M5 Studio base pre-ordered using Apple Upgrade lease

[4sallypat]

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.

It makes sense for Klarna to offer a lease to carry to the end with no interest attached - as a constant stream of cash flow, while the liability of the device has been insured by Apple, and Apple is kicking back money to Klarna for the depreciation and/or interest monies....

 

[m1maverick]

It makes sense for Klarna to offer a lease to carry to the end with no interest attached - as a constant stream of cash flow, while the liability of the device has been insured by Apple, and Apple is kicking back money to Klarna for the depreciation and/or interest monies....

Can you expand upon this? I can't see a cash flow difference between the entire balance being paid early or the entire balance being paid over the agreed upon term. From a cash flow perspective receiving all the cash sooner rather than later seems to be preferable.

 

[enricoclaudio]

According to Gemini, Apple pays Klarna transaction and financing fees to handle the credit infrastructure, similar to standard buy-now, pay-later (BNPL) agreements.

 

[Happy_John]

Regular and predictable is good for business. A regular and predictable income for 24 months into the future per lease is preferable to a big bag of cash now and nothing more. You can plan far more effectively with predictable income.

Employees like a regular monthly salary.

 

[Cuesca]

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.

The first run M3 had countless issues for me; however, they were kind enough to let me out of my lease 6 months early when the MY came out. If you ever followed the r/tesla subreddit you'd know that a lot of people had the same 5-10% a year degradation that I had. When I was ready to turn the car back to Tesla, the range was down by 20% in roughly 2.5 years. It had to be down 30% within the warranty period for Tesla to change the battery.

For all of my MYs(2021/2023) I was degrading at 1-2%/year. Which is my point: the depreciation of these cars is directly related to the battery, which costs $25k to replace means these cars are designed to break. And buying them outright to me, doesn't seem like a good idea financially.

"i3s owner for 5 years with no noticeable change in range."

Good for you, but in the real world, batteries degrade... Slower or faster, that really depends on countless factors.

 

[4sallypat]

Can you expand upon this? I can't see a cash flow difference between the entire balance being paid early or the entire balance being paid over the agreed upon term. From a cash flow perspective receiving all the cash sooner rather than later seems to be preferable.

What @Happy_John said above.....

 

[KaliYoni]

Just a quick suggestion for anybody interested in taking a quantitative approach to making a lease/buy decision: if you want your analysis to be similar to what financial professionals would produce, you should calculate the net present value (NPV) of each scenario.

The art in this kind of analysis is in predicting what the Mac Studio will be worth in a few years and in deciding on an appropriate interest rate to use when calculating what future amounts of money are actually worth today. Bottom line, there isn't a single answer for which is best. It depends on the individual, their financial situation, what other uses for the money they have, and their access to capital.

And don't forget, lessees become Klarna customers. This could have privacy and financial consequences. For example, Klarna may use info captured from Apple lessees for marketing purposes. Or if Klarna is acquired or goes bankrupt, its customer data may end up at another company. Or if a private equity firm takes over Klarna, lease terms could change in an extremely customer-unfriendly way. Another important detail is that Klarna currently operates in a very lightly regulated space compared to other financial institutions. This means its customers are essentially beta testers for a new marketplace.

----------
Here's a recent example of customer data getting grabbed up for not-so-great purposes:

Flight Attendant Union Fights Google's Bid for Spirit Airlines Crew Data in Bankruptcy Sale

A flight attendant union is fighting to block Google's $10 million purchase of Spirit Airlines' crew data, warning deidentification may not fully protect individual flight attendants.

www.paddleyourownkanoo.com