Calculating the Value of an Apple Upgrade: Make an Informed Decision

Apple recently introduced the Apple Upgrade program as a replacement for the original iPhone Upgrade Program. Unlike its predecessor, this new program extends beyond just iPhones to include a variety of Apple devices. While existing members of the iPhone Upgrade Program can continue with their current payment plans, new enrollments are currently closed.

The iPhone Upgrade Program allowed customers to spread the cost of the device over 24 monthly payments with 0 percent interest, following a rigorous credit check. By the end of the two-year term, the device was fully paid off, and the customer owned the phone.

This program essentially functioned as a loan, offering interest-free financing and the ability to upgrade to the latest iPhone model after one year. Any remaining payments for the current device would be waived, and the two-year term would start over. Additionally, AppleCare+ was included in the monthly payment.

The new Apple Upgrade program operates differently. Instead of a hard credit check, there is now a soft credit inquiry to assess eligibility. This program functions more as a lease rather than a loan, offering leasing options for 12- and 24-month terms for iPhones and Apple Watches, and 24- and 36-month terms for Macs and iPads.

At the end of the lease period, customers are required to return the device to an Apple Store or ship it back. Early upgrades necessitate payment of the remaining lease payments. Failure to return the device at the end of the lease period results in a month-to-month fee for up to six months, with a potential purchase fee thereafter. AppleCare+ is no longer included in the program and comes at an additional cost. Damaged devices may incur additional charges.

Let’s delve into some numbers for a better understanding. For instance, the 14-inch MacBook Pro with specific configurations priced at $1,999 could be leased for $53.99/month for 24 months or $38.99/month for 36 months, not including taxes or trade-in credits. Adding AppleCare+ would incur an additional $10.49/month.

Upon completion of the lease term, customers have the option to purchase the device by paying the retail value minus the total lease payments. For example, a 24-month lease for the MacBook Pro would require around $700 plus tax for ownership, while a 36-month lease would amount to approximately $600, excluding tax.

While the Apple Upgrade program offers accessibility to premium Apple products, it’s essential to recognize that it still involves debt and deferred payments. Individuals should carefully evaluate their financial situation before committing to the program. Considering alternative options like private resale opportunities for outright purchases is also advisable. Apple Card holders, for instance, have the option to finance the MacBook Pro interest-free for 12 months, providing ownership and flexibility.

Apple’s new Upgrade program reflects the company’s efforts to manage costs and cater to customer needs. While it may suit some consumers, the exclusion of budget-friendly products like the MacBook Neo, Mac mini, and base iPad raises questions about its consumer-centric approach.

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