Alongside the new Iphone 6s and iPhone 6s Plus, Apple introduced their new iPhone upgrade program. The program allows you to finance your new iPhone directly with Apple with 24 monthly payments and 0% interest. It’s important to remember, this is NOT a lease, and you will own the phone at the end of the 24 payments.

The Pros

• Instead of an upfront lump sum, you can spread the cost over 2 years.
• Apple allows you to upgrade every year, by trading in your iPhone that you are currently financing. For example. you acquire an iPhone 6s with the upgrade program. Next year when the iPhone 7 is released, you can trade in your iPhone 6s which will pay for your remaining 12 payments. In exchange you will receive a new iPhone 7 and will start a new 24 month financing plan.
• Your phone will include AppleCare.
• The phone will be unlocked for any of the 4 major providers after being activated.

Cons

• The payment plan includes the AppleCare cost and service even if you don’t want it.
• The program is only available through the Apple Store. This means that you do not need to be eligible for an upgrade from your wireless carrier.
• You need to have either AT&T, Verizon, Sprint, or T-Mobile. The phone MUST be activated in the store with one of the four, and will NOT work for No-Contract carriers because they do not have unlocked versions of the phone at this time.
• iPhones that are traded in for a new one must have normal wear and tear, no cracks. However, Apple Care will replace any cracks.

Is it Worth It?

Scenario A

You receive your new phone from the Apple Store with $0 up front fee, but will be required to pay $32.45/month. After 24 months, this cost you a total of $778.80. You sell the phone for $240. Your cost to own the phone for two years is now $538.80. Since you also receive a subsidized priced upgrade from your wireless provider once every two years, you might as well use it and immediately sell the brand new phone. You pay $200 for a second iPhone and sell it on Ebay for $649. This brings your cost for the Apple upgrade program iPhone down to -$89.80 for two years.

Scenario B

You pay for your phone upfront at a cost of $649. You sell the phone for $240 after two years and your total cost comes down to $409. Since you also receive a subsidized priced upgrade from your wireless provider once every two years, you might as well use it and immediately sell the brand new phone. You pay $200 for a second iPhone and sell it on Ebay for $649. This nets you a +$40 after the two years for the Apple upgrade program iPhone.

Scenario C

You buy a subsidized iphone from your wireless provider for $200. You sell the phone after two years for $240, which nets you +$40.

The first scenario includes the price of AppleCare ($129) which makes the monthly payments more costly than scenario B. However, if you plan to buy AppleCare anyways, you might as well take advantage of paying off the phone on an interest-free loan. However, scenario B and C will cost you the least if you don’t want AppleCare. In fact, they most likely will earn you a profit. Personally, to keep everything simple, I plan on sticking with the traditional wireless provider upgrade once every two years. If I absolutely need to have the new iPhone every year, then I can sell my upgraded phone and outright buy the new one for $649.

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