If you’re already making monthly payments on your iPhone through T-Mobile, Verizon or another wireless carrier, Apple’s new Upgrade program may sound familiar.
It isn’t.
While many carrier payment plans help you buy your phone over time, Apple’s new program lets you lease certain Apple devices—including iPhones, Apple Watches, iPads and Macs. When the lease ends, you can return the device, lease a newer model or make a final payment to buy the one you’ve been using.
The new program, offered through Klarna, replaces Apple’s previous iPhone Upgrade Program and iPhone Payments program for new customers, although other ways to finance Apple products—including carrier financing and Apple Card Monthly Installments for eligible customers—remain available.
Think of it Like Leasing a Car
The easiest way to understand Apple’s new program is to compare it to leasing a car.
When you finance a phone through your wireless carrier, you’re gradually buying it. Once the payments end, the phone is yours.
With Apple’s lease, you’re paying to use the device for a set period. Unless you make the final purchase payment, you don’t own it.
Monthly payments start at $17.99, depending on the product and lease term. Customers apply through Klarna, which performs a soft credit check that generally doesn’t affect a credit score.
Three Choices at the End
When your lease expires, you have three options:
- Return the device and end the lease.
- Return it and lease a newer model.
- Make a final payment and purchase the device.
If you choose to return the device, you’ll need to back up your information, transfer your data to your new device and erase your personal information before turning it in.
You’ll also want to pay attention to its condition. If you own a phone or laptop, scratches or dents simply become part of your device. With a lease, excessive damage could lead to additional charges when the device is returned. Apple has not yet released detailed return standards for the new program, so it’s worth reviewing the lease agreement to understand what is considered normal wear and tear before signing up.
Better for Phones—or for Computers?
For many people, the program may be less attractive for iPhones than it first appears.
Millions of customers already finance phones through their wireless carrier. They make monthly payments for two or three years, then own the phone outright. Many continue using it for several more years without another device payment.
Apple’s lease offers more flexibility for people who always want the newest iPhone. Instead of paying off one phone and keeping it, customers can simply return it and lease the latest model. The trade-off is that if you continue upgrading every few years, you could also continue making device payments indefinitely.
The bigger opportunity may actually be with MacBooks and iPads.
Unlike smartphones, computers typically aren’t financed through your wireless carrier. And because many MacBooks cost $2,000 or more, spreading the cost over monthly payments may make them more affordable for students, families and small business owners.
Still, there’s an important trade-off.
Many people keep a laptop for six years or longer. If you’re that type of buyer, purchasing the computer—and eventually reaching a point where you own it free and clear—may provide better long-term value than starting a new lease every few years.
Which Option is Right For You?
Apple’s new lease program may be a good fit if you always want the latest technology and don’t mind making ongoing monthly payments.
It may also appeal to people shopping for a high-priced MacBook or iPad who would rather spread the cost over time than make a large upfront purchase.
But if you’re someone who typically keeps a phone or laptop for years after it’s paid off, buying may still be the smarter financial move.
The biggest question isn’t whether leasing is good or bad.
It’s whether you’d rather always have the newest device—or eventually have no device payment at all.