IPhone upgrade program - shock!!

Discussion in 'iPhone' started by djrm, Oct 7, 2016.

  1. djrm macrumors 6502

    djrm

    Joined:
    Feb 12, 2010
    Location:
    Norwich, UK
    #1
    Either I'm late to the party on this or just how dumb am I, got hooked into thinking I was onto a winner with the IUP, but after doing some maths...... luckily I'm within the return period but still what a dumbo!!!!!! Unless you can see a flaw in this. All prices in GBP

    IPhone 7+ 256GB = £919
    Apple care (2 years) = £119
    Total cost = £1039

    -----------------------------------

    IPhone upgrade plan -

    £49 a month plus £49 upfront
    You have to make 11 payments to upgrade so
    IUP = £592.95 cost every year

    Upgrade every year. So over 5 years its cost me £2964.75

    -----------------------------------

    Buy outright with apple care -

    Year one -
    Purchase price - £1039
    End of year Sell for £859 (approx)
    Cost over the first year £180

    Year two -
    Purchase price - £1039
    End of year Sell for £859 (approx)
    Cost over the second year £180

    Etc etc over 5 years

    Upgrade every year So over 5 years its cost me £900 (£180 x 5)

    Upgrade vs buy out right

    £2964.75 - £900 = £2064.75

    £2064.75 more over 5 years to use iPhone upgrade program

    WTF

    Obviously the phone could sell for a little less but it would take a huge yearly sale drop to get to 2 Grand.

    Am I missing something?
     
  2. keysofanxiety macrumors 604

    keysofanxiety

    Joined:
    Nov 23, 2011
    #2
    You don't keep the phone afterwards, you trade it in if you want the new one.

    Also, it's a 2 year contract. Stop the IUP and you need to pay off the remaining 11/12 months.
     
  3. djrm thread starter macrumors 6502

    djrm

    Joined:
    Feb 12, 2010
    Location:
    Norwich, UK
    #3
    Yeah I'm aware you don't keep it this was a comparison of the IUP vs Buying outright each year and selling. I was hypnotised into thinking the IUP was an awesome deal when clearly it's not unless I'm being thick. Yeah I get you don't have the hastle of selling each year but is £2000 over 5 years of upgrading enough to convince you to steer clear of the IUP!!
     
  4. HippieMagic macrumors 6502

    Joined:
    Dec 21, 2011
    #4
    It's a 0 APR loan. The phone is 24 equal payments but can be traded in at 12. You pay half the cost of the phone and give it back.

    Example. iPhone 7+ 128 = $36.20 a month.
    36.20 * 24 = 868.80

    You trade it in at 434.40. If you want to keep it you pay the remaining 434.40. It's the same price as buying it outright. You just have the option of paying 50% over the course of the year and trading up or paying it off completely over the course of two.

    Also there's nothing preventing you from using it and selling the phone. If you know you'll make your money back you can pay it off, sell it, and still come out on top.
     
  5. chabig, Oct 7, 2016
    Last edited: Oct 7, 2016

    chabig macrumors 68040

    Joined:
    Sep 6, 2002
    #5
    I think you're grossly overestimating the resale value after one year.
     
  6. Elisha macrumors 6502a

    Elisha

    Joined:
    Nov 21, 2006
    #6
    Especially assuming that Apple Care + is going to make the phone so much more valuable.
     
  7. aristobrat macrumors G5

    Joined:
    Oct 14, 2005
    #7
    You're able to sell a year-old iPhone with AppleCare+ for 83% of the original price?!

    In the US, getting 50-60% for that would be a great deal.

    83%?!
     
  8. Mlrollin91 macrumors G4

    Mlrollin91

    Joined:
    Nov 20, 2008
    Location:
    Ventura County
    #8
    OP, I would expect to get no more than 60% on resale value. Then associated fees taken out on top of that. 83% is absurdly high and unrealistic. The IUP is a great deal for someone that upgrades yearly and doesn't want the hassle of selling their phone. Apple essentially gave me $440 trade in value this year for my 6s. The best I could do selling my GF's 6s was $415 (55%). So essentially I made more by using the program and there was zero hassle.
     
  9. chabig macrumors 68040

    Joined:
    Sep 6, 2002
    #9
    Also consider that with the IUP you only pay for the AppleCare you actually use. If you buy outright and add AppleCare you're paying for 24 months of coverage even if you sell the phone afte v12 months.
     
  10. JulesJam, Oct 7, 2016
    Last edited: Oct 8, 2016

    JulesJam Suspended

    JulesJam

    Joined:
    Sep 20, 2014
    #10
    This is my real world experience in the US. I netted $500 for a mint condition 64GB iP6s with 1 year of AC+ left after shipping with insurance/signature required and paypal/swappa fees. IME, people aren't willing to pay you the full value of the AC+ on a used phone. I could have netted about $18 more if I instead got a refund for the remaining amount of AC+ left.

    I paid $930 for the 64GB iP6s new when you include sales tax and Apple Care+.

    $930 - $500 = $430

    So it cost me $430 to use the phone for a year, which comes to $35.83/mo. If I had gone with Apple's iPhone Ugrade Program and turned in the phone after 1 year, it would have been $36.58/mo + sales tax up front = $40.98/mo when you divide the sales tax into 12 payments. So I ended up saving:

    $40.98 - $35.83 = $5.15

    So I saved $5.15/mo.

    EDITED - forgot to factor in the sales tax initially!

    Not only did I have to take pictures of the phone, list it, respond to BS lowball offers, pack it up and ship it off, I now also have to worry about the 6 month paypal chargeback period.

