Wonder if anyone would buy this way...

[Gregintosh]

I just had a discussion with a buddy and I wonder if this is something that would work.

What if instead of spending the $2,200 on a Macbook Pro retina you could just pay $200 down and $99 a month for 12 months.

Then after the 12 months you return it (lease is over) and you can do the same again on the next model.

This way, you don't have to cough up all the cash at once to have the computer you want AND you don't have to worry about going through all the hassles of selling it on Craigslist or eBay either so that you can raise enough cash to buy the next model.

You could simply instead just pay $200 down and $99 a month for 12 months again on next year's model. Or maybe just continue paying $99 a month and after 12 months you are automatically given the most current model (swapped out for you).

I think this would be ideal for people who are on a tight budget or people who always want the latest and greatest and hate the hassle of selling their old stuff to get the new stuff and would prefer to just automatically receive the new one.

What do you guys think? Would anyone actually do this if it were available?

 

[KPOM]

I think this was actually a fairly common type of transaction in the business world back in the 1980s when computers were $5,000 or more (roughly $10,000 in today's dollars). It is still the business model for copiers.

Even at $2,000 the business model falls apart, though. There is a lot of credit risk involved in financing relatively small-ticket consumer items, particularly technology which loses its value more quickly than cars. Therefore, lease rates (which incorporate financing costs) wouldn't be very good. A bank would be reluctant to purchase those loans, and I doubt Apple wants to deal with the regulatory hassle of setting up an in-house finance company.

That said, T-Mobile will be trying a form of that when they switch to their no-subsidy model for selling phones later this year. If there is an audience for the pay-as-you-go model for $649-$849 iPhones, we might see this expanded onto other products. It would still be cheaper for most people just to buy outright.

 

[calderone]

http://www.apple.com/financing/business.html

Many businesses do just that...

 

[Gregintosh]

That looks interesting. But I specifically mention 12 month options because 2-3 years does not satisfy the people who always want the latest and greatest.

From a business perspective, here is how I imagine it would operate.

Let's say we get a deal and buy MBPr 15" for $2,000.

Customer pays $200 down, and $99 a month. So over 12 months they have paid $1,388.

Then we get the equipment back (lease terms would obviously specify it must be in good condition or else they will have to cover any damages). A $2,000 MBPr could probably be sold for at least $1,300 after 1 year as a used unit on eBay or Craigslist (actually probably more than that, but let's be conservative).

So that means for a $2,000 unit I got $2,688 -- $688 profit after 12 months. That's a 34% return on my money - sure beats the bank, and much safer than stocks or even real estate (which typically returns maybe 5% to 7% if you're lucky with good tenants and requires a huge investment; not to mention has the potential to cost you more money than you invested where as if something goes wrong with my plan the most I can lose is what I spent on the computers minus the $200 down payment).

Obviously, there's admin costs, but those can be small if spread out over a large number of units (like you would not go into this business doing 5 units, but maybe 100 units or so, at which point you got $68,800 coming your way so even if you spend $20k on admin costs you still got a $48k a year income).

It's not risk-free (as any other thing in life) but I think it might be a workable model.

The only question is would people want to buy things on a 1-year lease.

I think it's more attractive than the Apple options since they all require 2-3 years. I am also not sure what they charge monthly.

But if the lease is only 1 year, you basically can always have the latest. On a 3-year lease you're going to fall 2-3 generations behind before you can swap out. While that's a practical thing to do, I am thinking of a service that would cater to the crowd of people who always want the latest and greatest.