Apple’s New iPhone Leasing Program: What It Means Before You Upgrade

Apple recently launched its new Apple Upgrade program for customers in the United States. This program changes the way people acquire hardware by shifting from traditional financing to a leasing model through Klarna. While the old iPhone Upgrade Program focused on ownership, this new approach treats iPhones, Macs, iPads, and Apple Watches as leased assets.

Under this system, customers choose from specific lease terms. iPhones and Apple Watches are available on 12 or 24-month cycles, while Macs and iPads fall under 24 or 36-month terms. Applications undergo a soft credit inquiry through Klarna and generally require no initial down payment. Once the lease period ends, users have three specific options: they can return the device, choose to purchase it through a buyout payment, or upgrade to a newer model.

This shift moves Apple toward a recurring revenue model similar to vehicle leasing. Frequent upgraders may find this setup beneficial because it lowers initial costs and provides a clear pathway to newer technology. However, it is important to note that unlike the previous program, AppleCare+ is not included in the monthly price and must be purchased as a separate item.

Existing members of the older iPhone Upgrade Program can remain on their current plans until they become eligible for an upgrade. At that point, the company will prompt them to move to this new leasing model, choose traditional financing through the Apple Card, or buy the device outright. This program is currently available at retail stores, the Apple Store app, and the company website.