GoKawiilApple today officially announced its Apple Upgrade leasing program, and it works in the way we expected. While it does make products more affordable on a monthly basis, it leaves people at risk of being trapped into a never-ending lease cycle.
That’s because, unlike the iPhone Upgrade Program it partly replaces, you don’t own the device outright at the end of the term …
With Apple product prices higher than ever, there’s no arguing with the fact that there’s an appeal to making devices more affordable. The Apple Upgrade program certainly achieves this when looking solely at the monthly payments.
For example, you can lease a MacBook Pro with 16GB memory and 1TB storage for as little as $38.99 per month. This approach brings more Apple devices within reach of more consumers, and this aspect of it is for sure a good thing.
The danger with the Apple Upgrade program
The danger, however, is the one I anticipated last week: that people will use this program in exactly the same way as a car lease. While you have the option of making a balloon payment at the end of the lease term in order to own the car outright, almost nobody does so. The vast majority of those leasing a car return it and lease a new one, starting the cycle all over again.
The same thing could happen with the Apple Upgrade program. In order to own the product outright, you have to make a balloon payment equal to the difference between the total lease payments you’ve made and the full initial retail cost of the device.
Let’s see how that would work with the MacBook Pro referenced above (rounding the totals to the nearest dollar):
36-month option
Monthly payment: $38.99
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