maflynn
macrumors Broadwell
No the downside is you do not own the computer for 36 months. If something unforeseen happens you find yourself unable to make those payments you lose the computer ( and possibly a hit to your credit report)
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M5 Studio base pre-ordered using Apple Upgrade lease
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Apple fanboy
macrumors Ivy Bridge
Not quite.
3. gets you on the perpetual leasing model. Just like many car owners. You get sucked into the trap of paying £x a month, that you know paying £x+x for the new model isn't a biggie. Its only £x more....
I have had that argument with many car owners over the years. They go into it thinking 3 years and I am done. But in reality they just continue to lease another option.
My first Mac lasted 6 years. My current one 8. I expect this one to lat me more than that. More than enough time to save up and buy when I want to or need to.
The difference with a computer is you don't actually know when it will need replacing. It depends on how software needs change and whey you will be doing with it, as things change. I'd rather be working to my own timeline.
dugbug
macrumors 68020
Try owning the computer and not making the installment payments
dugbug
macrumors 68020
Leasing is entirely optional based on your situation. I think we are going to see some big AI changes in chip design in the next three years or so and my M1 is 4.5 years old. I want that flexibility. Apple offers zero interest installment payments as the alternative to the lease if you don't want this. So Im not pushing leasing on anyone, just pointing out why you would do it.
Over 20 years leasing cars - BMW, Land Rover, MBZ - never had a lease payment missed.
Same with my LEASED Studio Mac - will either own it at the end or turn it in for a newer model.
I can pay for it all cash but my CFA said "why?" - better to use someone else's money with no depreciation hit while taking the monthly lease payments as an expense against my small business tax returns each year.
You can and it will cost you no more than had you purchased it outright.
Let's walk through it. May bank account has balance of $10K, I am interested in buying the base M5 Ultra.
Option One, Outright purchase: Bank account now has $4,500.
Option Two, Apple Upgrade: After the first year of payments my account balance is: $8678.80, after the second year the balance is $7,357.60, after the third year (end of lease) the balance in my account is $6036.40. At this point I either return the computer to Apple or I can buy it for $1,535.40 and my bank account balance is now at $4,500...the same as if I had purchased it outright. The difference being I am earning interest on the amount I have not yet paid on the lease so in the end I am coming out ahead by using Apple Upgrade.
Why would you not give them the balloon payment if your intention was to purchase the system from the start?
If something unforeseen happens then take the balance owed (that you would have paid had you outright purchased the system) along with the residual amount and pay it off. You are in no worse a financial situation than had you just purchased it outright.
Unless your timeline is less than 24 months there's effectively no difference.
Very well said!
I love Option Two.
Not only will the bank account accrue more interest for 3 years, I am going to get 3% back as Apple Cash each month using my Apple Card which I pay off in full automatically each month.
Combine the interest accrued, 3% cash back, and writing off the monthly lease on my small business tax returns = winning purchase on a depreciating asset.
maflynn
macrumors Broadwell
Most people (imo) who go down the leasing path do so because they do not have the cash on hand, if they find themselves unable to make the monthly payments it stands to reason that they will be unable to buy out the lease
You're making an assumption that everyone who leases has enough cash on hand to buy it, but instead chooses the leasing option - clearly that does happen, but I suspect (its my opinion not a fact), that the majority of people are opting for the leasing option because they can ill afford dropping, 2,500 to 5,000 on a new computer.
maflynn
macrumors Broadwell
Good for you, and yet we see this:
Car repossessions went up 43% over two years as high prices squeeze Americans. Here's what you can do if you're at risk
Again, you may have the cash on hand to buy it outright but are choosing to lease, that's great, but you and others are assuming that everyone who leases has the cash on hand which I don't believe is the case
That's a completely different discussion. That said without Apple Upgrade they'd put it on a credit card or some BNPL service and pay > 13% interest.
maflynn
macrumors Broadwell
No its not, I was refuting your point that you stated that the only downside to leasing is the monthly payments, where I said not owning the computer is a pretty big downside imo
Happy_John
macrumors 68020
Heh, I have 2 Thunderbolt displays hanging off a Mac mini M2 pro in my home office ( I’m there doing work stuff more often than in my “office” office)
I absolutely love my Thunderbolt displays and I dread the day I have to replace them.
They’re a bit toasty in summer, though.
If your intention has always been to buy it why would you not do so at the end of the lease? This is a lease where you have the option to buy it upon the completion of the term.
Cuesca
macrumors 6502a
I'm on my 3rd Tesla lease and will probably be leasing the MYL come 2027. The battery degradation(5-10%/yr for the M3, the newer MY are much much better at 1-2%/yr) is relative to the car's resale value which makes the residual value pretty abysmal. Leasing is a great idea for things like EVs that are designed to break or computers that have planned obsolescence built-in.
enricoclaudio
macrumors 6502a
And that’s the problem with Klarna and the reason I canceled my pre order with the leasing program. You can’t pay off the balance early like with a loan. I chatted with Klarna yesterday and they explained it very well. The only way to break the leasing before the time term is paying off the lease and returning the Mac. There is no payout option if you do so, meaning you lose your money and no Mac. Buyout option becomes available only at the end of the lease. I cancelled mine and placed a new order with my Apple Card and 12 months financing, like I did back in 2022 with my M1 Max Mac Studio.
I was able to get my 2x 2011 Apple Thunderbolt 27" Displays for $50 each 3 yrs ago. They were being thrown out by my daughter's company who was replacing all of their display units. Unfortunately one of the classic 2011 displays will occasionally lose its video feed... so suspect it will die a comfortable life shortly.
Really? Seems odd that you would not be given the option to buy if you made all the lease payments no matter if you did so over the original term length or sooner.
That said if you really can’t just pay the lease off early and buy it then continue making the lease payments. Then, at the end of the term buy it. You’re no worse off, just delaying the actual purchase.
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enricoclaudio
macrumors 6502a
Apple fanboy
macrumors Ivy Bridge
EV’s that are designed to break? lol. With the 8 year warranty on an EV battery losing 5-10% a year would mean they replace most EV batteries. I’ve yet to meet anyone who has had an issue with their EV battery (i3s owner for 5 years with no noticeable change in range).
I know this thread is not about EV’s but let’s keep it real please.
Anyone know what the "upgrade fee" will be if you say wanted to upgrade the following year ?
enricoclaudio
macrumors 6502a
The early upgrade fee is equivalent to the amount of your remaining lease payments.
And according to this, looks like you can also buy the Mac if you decide to finish early your lease:
All these questions are answered here (scroll down to How To)
Apple Upgrade - How to Upgrade
With Apple Upgrade you decide when it's time for something new. Upgrade at the end of your lease term, or earlier for a fee. Check your upgrade status now.
www.apple.com
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I wonder what the incentive is to Klarna in order to keep the lease running the entire duration.
That said if Apple Upgrade is administered through Klarna that would be reason enough for me to be extremely cautious about using it.
Seems you were provided some incorrect information:
Can I leave Apple Upgrade before the end of my lease?
Yes. If you would like to exit your lease prior to the end of your initial lease term, you can pay an early termination fee, which is up to the amount of your remaining lease payments and you must return the device. For example, if you end your lease after 21 months on a 24 month lease, you'd pay up to the remaining 3 monthly payments.
If you prefer to keep the device, you can also buy it outright through your Klarna account. You’ll be charged a purchase option fee, which equals the full price of the device at lease signing less the sum of lease payments you've already made and any remaining trade-in credits (plus tax). For example, if the full price of the device at lease signing is $1,000 and you’ve already made $800 in lease payments, the purchase option fee would be $200.