iPhone 5 or earlier Do you feel you’re paying less for the phone on the Upgrade Program instead of buying?

[Deguello]

I guess you assume everyone buys AppleCare+ since that's baked into the IUP. I've never had AppleCare on any of my 10 iPhones. Don't have it on my iPhone X that was also bought outright. So there is a difference.

Yeah, the required AppleCare is an expense. It’s not an additional expense for everyone, since some would get it anyway.
[doublepost=1537129371][/doublepost]

It doesn't matter how one feels. What matters, is whether or not said person is paying more through the program, and whether or not said person can truly afford it.

If you think it doesn’t matter how one feels, you need to take better marketing classes.
[doublepost=1537129491][/doublepost]

I just think your point is odd; of course you’re going to pay sales tax if you buy a new product every year, regardless of whether it’s not on an installment plan or not.

If you’re buying every year then you do end up paying less than the retail price for the device, not taking into account the potential losses of not selling the phone yourself.

If you buy every year, how do you end up paying less than retail, bearing in mind that if you don’t end up paying retail, or continuing the program, you have no phone?

 

[Apple_Robert]

Yeah, the required AppleCare is an expense. It’s not an additional expense for everyone, since some would get it anyway.
[doublepost=1537129371][/doublepost]If you think it doesn’t matter how one feels, you need to take better marketing classes.

Emotions should not enter into it. Either one can afford the payment or one cannot. Basing financial decisions on emotions is how a lot of people get into debt they can't afford.

I don't need to take any classes, thank you.

 

[1144557]

It's a simple answer of "of course." Without carrier financing (or Apple) most would not be able to afford a modern flagship smartphone.

57% of US adults have less than $1,000 in savings. The math doesn't add up as most of America couldn't drop money up front for an even $700 phone.

$1,100 is a drop in the bucket for me in terms of assets/liquidity, but would I cough it up upfront? Odds are much lower and a much tougher choice to make; especially if I had to deal with the resale every year with ever building online scams and Paypal siding with anything buyers say.

But it's a 0% loan, there is no reason NOT to utilize it.

 

[ZombiePete]

If you buy every year, how do you end up paying less than retail, bearing in mind that if you don’t end up paying retail, or continuing the program, you have no phone?

It’s not that complicated: if you buy the phone on release, you make regular payments for twelve months and then you’re eligible for the new model. The loan is for 24 months, so you’re paying approximately 50% of the value of the phone before you upgrade to the next model, plus sales tax where eligible and AppleCare.

If you decide you don’t the new model, you just keep paying until it’s paid off and then you paid full retail, but not more than that.

 

[Deguello]

Emotions should not enter into it. Either one can afford the payment or one cannot. Basing financial decisions on emotions is how a lot of people get into debt they can't afford.

I don't need to take any classes, thank you.

If you don’t think emotions come into play, yeah, you do.

I can afford the phone. I could afford 1,000 phones. Whether I buy one or not wasn’t purely a rational decision.
[doublepost=1537129941][/doublepost]

It’s not that complicated: if you buy the phone on release, you make regular payments for twelve months and then you’re eligible for the new model. The loan is for 24 months, so you’re paying 50% of the value of the phone before you upgrade to the next model, plus sales tax where eligible and AppleCare.

If you decide you don’t the new model, you just keep paying until it’s paid off and then you paid full retail, but not more than that.

If you keep paying, you aren’t paying less than retail.

 

[Tommy c]

I wish they did this upgrade program with the iMacs and MacBooks lol!

 

[ZombiePete]

If you keep paying, you aren’t paying less than retail.

You’re not paying for the old phone, you’re paying for the new one at that point. For the life of my X, I paid for half of it before I turned it in for the XS Max.

I suspect you understand how it works but are trying to take some kind of philosophical/moral stance on the issue of financing, but for the life of me I’m not getting the point you’re trying to make.

 

[keeper]

AppleCare - that’s a two year plan, if you change every year do you just loose a year or do you get a refund?

 

[Apple_Robert]

If you don’t think emotions come into play, yeah, you do.

I can afford the phone. I could afford 1,000 phones. Whether I buy one or not wasn’t purely a rational decision.

This forum is replete (on a hourly basis) of people making a financial decision based on emotion. And said individuals ask for help in making their emotional purchase, with other forum members of like mind. It is a recipe for financial trouble.

Leave emotions out of the equation, and the decision as to whether or not to buy a product becomes much more clear, and one usually won't need to come to MacRumors blindly asking total strangers if they should make a purchase for product X.

I haven't denied emotions are a part of it for many, many people. My point has been they shouldn't be. And this forum speaks to that ugly fact for many.

 

[ZombiePete]

AppleCare - that’s a two year plan, if you change every year do you just loose a year or do you get a refund?

AppleCare is a monthly plan now too.

 

[Apple_Robert]

AppleCare - that’s a two year plan, if you change every year do you just loose a year or do you get a refund?

It is a prorated refund.

 

[Deguello]

You’re not paying for the old phone, you’re paying for the new one at that point. For the life of my X, I paid for half of it before I turned it in for the XS Max.

I suspect you understand how it works but are trying to take some kind of philosophical/moral stance on the issue of financing, but for the life of me I’m not getting the point you’re trying to make.

If you turn it in, you’re getting the agreed upon residual value, which pays off the old phone. None of the X goes toward the Max.

My point is that you’re not saving any money relative to full price with this program.

