If you’re leasing an iPhone, you’ll need to connect to AT&T, T-Mobile, or Verizon when you enroll. You can lease an iPad, Mac, or Apple Watch without a carrier connection.
So I’m guessing the phone would be unlocked, but you’d need to at least initially connect to one of their “big three” carrier partners. No MVNO.
It’s not unspecified. Again, per Apple:
If you decide to upgrade or return your device at the end of your lease term, the total of your lease payments you made will be less than the full list price of the device at lease signing (excluding tax and any damage fees). If you decide to buy the device, the purchase option fee is the list price minus any lease payments you’ve made minus any remaining discounts or trade-in credit. (excluding tax and any damage fees).
If you know you’re going to buy the device, it’s effectively 24- or 36-month interest-free financing.
If you’re the sort who always wants to upgrade your device after a couple of years, I think this program + AppleCare it’s probably very similar in price to Apple’s previous iPhone upgrade offering.
Leasing, subscribing, and renting are seldom good financial decisions. There may be reasons other than financial ones for doing so, but to make payments and not own anything costs more in the long run than purchasing, owning, and keeping for an extended period.
Still, the fine print is: those devices never will be your devices (in contrast to the previous program), unless you purchase them in the end of the lease. You do not own them (“Do I own my device at the end of my lease term? - No, you do not. You must return your device in good working condition at the end of your lease term.”). That in combination with built-in restrictions into the OS as mentioned above is not my cup of tea.
No, it is not required. It is optional. From the FAQ:
No, AppleCare coverage is not included with your Apple Upgrade lease. If you choose to purchase AppleCare protection, it will be billed separately from your lease by Apple. (…) Adding a plan like AppleCare+ (…) can help avoid damage fees under the lease when you’re returning your device at the end of your lease term. (…) What do I do if my device gets lost or is stolen? (…) If you don’t have AppleCare+ Theft and Loss coverage and your device is stolen or lost, you’ll need to close out your lease by paying the early termination fee or choose to pay the purchase option fee (plus any applicable taxes and fees). (…)
That’s all 100% true if there’s interest involved. From everything I’m seeing, there isn’t.
If you’re in the “just pay cash, so you own it” camp, the net outcome of the Apple lease is that at the end of the lease when you make your final large payment (i.e. you pay it off), the cost is the same as what you would have paid up front. And you own the device either way (paid up front vs. paid off lease).
The ways it would cost more (and don’t get me wrong, the ways they’re hoping to make money from) are if you want to back out of the lease early, if you want to constantly upgrade, if you wind up spending way more than you can afford, if you’re late making payments, etc.
The Apple lease looks to be a great plan if you’re spending reasonably and leasing to own. It’s a horrible plan if you’re looking to get on the “neverending lease” treadmill and/or are buying past your ability to pay.
That’s technically true, but in practice it’s all up to you. Apple is basically clarifying that your lease payments don’t pay off the device, in contrast to Apple’s other 12 month financing offers. Whether you keep the device at the end of the lease is your choice, not Apple’s.
Apple gets to sell more gadgets to be used by those who can’t afford to buy them outright, especially in the face of increasing purchase prices. Apple wouldn’t be doing it if it didn’t benefit them.
For an expensive computer like a MacBook Pro, this is a longer interest free term than with the 12 month 0% financing previously and still available. Spread payments out longer, pay it off at the end. A good deal!
Whichever way you dice it, Apple products are going to get more expensive. With general increasing costs in all areas it’ll be interesting to see how this plays out for Apple.
Yes, essentially, it is an interest-free loan. Unfortunately, I suspect that many will end up on the treadmill, especially those with less wherewithal to pay up front. It would be better to set aside the equivalent monthly payment plus three to five percent for inflation into a savings account, and when you have enough, buy the phone outright and keep it for three to five years, and during that period, follow the same process.
I’ve also seen suggestions to basically calculate your lease payment as double what Apple says, pay the lease, and sock the rest away. That way when you get to the end the buyout doesn’t keep you on the treadmill.
The author does make several points. I will quote one of them. An excerpt (Apple News also is not available to me, but I am subscribed to The Atlantic):
Consider a student or a young professional, or perhaps an underemployed older one, who needs a new laptop. They decide on a MacBook. Apple Upgrade will appear to be the best deal: In its announcement, Apple offers the example of a 14-inch MacBook Pro that retails for $1,999 but that can be had for a monthly lease. Perhaps this person goes for the two-year term, which has them paying $54 a month. Best Buy, which currently has the same computer on sale for $1,849, offers an 18-month loan repayment with $103 installments. Apple’s deal appears to be cheaper: The 24-month lease adds up to $1,296; Best Buy’s 18-month loan lands at the store’s full retail price of $1,849.
Why does Best Buy’s laptop seem more expensive? It’s because the plan is actually designed for you to fully pay off the device. At the end of the 24-month MacBook Pro lease, meanwhile, the consumer will still owe $703, meaning that the actual total price of the Apple arrangement is $1,999—higher than Best Buy’s offer.
A person can choose to pay off the full amount, return the device outright, or swap for a new one. This is a lot of money, and so the likelihood is that this customer will just go ahead and do the trade-in, restarting a cycle in which they are bleeding their bank accounts to pay for a device they do not own and possibly will never own. And on it goes, in perpetuity.
There are a lot of things in life that amount to “a potential tax on people who are bad at math.”
I’m hesitant to call it a “trap” though as all of the information is available right up front, and we’re not talking about a product where there’s no reasonably-fungible alternative.
