What’s the benefit of the Apple Upgrade Program?

Apple’s new Upgrade Program is here, allowing you to lease select iPhone, iPad, Mac, and Watch models for a relatively low monthly payment. The company promises that you won’t pay more than the full price of the device over the course of a one- to three-year lease, and in some cases, you’ll pay hundreds of dollars less.

The basics of the software make it seem like an amazing deal… so surely there must be a problem, right?

The answer mainly depends on how you use the upgrade software. At least with current prices, a diligent user should be able to make a monthly payment, switch in their phone after a year or so, and move on. But like any program that involves monthly payments and trade-offs, there are caveats you should be aware of — the most important of which is your ability to continue paying on time throughout the term of the contract.

The basics of the program work like this: You’ll pay the same monthly fee for the duration of your contract. At the end of the lease, you have three options. One such option is to purchase the device by paying the difference between what you paid and its remaining cost. For example, if you paid $695.76 to lease an iPhone Air for two years, you’d have to pay an additional $303.24 to buy it at $999.

Here’s a breakdown of how much you’ll pay for devices included in the Apple Upgrade Program, plus how much you’ll pay for the full purchase at the end of your lease:

Then there are the other two options. At the end of the lease, you can also choose to simply end the contract there, although you will then have to return the device and lose any potential resale or exchange value. Or you can upgrade to another device right away and switch to whatever monthly payment the new device requires.

The biggest problem with an upgrade program is that in the end it’s just a loan, and like any loan, there’s a contract, along with potential fees and terms that you have to adhere to.

Apple says there are no late fees or interest on the loans, which are offered through its buy now, pay later service Klarna. In a statement to EdgeIf someone misses three payments in a row, the company “will terminate the lease and the customer will need to pay the full balance due,” says Claire Nordstrom, a Klarna spokeswoman.

Klarna did not say what would happen if you didn’t pay the balance due. but, Support page about payments Klarna says that if payment is not recorded “by the last reminder due date, the debt will be transferred to debt collection,” though it’s unclear if this applies to Apple’s upgrade program. Edge I contacted Klarna for more information but there was no immediate response.

And while 9to5Mac An icon has been spotted indicating that Apple can place your phone In “restricted mode” for missed paymentsApple spokesman Brian Bumbry confirmed “There will be no limitations on device functionality due to missed payments or defaults with the Apple Upgrade Program.”

Apple Upgrade payments can also accumulate on other bills and subscriptions you may have. The potential for debt accumulation is a major issue with BNPL services like Klarna, with nearly half of users making a late payment on one of their loans in 2025, According to LendingTree. Klarna also uses customer data for Sell ​​personalized ads.

During the lease, Klarna owns your device. You are responsible for any damage, and you will be charged a fee if you do not return the device in “good condition.” That’s why Apple encourages customers to sign up for an AppleCare subscription, which can increase the cost of the lease even more. AppleCare costs $9.99 per month and up to protect iPhones, while iPad protection starts at $5.49 per month; Mac coverage starts at $3.99 per month; Protection for Watch Series 11 and up is $4.99 per month. You can also pay $19.99 per month to protect up to three devices.

Apple also points out that you’ll have to pay an early termination fee if you want to return the device before your lease expires or if you want to upgrade early. Additionally, Apple says you’ll have six months to decide whether you want to upgrade your existing device and return it after the loan, exit the program, or buy your device outright. You’ll be charged your monthly payment during this period, making the program less relevant if you don’t select an option right away.

But even with lower monthly payments for a device lease, you’ll still likely lose some extra cash if you choose to upgrade your device instead of buying it outright.

Let’s say you leased an iPhone 17 and paid $551.76 over the course of a two-year lease. If you choose to upgrade to the next iPhone instead of paying the extra $247.24 to buy the iPhone 17 at its original price of $799, you’ll lose cash you could earn by selling or trading in the device.

Data from price Comparison site SellUp suggests iPhones lose about 35 to 40 percent of their value two years after their launch. If we apply this logic to the iPhone 17, that means you could resell a two-year-old used device for about $520 if it lost 35 percent of its value. In other words, you’d only spend $279 to use the phone for two years. You’ll get a little less than trading in a device through Apple or the Back Market, but either way, if you upgrade a leased device right away, you won’t get any of your money back.

With all this in mind, Apple’s upgrade program may not be the best way to get the company’s latest products, especially if you need or want the flexibility to move from your device freely. But as prices rise for new phones, tablets and laptops, it’s an alternative for people who can’t afford a whole new device or prefer lower monthly payments than those offered through Apple, as long as they understand the risks.