The iPhone Upgrade Program was a 24-month 0% financing program for iPhones. The replacement Apple Upgrade<https://www.apple.com/shop/apple-upgrade> is a leasing program that also covers iPads, Macs, and Apple Watches.
Instead of automatically owning the device after making all payments, you can choose return/upgrade/buy it at the end of the lease. The new program is backed by Klarna instead of Citizens Bank, uses a soft credit check, and no longer includes AppleCare+ by default.
The fact that the page is not particularly clear about any of this should tell you everything you need to know about this change.
On the other hand, that is a way to hide a price increase. Also, those doing this are almost obliged to take AppleCare, as (https://www.apple.com/shop/apple-upgrade):
“What do I do if my device gets lost or is stolen?
If you have AppleCare+ Theft and Loss for your iPhone, iPad, or Apple Watch, you can file a claim at mysupport.apple.com/theftandloss.
If you don't have AppleCare+ Theft and Loss coverage and your device is stolen or lost, you'll need to close out your lease by paying the early termination fee or choose to pay the purchase option fee (plus any applicable taxes and fees). You can do that at an Apple Store, or through the Klarna app. You can then start a new lease with Apple Upgrade, finance with Apple, or buy your next device with a one-time payment.
You will continue to be charged your monthly lease payments until you either pay the early termination fee or purchase option fee. If you take no action, Klarna will continue to charge you your monthly lease payment through the extension period, and you will be charged the purchase option fee through Klarna.”
So if the target demographic, the person that does not have money to buy an iPhone outright, is mugged, they need to essentially buy the iPhone outright or they start racking up interest and fees.
(I don’t care if they say the target demographic is “people who upgrade every 2 years” instead. If that were really the case, you don’t need financing, just a buy-back program)
It’s not the same. With a mobile carrier, you could just continue to make monthly payments as normal, and at the end of your contract, the payments stop.
With this program, you can either pay a lump sum to cancel the lease early, or you can continue making monthly payments, but at the 24-month mark, since you can’t return the phone, you’ll still owe them $430.
Fairly certain there is no forgiveness with lease terms. Also, Im surprised that Apple Care is not a requirement, but it seem more like a decision to put the risk on the lender rather than Apple in the case of loss. I would expect a majority of people to buy the apple care for a few dollars more per month.
Mugging is not a good example. If the phone is stolen that would typically be covered under the personal property coverage included on most homeowners or renters insurance.
Great, lets remove the option of refined sugar, alcohol, saturated fats, detached single family homes (due to it resulting in individual cars, the leading cause of injury and death, and expenses that leads to "debt slavery"), etc.
Also, no more leasing/renting cars, or really any kind of borrowing at all, as people should not have the option to become liable in the future, for anything. Because if a $1,000 to $2,000 lease puts them in a spiral of debt slavery, anything more than that surely will.
You’re being sarcastic, but I actually kind of agree.
Not that these options should be removed, but that they should be priced according to their costs to society.
You see that with alcohol and cigarettes in developed countries.
Leases should be more tightly regulated and require full coverage insurance. It already works like that for cars.
Borrowing is fine insofar as the payments or debt don’t interfere with your ability to survive. A bad credit score shouldn’t prevent you from living under a roof or getting a job. UBI would make this much easier in practice.
>Leases should be more tightly regulated and require full coverage insurance. It already works like that for cars.
Not by law, but because the lender requires it. In this case, the lender doesn’t. There is no evil or not evil, it’s just a business decision based on the value of the collateral and likelihood of loss.
Given that the median household income in the US is $83k, I don’t think that losing $1k on a busted phone is likely to put many into “spiraling debt slavery”
It's not specifically the option to skip insurance, it's the option to finance something so prone to damage without insurance. And yeah, it's bad for that to be an option.
Yes, this appears to be entirely about raising the price of iPhones without raising the cost of iPhones. Most people don’t buy it out right so they need a way to ease the prices raised by keeping the monthly payments around the same. The difference is you have to return the phone at the end instead of owning it.
Man, the concept of leasing a phone is grim. The way hardware gets locked down these days, it feels like you never really own it in the first place. Leasing makes it explicit: you don't.
You'll own nothing and you'll feel weird about it.
Instead of automatically owning the device after making all payments, you can choose return/upgrade/buy it at the end of the lease. The new program is backed by Klarna instead of Citizens Bank, uses a soft credit check, and no longer includes AppleCare+ by default.
The fact that the page is not particularly clear about any of this should tell you everything you need to know about this change.