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iPhone Upgrade Program Catch

R

RabidMacFan

macrumors 6502
Original poster
Jun 19, 2012
364
175
California
I almost signed up for the iPhone Upgrade Program today, and I'm glad I didn't!

After reading the iPhone Upgrade Program website, I was expecting to be charged $36.58/mo for 24 months for the iPhone 6s, or $877.92 over two years. It's a good thing I read the fine print, which the Apple sales person pretty much glossed over and just asked me to tap "Accept".

The actual charge was going to be as follows:
1 time payment of $109
23 payments of $36.58
For a total of $950.34!

The sales person seemed to think that I had to pay 3 months up-front, but the text lead me to believe otherwise, since I would still make 24 total payments.

I think the charges added up like this:
The first Payment is $36.58 + Sales Tax for the entire order, and then 23 follow-up payments at $36.58. The sales tax at the store was 8.25%, and the sales tax on $877.92 is $72.43. So, first payment is $36.58 + $72.43 = $109.01.

I ended up just buying the phone in full for $810.79 after tax using my Discover Card via Apple Pay. Am I the only one that thought I would be saving money using this program?
 
Mine added up exactly. 949 phone + 129 applecare + Tax

Pay the first month plus tax upfront, the rest is divided by 23. So there is no catch.
 
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Ok so what I was expected was $36.58 * 24mo = $877.92
What I got was $36.58 + $72.43 + $36.58 * 23mo = $950.34.

I realize now that it's the price of the phone, plus Apple Care and Tax, and matches perfectly if you decided to pay in full. But based on the marketing, I didn't consider the tax and thought it was straight up $36.58 for 24 months. Maybe I'm the only one that thought that, in which case, never mind.
 
RabidMacFan said:
Ok so what I was expected was $36.58 * 24mo = $877.92
What I got was $36.58 + $72.43 + $36.58 * 23mo = $950.34.

I realize now that it's the price of the phone, plus Apple Care and Tax, and matches perfectly if you decided to pay in full. But based on the marketing, I didn't consider the tax and thought it was straight up $36.58 for 24 months. Maybe I'm the only one that thought that, in which case, never mind.
Click to expand...

It does seem off that you have to pay the tax on the whole thing up front... Hopefully it works out when you trade your phone in at the end of the first year (like you get a credit for the tax on the portion outstanding on your phone).

But considering you had to pay the full amount of tax today on your purchase, and you won't get that back if you resell your phone next year, you're really not out by going with the Apple plan.

C
 
RabidMacFan said:
The actual charge was going to be as follows:
1 time payment of $109
23 payments of $36.58
For a total of $950.34!
Click to expand...
The $109 confuses me a bit. I bought two 64GB iPhone 6s' today (separate transactions), and my AMEX was charged $109.74 twice.

Both receipts state:
First Installment Plus Tax: $89.26

The AMEX website shows:
IPHONE CITIZENSONELOAN: $109.74
IPHONE CITIZENSONELOAN: $109.74

I'm hoping that's just a temporary auth, and it will be corrected to $89.26
 
RabidMacFan said:
Ok so what I was expected was $36.58 * 24mo = $877.92
What I got was $36.58 + $72.43 + $36.58 * 23mo = $950.34.

I realize now that it's the price of the phone, plus Apple Care and Tax, and matches perfectly if you decided to pay in full. But based on the marketing, I didn't consider the tax and thought it was straight up $36.58 for 24 months. Maybe I'm the only one that thought that, in which case, never mind.
Click to expand...
How could they advertise the same monthly payment nationwide if it included tax? They never include tax when they advertise the price of anything else.
 
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CNeufeld said:
It does seem off that you have to pay the tax on the whole thing up front... Hopefully it works out when you trade your phone in at the end of the first year (like you get a credit for the tax on the portion outstanding on your phone).
Click to expand...

Some states allow a trade in allowance on a phone to offset the tax on the new item, but only to the extent that it reduces the selling price of the new item. So $800 phone, if the trade in lowers the price to $600, then you pay the sales tax on only the $600. Under AUP, when you trade in at the end of the first year, you are trading in lieu of paying off the balance (i.e. Apple pays off the balance for you), and so there is no adjustment to the price of the new device. Apple can't just willy nilly grant people sales tax reductions, they have to follow the law.
 
aristobrat said:
The $109 confuses me a bit. I bought two 64GB iPhone 6s' today (separate transactions), and my AMEX was charged $109.74 twice.

Both receipts state:
First Installment Plus Tax: $89.26

The AMEX website shows:
IPHONE CITIZENSONELOAN: $109.74
IPHONE CITIZENSONELOAN: $109.74

I'm hoping that's just a temporary auth, and it will be corrected to $89.26
Click to expand...
Others have said that initial auth is for three months of payments without the tax (to make sure you have room under your credit limit). Does that math work out? If so, then those auths will drop off, and you will get charged the $89.26 on each one.
 
aristobrat said:
The $109 confuses me a bit. I bought two 64GB iPhone 6s' today (separate transactions), and my AMEX was charged $109.74 twice.

Both receipts state:
First Installment Plus Tax: $89.26

The AMEX website shows:
IPHONE CITIZENSONELOAN: $109.74
IPHONE CITIZENSONELOAN: $109.74

I'm hoping that's just a temporary auth, and it will be corrected to $89.26
Click to expand...

Are you sure that isn't a debit and credit? For my 6s+ my discover showed a charge of 3 months payments on pending charges and it was immediately credited right after. It's just a check funds test. If you divide $109.74 by 3 it equals $36.58
 
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edlex said:
Are you sure that isn't a debit and credit? For my 6s+ my discover showed a charge of 3 months payments on pending charges and it was immediately credited right after. It's just a check funds test. If you divide $109.74 by 3 it equals $36.58
Click to expand...
AMEX doesn't show credits as quickly, maybe one will show up tomorrow.
 
I bought my iPhone 64 GB 6S Plus in Delaware, where there is no sales tax. $849 for phone plus $129 for Apple Care brings total to $978. Did the AUP, Citizen charged me $122.25, which is exactly three months payments of $40.75/month. I called Citizen to find out what the hell was going on. Response I got was that Citizen wanted to check that I had enough credit on my Amex Blue Cash Everyday card to cover three payments, and once it clears I'll be reimbursed the two payments. The credit agreement from Citizen states the following:

First Installment Plus Tax: $40.75
Subsequent 23 Installments: $40.75 per month
Total Including 0% Interest: $978.00

WTH? If Citizen doesn't rescind the extra amount on the first payment I'll just go ahead and pay the phone off in full and resign myself in doing an upgrade every two years instead of yearly.
 
Just saw two proper First Installment + Sales Tax charges show up my AMEX.

Guess the two "three month regular installment" charges from last night will fall off.

image.jpeg
 
I actually saved $0.08 and got a 0% loan by going with the upgrade program vs. buying it outright with AppleCare+. It came out to $947.20 including 9.25% sales tax vs. $947.28 for the 64GB with AppleCare+.
 
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