Apple has officially launched a new device leasing program in the United States called Apple Upgrade, replacing the long-running iPhone Upgrade Program. In partnership with Klarna, the program allows customers to lease iPhones, Apple Watches, Macs, and iPads with low monthly payments. While the entry-level prices are appealing, experts say it is important to understand the leasing structure and read the fine print before signing up.

Under the Apple Upgrade program, which is a hardware leasing agreement rather than a purchase plan, Klarna owns the device during the lease term and monthly payments cover the use of that device rather than progress toward ownership. Available devices include iPhone, Apple Watch, Mac, and iPad, with lease terms of 12 or 24 months for iPhone and Apple Watch, and 24 or 36 months for Mac and iPad. Starting prices are $17.99 per month for iPhone, $11.99 per month for Apple Watch, $24.99 per month for Mac, and $11.99 per month for iPad. Klarna handles the lease and payment processing, and a soft credit pull is conducted that does not impact the customer’s credit score. Customers can reduce monthly payments by trading in an eligible device, and those who pay with Apple Card can earn 3% Daily Cash back on lease payments. One key detail is that AppleCare+ is not included in the lease price and must be purchased separately, a significant change from the old iPhone Upgrade Program, with AppleCare+ for an iPhone costing between $9.99 and $13.99 per month.

To understand whether this is a good deal, it is helpful to compare the new lease structure with the previous program and traditional buying. The Apple Upgrade program is structured as a lease where the customer does not own the device during the term, whereas the old iPhone Upgrade Program was an installment loan where payments went toward ownership, and Apple Card Installments offer 0% financing also toward ownership. AppleCare+ is not included in the new program but was included in the old iPhone Upgrade Program monthly price, and it is also not included in Apple Card Installments. At the end of the lease term, customers must return the device, upgrade, or pay a final fee to keep it, while under the old program and Apple Card Installments, customers own the device after the final payment. Early exit from the lease may incur substantial fees, whereas the old program allows settling the remaining loan balance and Apple Card Installments allows paying off the remaining balance.

Apple provides a clear example of how the math works on a 256GB iPhone 17 Pro with a retail price of $1,099. Under a 24-month lease at $31.99 per month, the total paid over 24 months would be $767.76, with a final payment of $331.24 to keep the phone, bringing the total cost to own to $1,099, the full retail price. Under a 12-month lease at $45.99 per month, the total paid over 12 months would be $551.88, with a final payment of $547.12 to keep the phone. This demonstrates that leasing does not save money if the customer wants to keep the device, as the full retail price must still be paid in the end.

For certain users, the Apple Upgrade program offers clear benefits. For frequent upgraders who like having the latest iPhone or Apple Watch every year or two, the program offers a convenient way to do so without the hassle of selling old devices. The program significantly lowers the monthly barrier to entry for Apple’s premium products, making them more accessible to a broader range of customers, and offers fixed, predictable monthly costs that can help with budgeting.

However, experts and analysts have pointed out several significant drawbacks. At the end of the lease, the customer owns nothing unless a final lump-sum payment is made, essentially renting the device. The program does not offer any discount compared to buying outright, as it is about convenience and payment structure rather than a special deal. Ending a lease early can incur substantial fees, potentially including the full remaining balance of the device. For iPhones, customers must have a postpaid plan with AT&T, Verizon, or T-Mobile, as prepaid plans and MVNOs like Mint Mobile are not accepted. If three consecutive payments are missed, Klarna will terminate the lease and the full balance of the device becomes due immediately. The advertised low monthly price does not include insurance, requiring extra payment for coverage, and devices must be returned in good condition or additional charges will apply, with damage incurring repair fees.

The Apple Upgrade program is a strategic shift for Apple designed to make its increasingly expensive products more accessible through lower monthly payments and to encourage more frequent upgrades. The program is best suited for users who value convenience and want a hassle-free way to always have the latest device, prefer lower monthly payments over a large upfront cost, and do not want to deal with selling their old devices privately. The program is not a good fit for users who prefer to own their devices outright, keep their devices for more than two or three years, or are looking to save money, as the total cost is the same as buying upfront. Ultimately, as personal finance experts advise, the decision comes down to personal financial goals and how devices are used. If upgrading frequently and valuing convenience, the program could be a great fit, while if preferring to own devices and keep them for the long term, the Apple Card’s 0% financing or buying outright may be a better option.