Apple’s iPhone Upgrade Program Dissected

Category: Features

One of the more interesting things Apple announced today was the iPhone Upgrade Program. It’s Apple realising that there’s a lot of us who buy a new iPhone every year and will probably do so until we die. I’ve wanted this for a long time – a simple flat rate I pay Apple every month and they keep me flush with new iPhones, iPads, Macs and Apple Watches. At this stage the program is just iPhones and just in the US but Apple did say they plan to roll it out to outside the US eventually.

The iPhone Upgrade Program includes AppleCare+ and is financed through Citizens One, which is a microfinance company in the USA. This entails a credit check and the usual stuff surrounding a loan. The program is pretty much a personal 24 month loan with the option to renew the loan with a new phone after 12 months (i.e: the new iPhone). If you have no credit/bad credit, this probably won’t work for you.

I decided to hypothesise if it’s worth it for me when the program starts here eventually (starting with iPhone 7 I assume).

  • The cost outright for a 64GB iPhone 6s with AppleCare+ is A$1358.
  • Should be able to sell the phone for $750, if not more (lets see how the AUD is tracking in 12 months time) when the iPhone 7 comes out.
  • That makes the out of pocket price $608.
  • In the US the upgrade program is US$36.58/m for the 64GB iPhone 6s.
  • USD$37 in AUD + 10% for GST = AU$58/m
  • $58/m x 12 = $696/yr

The upgrade plan will set you back an extra ~$100/yr, making buying the phone outright then selling later the cheaper option. If you can’t be stuffed selling the phone later though, buying it direct from Apple with the upgrade program isn’t a bad idea.

If you’re still keen to avoid the upfront purchase price of the iPhone 6 and would like to spread the cost out over 12 months, an alternative is just to apply for a low interest credit card and ask for a ~$1500 credit limit.

  • NAB has a 0% interest promo on purchases with its low rate credit card for 12 months, with a $59 annual fee.
  • $1417 all up for the phone, AppleCare+ and annual fee.
  • Pay back $51/month, will leave you with an $805 balance when the new iPhone comes out.
  • Sell your old iPhone, repay the balance in full using the proceeds of the sale then cancel the card and look for whatever new promo is out there with a lower fee and repeat.

You get all the benefits of paying it back over 12 months with no interest and without having to wait for Apple to bring the program to Australia.

So when there’s a will to get an iPhone without ponying up $1500 at once (or even $3000 if you and your partner have a penchant for iPhones like mine does), there’s a way.

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