Apple’s new Upgrade program sounds almost too good to be true. For a relatively low monthly payment, you can lease select iPhones, iPads, Macs, and Apple Watches over a one- to three-year period. The company promises you’ll never pay more than the full retail price of the device, and in some cases you could save hundreds of dollars compared to buying outright. But anyone who has ever dealt with a lease or a financing plan knows there’s usually fine print hiding somewhere.
At the end of your lease, you face three choices. You can pay the difference between what you’ve already shelled out and the remaining cost of the device to own it outright. You can hand the device back and walk away, though you lose any resale or trade-in value that way. Or you can upgrade to a newer model and start a new payment plan. The mechanics are straightforward enough, but the real complications lurk in how the loan is managed behind the scenes.
The loans are handled through Klarna, the buy-now-pay-later service, which means Klarna actually owns your device during the lease. There are no late fees or interest charges, but if you miss three payments in a row, Klarna will terminate the agreement and demand the full outstanding balance immediately. If that goes unpaid, Klarna’s support pages suggest the debt could be sent to collections. During the lease, you’re also on the hook for any damage to the device, which is why Apple pushes customers toward adding an AppleCare subscription on top of their monthly payment. And if you want out early or want to upgrade before your term ends, expect to pay an early termination fee.
Perhaps the biggest hidden cost comes when it’s time to upgrade. If you lease an iPhone 17 for two years at around $552 total and then trade it in rather than paying roughly $247 more to own it outright, you forfeit any money you might have made selling or trading in that used phone yourself. Pricing data from SellUp suggests iPhones typically retain about 60 to 65 percent of their value after two years, meaning a two-year-old iPhone 17 could fetch around $520 on the resale market. That would bring your net cost down to about $279 instead of $552 — a significant difference that leasing customers never see.
For people who can’t afford to drop hundreds of dollars upfront or who simply prefer smaller monthly bills, the Upgrade program offers a genuine alternative as long as they understand they’re taking on debt backed by a third-party lender. But for anyone who values flexibility, wants maximum resale value, or tends to be forgetful about due dates, this deal carries enough strings attached to warrant serious caution before signing up.