    For $5.15 cents per month, it is worth it to me not to have to sell a phone, deal with possible scammers and paypal's 6 month chargeback period.
    --- Post Merged, Oct 7, 2016 ---
    Apple will refund you the remainder of the AC+ if you ask for the policy to be canceled. I sell my used phones with the AC+ but I find that buyers aren't willing to pay all that much extra for it. So for the 64GB iP6s I sold with 12 months of AC+ remaining, I could only get a buyer to pay me $50 for the remaining AC+ whereas I could have gotten about $68 refunded from Apple if I canceled it before I sold it. I would have been better off canceling it.
    --- Post Merged, Oct 7, 2016 ---
    IME even less if you consider the sales tax you pay on the device when you buy it new and then the shipping/paypal/listing fees if you sell it online.

    I got 53% back on a 64GB iP6s in absolutely Mint condition, not a scratch or a ding on it, when you factor in what it cost to sell it and the sales tax I paid on it new.

    It's possible I would have gotten more for it if I was willing to keep it listed longer, but I got tired of having to respond to all of the BS low ball offers and when someone gave me a reasonable offer, I took it.

    If you sell locally, you can do better b/c you don't pay shipping/paypal/listing fees but there is no way in hell I am doing CL. If I happen to know someone who will buy from me then fine but I am not selling in person to strangers.
     
  11. Daniel L macrumors 6502

    Joined:
    Sep 15, 2009
    #11
    One caveat is that users in states with sales tax pay the entire amount of sales tax due, significantly adding to the cost of the phone.
     
  12. macfacts macrumors 68020

    macfacts

    Joined:
    Oct 7, 2012
    Location:
    Cybertron
    #12
    What are you missing? Most people in America live pay cheque to pay cheque. They can save up for the first monthly payment or save up for the whole cost of the phone.
     
  13. JulesJam Suspended

    JulesJam

    Joined:
    Sep 20, 2014
    #13
    What he is missing is that he has grossly overestimated the resale value of a 1 year old iPhone at least if he were to sell it in the US.
     
  14. macfacts macrumors 68020

    macfacts

    Joined:
    Oct 7, 2012
    Location:
    Cybertron
    #14
    With the numbers he gave, he could sell a one year old iPhone for 50% off what he paid and it would still be cheaper to not use the upgrade program.
     
  15. JulesJam Suspended

    JulesJam

    Joined:
    Sep 20, 2014
    #15
    IPhone 7+ 256GB = £919

    That's the price without sales tax. Idk how much sales tax is in the UK.

    Then he said this:

    £49 a month plus £49 upfront

    Is the £49 up front the sales tax? It seems like he is including the sales tax on the AiUP but not for the full retail phone.
    --- Post Merged, Oct 8, 2016 ---
    Does that include sales tax?
     
  16. martin2345uk macrumors regular

    martin2345uk

    Joined:
    Jan 6, 2013
    Location:
    Manchester, UK
    #16
    The £919 includes any "sales tax" as our prices are usually always inclusive of VAT, which I guess is our equivalent.
     
  17. JulesJam Suspended

    JulesJam

    Joined:
    Sep 20, 2014
    #17
    So why the £49 upfront? Is that the first month's payment or sales tax?
     
  18. Lyrical macrumors regular

    Joined:
    Sep 12, 2012
    #18
    Its just an initial payment.
     
  19. maka344 macrumors 6502a

    maka344

    Joined:
    Nov 4, 2009
    Location:
    London, UK
    #19
    A good question about AppleCare Plus on the Upgrade Program. Once you trade back to Apple, can you then get a refund on the rest of the Apple Care like you can if you buy outright? Essentially, you are buying outright but paying with a loan. So I don't see why you can't get £60 back on the unused Apple care.
     
  20. JulesJam Suspended

    JulesJam

    Joined:
    Sep 20, 2014
    #20
    Cost of 256GB iP7+ on AiUP for 1 year = £49 x 12 = £588

    Cost of buying 256GB iP7+ full retail with AC+ = £1039

    Like I said above, I was able to net 53% for a 1 year old 64GB iP6s with a year of AC+ left so if that is a realistic percentage in the UK, £1039 x .53 = £550.

    £1039- £550 = £489 cost of owning a 256GB iP7+ with AC+ for 1 year.

    £588 - £489 = £99 difference b/t 1 year of AiUP and cost of owning with AC+ for 1 year if you can net 53% return when you sell the device after using it for 1 year.

    So it would be £99 (£8.25/mo) more expensive to do the AiUP. But for that £8.25/mo you would get the convenience of not having to sell a phone.
     
  21. radioking macrumors regular

    Joined:
    Nov 5, 2012
    #21
    It's because you haven't paid for it yet. The price is divided into 24 payments of which you've only paid 12.
     
  22. JulesJam Suspended

    JulesJam

    Joined:
    Sep 20, 2014
    #22
    I used an online currency converter and that would be about $123. So the AiUP is $123/yr more expensive assuming you could net 53% like i did when you sold last year's device.
     
  23. maka344 macrumors 6502a

    maka344

    Joined:
    Nov 4, 2009
    Location:
    London, UK
    #23
    Thanks. But you do pay for it. The loan starts a new 24 month plan?
     
  24. radioking, Oct 8, 2016
    Last edited: Oct 8, 2016

    radioking macrumors regular

    Joined:
    Nov 5, 2012
    #24
    The cost of Applecare is divided over 24 payments, just like the phone. You pay the entire cost of AppleCare if you make all the payments. Considering you haven't made all the payments, it has not been paid for in full. You have only paid for a year of it.
     
  25. Pez555 macrumors 68000

    Pez555

    Joined:
    Apr 18, 2010
    #25
    No way you would sell a year old plus for £859.

    To me, the upgrade program is worth the slightly increased monthly cost to ensure I dont have the hassle to sell it on.
     

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