Unraveling the Apple Upgrade Program: What’s the Fine Print?

Apple’s New Upgrade Program: Is It Really Worth It?

Apple has introduced a new Upgrade program that allows you to lease select models of iPhones, iPads, Macs, and Watches with a relatively low monthly payment. The company promises that you won’t pay more than the full price of the device over the course of the one- to three-year lease, and in some cases, you’ll pay hundreds of dollars less.

At first glance, the program seems like a fantastic deal. But is there a catch?

The answer depends on how you utilize the Upgrade Program. While diligent users should be able to make monthly payments, swap their phone a year or more later, and continue the cycle, there are caveats to be aware of. The most crucial of these is your ability to keep up with payments throughout the contract.

Here’s how the program works: You pay a fixed monthly fee throughout the lease. At the end of the lease, you have three options. One option is to purchase the device by paying the difference between what you’ve paid and its remaining cost. For example, if you pay $695.76 to lease an iPhone Air for two years, you’d have to pay an extra $303.24 to purchase it at its $999 price tag.

Another option at the end of the lease is to return the device and lose any potential resale or trade-in value. Alternatively, you can upgrade to another device immediately and switch to the new device’s monthly payment plan.

However, the biggest catch of the Upgrade Program is that it’s essentially a loan, complete with a contract, possible fees, and terms you must adhere to.

According to Apple, there are no late fees or interest on the loans, which are facilitated through the buy now, pay later service Klarna. If a person misses three payments in a row, Klarna will terminate the lease agreement, and the customer will need to pay the full outstanding balance.

While Klarna does not specify the consequences of not paying the outstanding balance, a support page mentions that missed payments may result in the debt being transferred to debt collection. However, it is unclear if this applies to the Apple Upgrade program.

Additionally, Apple has clarified that there will be no limitations on device functionality due to missed payments or defaults with the Apple Upgrade Program.

It’s essential to note that Apple Upgrade payments can add to your existing bills and subscriptions. The possibility of accruing debt is a significant concern with services like Klarna, with nearly half of users paying late on one of their loans in 2025. Klarna also leverages customer data for personalized ads.

During the lease, Klarna owns the device, and you are responsible for any damage. You may incur a fee if you fail to return the device in good condition. Apple recommends signing up for an AppleCare subscription to protect your device, which can increase the overall cost of your lease. AppleCare costs vary depending on the device.

If you decide to terminate the lease early or upgrade before the end of the contract, you may face an early termination fee. Apple provides a six-month window after the lease ends to decide whether to upgrade, return the device, exit the program, or purchase the device outright. However, monthly payments continue during this period.

While the lower monthly payments for leasing a device may seem appealing, choosing to upgrade instead of purchasing outright could result in missing out on potential resale value. Devices such as iPhones typically lose around 35 to 40 percent of their value two years after launch. Therefore, by upgrading a leased device immediately, you may not recoup any of your initial investment.

Considering all the factors, Apple’s Upgrade program may not be the optimal way to acquire the latest products if you value flexibility in owning your device. However, for individuals unable to afford a new device upfront or prefer lower monthly payments, the program can be a viable alternative, provided they understand the associated risks.

Follow topics and authors from this story to receive more content like this in your personalized feed and email updates.

• Emma Roth
• Analysis
• Apple
• iPhone
• macOS
• Report
• Tech