 

[gsusser]

I'm wondering if I should change from buying the phone outright with my Barclay Apple Card (interest free). I generally buy a phone every 2 years, though I might wait 3 years with the Xs. However, if someone can convince me that I'd be better off with the upgrade plan, I would go that route. I really don't need or want a new phone every year though.
If you sell a phone after exactly 1 year, do you end up paying 50% not taking into consideration sales tax?

 

[ZombiePete]

If you turn it in, you’re getting the agreed upon residual value, which pays off the old phone. None of the X goes toward the Max.

My point is that you’re not saving any money relative to full price with this program.

I wasn’t taking into account buying the phone and then selling it on your own later; I’ve already addressed that in this thread. If you consider that then fine, you might get an extra $50-100 selling it on your own, but I still didn’t have to make that initial $1,300 investment and I avoided the hassle of selling it on my own later. Maybe not a financial benefit, but still a value proposition to me.

Anyway, I’m not going to sit here and split hairs over the value of the program with you. If you don’t see the value in it don’t use it; it works for me.

 

[Steve686]

People used to pay $200 for a phone upgrade years ago. Many people couldn’t afford the full prices then while paying off the phone within 2 year contracts.

Millions of people paid this way because it was “affordable”.

The fact that the carriers have dropped service rates a bit while letting you pay off the phone monthly isn’t all that much different than those days.

 

[craigio85]

It doesn't matter how one feels. What matters, is whether or not said person is paying more through the program, and whether or not said person can truly afford it.

It’s 0% finance. It’s higher risk for the lender because there’s no interest payments to buffer against defaults. Hence, to mitigate that risk, it’s not just given out to anybody who asks for it. If somebody’s credit file suggests for a second their accounts are stressed, they will be refused the finance. You’ll always get situations where circumstances suddenly change and people struggle to pay, but I can guarantee the default rates on iUP will be vanishingly small. It is categorically not designed as a means of putting iPhones into the hands of people who can’t afford them.

 

[ZombiePete]

It’s 0% finance. It’s higher risk for the lender because there’s no interest payments to buffer against defaults. Hence, to mitigate that risk, it’s not just given out to anybody who asks for it. If somebody’s credit file suggests for a second their accounts are stressed, they will be refused the finance. You’ll always get situations where circumstances suddenly change and people struggle to pay, but I can guarantee the default rates on iUP will be vanishingly small. It is categorically not designed as a means of putting iPhones into the hands of people who can’t afford them.

IIRC, when it first came out a lot of people were being denied the financing and were surprised about it. It’s definitely not a gimme that just anyone can sign up for it.

 

[gadgetfreaky]

Don’t underestimate the value of not having to sell your phone every year. I got so sick of selling gadgets online after a few years; I hate dealing with all the ******** involved. If I can trade in my used phone for 50% of its value, it’s worth that 5-10% difference for not having to sell it on my own.

I agree. Im in the 1up program for that reason. But say if you bought the X 256 last year.
You've paid 1/2 of 1150 + full tax or 685 or so you've paid assuming 10% tax rate. It's now work about 750- 800 if you resell it vs 575 in forgiven amount plus 2 months of apple care you didn't even get to use.

X buyers last year got kinda screwed. About $200 cheaper plus you didn't have to buy Apple Care let alone 2 extra months of it you didn't even get to use.

 

[PBz]

I view it as buying an an option on upgrade & interest- free lease. If I don’t want to upgrade just keep paying. At anytime (within 6 months of 1 year) I can upgrade if I pay out first year (which has to be paid either way).

I also buy AC+ on my phones and iPads so I’m cooking with it being baked-in.

Right now I can keep my 8+ or pre-pay a few payments and upgrade. I like the options. I used to sell my phones annually on CL but these days that’s a waste of my time and I live in a smaller market now. Back when I lived in SoCal I could have a phone sold in hours. Still remember a lady bringing me $900 cash to my work for a 6+. Also, eBay can eat it with the 10% fee.

 

[ZoroastrianChemist]

iPhones have become a service. We don’t own the phones anymore. Because they are returned at the end of the year, the consumer pays less. So decide for yourself, is $20-$50 extra on your phone bill worth the cost of getting apples’s latest Flagship worth it to you? To me I love this transition. I hope one day we can do a similar program for the MacBook Prob

 

[Nocaster]

Don’t underestimate the value of not having to sell your phone every year. I got so sick of selling gadgets online after a few years; I hate dealing with all the ******** involved. If I can trade in my used phone for 50% of its value, it’s worth that 5-10% difference for not having to sell it on my own.

You’re not trading in the phone for half it’s value if you only paid 50% for it to begin with.

I could understand your reservation if you paid full price, then traded it in after a year. But you didn’t

 

[joeblow7777]

I upgrade every year so basically I’m paying for half the phone plus the taxes before I get the new one.

That’s what most people don’t seem to get, the upgrade program makes sense if you upgrade every single year anyway, but how many people do that? Or rather, how many did it before the program? The program suckers people who only would have bought an iPhone every 2 or 3 years into buying one every year and thinking they’re saving money. It’s a big win for Apple.

 

[Phone Junky]

The program suckers people who only would have bought an iPhone every 2 or 3 years into buying one every year and thinking they’re saving money. It’s a big win for Apple.

DING DING DING We have a winner!

 

[joeblow7777]

DING DING DING WE have a winner!

Well it’s pretty obvious when you think about it for two seconds. I mean, it is probably the best way to get a new phone every year, but no one really needs a new iPhone every year.

 

[kevjen888]

It is a prorated refund.

So after a few months I really like the phone so I pay my upgrade program off completely and request cancellation on the AppleCare, they will issue me a prorated refund?