Apple launches Upgrade program offering lease options for iPhone, iPad, Mac and Watch
Apple's new Upgrade program lets customers lease selected devices for a fixed monthly fee, with options to purchase, return, or upgrade at lease end, but users must meet payment obligations and may face additional costs.
Apple has introduced an Upgrade program that allows customers to lease certain iPhone, iPad, Mac and Apple Watch models for a fixed monthly payment over one to three years. At the end of the lease, users can either buy the device by paying the remaining balance, return it with no resale value, or upgrade to a new device and begin a new payment schedule.
The program is structured as a loan provided through Klarna’s buy-now-pay-later service. Apple states there are no interest charges or late fees, but Klarna warns that missing three consecutive payments will result in termination of the lease and a requirement to pay the full outstanding balance. Klarna’s support materials indicate that unpaid balances may be sent to collections, though Apple has not confirmed how this would apply to the Upgrade program.
"If a person misses three payments in a row, the company will terminate the lease agreement and the customer will need to pay the full outstanding balance," Klarna spokesperson Clare Nordstrom said.
Apple confirmed that missed payments will not restrict device functionality. However, Klarna retains ownership of the device during the lease, and customers are liable for damage or failure to return the device in good condition, which may incur fees. Apple encourages users to add AppleCare coverage, which adds a monthly cost ranging from $3.99 to $9.99 depending on the device.
Early termination of the lease or upgrading before the contract term ends triggers an early-termination fee. After the lease ends, Apple gives customers six months to decide whether to upgrade, purchase, or return the device, during which monthly payments continue.
Analysts note that leasing may result in higher overall cost compared with purchasing outright, especially if users upgrade before the device’s resale value declines. Data from resale platforms suggest iPhones lose about 35-40 % of their value after two years, meaning a leased device returned early would not generate any resale proceeds.
The Upgrade program may appeal to consumers who prefer lower monthly payments or cannot afford to buy devices outright, but participants should be aware of the contractual obligations, potential fees and the fact that the lease does not provide the flexibility of owning the device.