the remaining balance of the phone, even though it wasn't fully paid.

I'm thinking about exiting the upgrade program and either purchasing outright or using my card for the 0%, but I've enjoyed upgrading every year vs 2.

 

[mattopotamus]

Question for you: when I went through the current checkout flow for an iPhone, the Apple Card Monthly Installments option is set at 0% for 24 months.

Does Apple allow a phone purchased with ACMI to be traded in after 12 months worth of payments/before it's paid off? The wording of your comment sounds to me like you got trade-in credit for the remaining balance of the phone, even though it wasn't fully paid.

I'm thinking about exiting the upgrade program and either purchasing outright or using my card for the 0%, but I've enjoyed upgrading every year vs 2.

If you buy with your Apple card on 0%, you own the phone. They allow you to pay it over 24-months, but what you do with the device is your choice. You get an instant credit when you trade it in and buy a new iphone on your apple card. You could pay the old balance in full or still have that monthly payment.

Apple card with 0% is the way to go. It's 0% and you get the 3% cash back on the full purchase right away. It gives you the most flexibility.

Eg: I bought the iphone air last year on the apple card with 0% for 24 months. They gave me 3% cash back as if I paid the full amount up front. I have paid off the phone in full already, but for the sake of this example, let's say I did not.

When the new iphone comes out I could trade in my current iphone air to apple and if I use my apple card again, they will give me the trade in value off the price of the new phone up front. I could pay off the iphone air, or not. The new phone will be broken up over 24 months 0%.

 

[Ethrem]

Question for you: when I went through the current checkout flow for an iPhone, the Apple Card Monthly Installments option is set at 0% for 24 months.

Does Apple allow a phone purchased with ACMI to be traded in after 12 months worth of payments/before it's paid off? The wording of your comment sounds to me like you got trade-in credit for the remaining balance of the phone, even though it wasn't fully paid.

I'm thinking about exiting the upgrade program and either purchasing outright or using my card for the 0%, but I've enjoyed upgrading every year vs 2.

No but the trade in value is usually over 50% after 12 months so while you still have to pay the phone off, your new phone is much less.

 

[TacoFan]

I wish they would do it in Europe. I’d use it as a free loan by paying the remaining amount at the end of the 2 years to own the phone. They offer this possibility to lure people in and they bet that a lot of people won’t resist the incentive to upgrade (and therefore spend a lot of money to just lease)

If you have the discipline to keep your phone it’s a very good deal
If you want to upgrade every year and don’t want the hassle to sell privately (and you accept to pay slightly more) it’s also a good deal

 

[frosty001]

This all hinges in the new resale of recent devices once the market knows the price of the new phones.

 

[chrissaid]

With the new Apple Upgrade program in the U.S., you can now lease an iPhone, but is it worth it? The answer is more complicated than a simple yes or no.

We'll use the iPhone 17 Pro with 256GB of storage on a one-year lease as an example. In the U.S., the device costs $1,099 upfront, but through Apple Upgrade you can lease it for $45.99/month for 12 months.

For a 12-month lease, your payments would total $551.88, which is lower than the $1,099 that you would have spent upfront. However, it is not quite that simple, as you have to choose from one of the three following options after your lease ends:

• Return your iPhone.
  
• Return your iPhone and upgrade to a newer iPhone.
  
• Buy the iPhone outright by paying an amount equal to the device's retail price minus any lease payments made.

We dive into each of those options below.

Options

Returning the iPhone

If you return the iPhone 17 Pro and simply move on from the Apple Upgrade program, then your total cost to own the device would be $551.88 after 12 months, plus sales tax if applicable. While that is less than paying $1,099 upfront, the catch is that you are no longer in possession of the device after your lease ends and cannot resell it or trade it in.

Resale value is a big factor. If you paid $1,099 upfront for the iPhone 17 Pro but resold it for say $650 through a private sale on eBay or Facebook Marketplace after 12 months, then you only spent $450 to own the device for a year, compared to $551 if you leased it through the Apple Upgrade Program for that long. But if you somehow only managed to get $500 for the device in a private sale, then you spent $600 for the device and could have saved a bit of money by opting for the Apple Upgrade program.

$551.88 is approximately 50% of the iPhone 17 Pro's price, so Apple is essentially betting that the device will retain more than 50% of its value after one year, in order to ensure that the Apple Upgrade program is profitable. Resale prices for used iPhones can vary significantly, but Apple almost certainly expects to come out ahead.

For instance, Apple's trade-in program currently offers $560 for a used iPhone 16 Pro in good condition, and that device was released nearly two years ago. Yet, Apple is effectively "giving you back" only $547.12 on a used iPhone 17 Pro after just one year ($1,099 minus $551.88), so the math unsurprisingly works in Apple's favor.

