At first glance, the new Apple Upgrade program seems like a no-brainer. Why pay the full $1,199 for a new iPad Pro when you could spread the cost by leasing it for 24 or 36 months with no interest or additional fees? A 24-month iPad Pro 256GB lease will run you $32 a month for a total of $768. After that, you could pay the remaining cost or swap the iPad Pro for a newer model.
In a time of ever-increasing gadget prices, including Apple’s, a new upgrade program with low monthly fees seems like a win for shoppers. But of course, as with anything involving credit, there are downsides to consider.
For one, this is a lease program, so you don’t actually own the device you’re paying for. I suppose that’s not functionally different than paying off something with credit, but it introduces new problems when the lease is over. According to Apple’s FAQ, “You must return your device in good working condition at the end of your lease term.” If you want to return or trade in your device, you may have to pay damage fees, depending on its condition. Apple says you can also pay for AppleCare protection to avoid a damage fee (unfortunately, it’s not bundled with the new upgrade program, as it was with the iPhone upgrade plan).
If you get tired of paying monthly fees, you could just buy out the rest of your lease. But if you wanted to end the lease entirely, you’ll also have to pay “substantial” fees, according to Apple. The company says upgrading early (before the 12-, 24- or 36-month period you signed up for) can also incur “substantial” fees, depending on how many months are left on your lease. If you don’t pay off the lease at the end of the term (or trade in for a new device), you’ll also automatically be moved to monthly payments for up to six months. Apple also warns “your monthly payments may increase” in those additional months.
Unlike the iPhone Upgrade program, your lease and monthly fees for the Apple Upgrade program are handled by Klarna, a “buy now, pay later” company. Apple already offers Klarna as a payment option in Apple Pay, so this isn’t exactly a new partnership. But as with anything involving credit, Klarna could be considered predatory. Its ideal customers are young people who don’t have the best credit. They’re also the most vulnerable when it comes to dealing with extra fees and defaults.
All of that being said, if you can comfortably pay the Apple Upgrade program’s monthly fees, it’s a smart way to snap up new devices. It’s easier than applying for an Apple Card, and it’s cheaper than the 0 percent APR payments that card offers for Apple hardware. And I’ll have to admit, that $32 a month iPad Pro sure sounds tempting… but I’m going to figure out my plan for the end of that lease before I sign up.