Keep in mind that the Apple Upgrade program is partly about convenience, as you do not have to deal with reselling your iPhone — not everyone likes to deal with eBay or Facebook Marketplace. That alone might sway some customers towards Apple Upgrade, even if they know there is a chance it is not the most financially optimal decision.

Upgrading to a New iPhone

If you return the iPhone and upgrade to a newer one, the process essentially starts over.

For example, if the iPhone 18 Pro with 256GB of storage were to be offered at the same $45.99/month price, you would pay another $551.88 during the following 12 months. That would bring your total cost to $1,103.76 over two years, and you would still need to return the iPhone 18 Pro or make a final payment to keep it.

If you had purchased both the iPhone 17 Pro and iPhone 18 Pro upfront for $1,099 each, the total cost would have been $2,198. If you had managed to resell the devices for $650 each, you would have recouped $1300, lowering your final cost to $898, which would have been less than the $1,103.76 cost of leasing the devices after two years.

Of course, the resale values we have provided are purely hypothetical. There is no way of knowing what a used iPhone will be worth with certainty, but Apple has surely put a lot of research into its leasing prices to ensure that it makes a profit.

Buying the iPhone

If you opt to buy the iPhone outright at the end of your 12-month lease, by paying an amount equal to the device's retail price minus the $551.88 in lease payments made, then you simply owe the remaining $547.12 to Apple's financing partner Klarna. This brings your total cost to $1,099, which is the upfront price of the iPhone 17 Pro.

In this case, you ultimately just purchased your iPhone 17 Pro with interest-free financing by spreading out the $1,099 cost over 12 months.

Is It Worth It?

If you simply want to spend the least amount of money on iPhones over time, buying them upfront and reselling them privately is very likely the best option.

However, the Apple Upgrade program can be worth it for customers who value convenience and predictability. If you want a new iPhone every year or two and want to avoid the hassle of selling your existing iPhone through eBay or Facebook Marketplace, then the program is worth considering if the monthly payments fit into your budget.

The option to buy out the iPhone at the end of the lease is more straightforward. Since the final payment is equal to the original retail price minus the payments already made, Apple Upgrade effectively becomes a 12-month, interest-free financing plan. In this case, you would not have spent any more than you would have upfront.

Article Link: Apple's New Upgrade Program: Is It Worth It?

I’m trying to figure out how this is different than the old program?
wasn’t it technically a lease or finance? I mean citizens loan owned the contract not Apple.
Old program:
1) you could upgrade annually at no additional fee, just an increase to your monthly plan
2) it came with applecare

New program:
1) monthly payments based on a 1 or 2 year term. You can still upgrade early but now there’s a fee.
2) no AppleCare
3) loan through klarna and not citizens loan.

What am I missing?

 

[Core.2]

That’s insane. Coming from a person who needs a new phone now but still wants to get the new-new one when it comes out, this is a terrible idea right now. Maybe once the 18 Pro releases, I’ll feel differently, but this in general is just terrible.

if you absolutely need a phone right now, just get a 17 Pro.

 

[Ethrem]

I’m trying to figure out how this is different than the old program?
wasn’t it technically a lease or finance? I mean citizens loan owned the contract not Apple.
Old program:
1) you could upgrade annually at no additional fee, just an increase to your monthly plan
2) it came with applecare

New program:
1) monthly payments based on a 1 or 2 year term. You can still upgrade early but now there’s a fee.
2) no AppleCare
3) loan through klarna and not citizens loan.

What am I missing?

The old program was a purchase program with an early upgrade option. If you didn't upgrade at the 12 months you just continued to pay the next year until it was paid in full. With the lease you can actually return the phone at the end of the lease if you don't want to pay the final payoff payment.

The fee they talk about is actually paying off the rest of the device. For this reason, people who had iUP, should be going for the 1 year term. The device is 50% paid off at that 1 year mark and then they can either upgrade or decide to purchase. Klarna will automatically extend the 12 months to 18 months of payments if they don't pay it off right away, which cuts the final payoff amount down.

 

[Deliro]

The downsides are minimal. If you scuffed or broke a phone without Apple Care, then you would need to pay out of pocket to fix it anyways. Or like me, live with any damage that isn't significant and pay off the phone. If you wanted to sell mid-way, of course your buyout would be higher because your lower payments vs financing to own were lower and less of the principle was paid.

I don't have much experience with Klarna so cannot comment on that.

If is not like a car lease where you have to pay for the residual price at lease end, this is highly variable and usually is much more over the long run if you decide to buy it post lease. With Apple's program you are essentially paying the same as if you purchased or financed it, if you keep it.

Dealing with people to sell a device also sucks. Had one wise guy try to book it when he looked at a watch from me, unfortunately for him he dropped his car keys while making his dash. Now if I have to sell anything I meet at police stations.

Either way, I will just buy phones outright as I typically keep them for awhile. When I am done with them, they will usually be gifted to my teenage kids.