Is the iPhone Upgrade Program worth your time, or should you finance a new iPhone in another way?

New iPhones are expensive. They might represent good value, but there’s no getting away from the hit to your bank account if you buy an iPhone outright. At the time of writing, the most affordable model from Apple’s iPhone 11 range costs $699/£729. Want a top of the line iPhone 11 Pro? That’ll be a whopping $1449/£1499, thanks.

If you’ve got that kind of money lying around, great – go for it. But many don’t, and yet hanker after the latest and greatest tech. This is why Apple offers alternate ways to fund your iPhone habit – and sometimes other Apple hardware too. You just have to know what you’re letting yourself in for when signing on the dotted line.

What’s the iPhone Upgrade Program?

Although Apple offers traditional payment plans (see later), the iPhone Upgrade Program is a more ‘Apple’ take. It essentially reframes your iPhone as a service – a kind of ongoing rental – rather than a one-off purchase. You pay a monthly fee, and after 12 months get the chance to swap your existing device for the latest model.

The iPhone Upgrade Program operates on 0% financing. This means you’re paying for the device, rather than adding to your overall costs by way of interest. However, it isn’t quite that clear cut, and there are things to be mindful of should you sign up.

What’s the catch with this program?

First, realize this is still a loan. You may not be eligible, and even if you are, you must ensure you’re able to keep up with payments for the minimum term (24 months in the USA; 20 in the UK). Secondly, the program incorporates – and mandates – AppleCare+.

Depending on your needs, AppleCare+ may or may not be beneficial. It does cover you for two incidents of accidental damage every 24 months – so drop your iPhone and it’ll be repaired for a low service fee ($29/£25 for the display; $99/£79 for other damage) – but AppleCare+ adds to your overall outlay.

Also, given the nature of the program, and the option for renewing your iPhone annually, timing is key. We’d recommend signing up immediately after a new device you’d like goes on sale. That way, by the time its successor arrives, you’ll be eligible for an upgrade – if you choose to take it, rather than having to wait several months.

What do I own with the iPhone Upgrade Program?

You need to complete loan payments on any product to own it outright. With the iPhone Upgrade Program, a perceived negative is you’re always on a payments treadmill. Each year, you’re encouraged to upgrade, kicking off a new loan cycle. You never really ‘own’ anything. And in handing back your old iPhone to Apple, you don’t have the option of selling it to claw back some money.

However, you can opt to pay off the loan in full, by not taking out a new loan (and not upgrading your device after 12 payments). This ends your participation in the iPhone Upgrade Program, but leaves you with an iPhone you fully own. If you don’t need AppleCare+, though, this isn’t worth doing for a single cycle.

What other financing options does Apple offer?

Beyond the iPhone Upgrade Program, Apple offers money for trade-ins (typically at around half the gross price you’d get on eBay, but with zero risk and no fees), and straightforward payment plans.

Plans vary by region. In the UK, for example, you take out a 24-month loan with Barclays – so similar to the iPhone Upgrade Program, but without the AppleCare+, and without the means to upgrade your iPhone after 12 months. The US store provides similar choices, but you also get the likes of AT&T’s 30-month installment plan, which has its own early upgrade option.

In some regions, Apple offers other 0% financing. At the time of writing, any UK Apple Store spend over £399 (about $515) can be paid back over 3–12 months. This – and the equivalent iPhone payment plans – are a good bet, spreading the outlay over a long period, so you’re not so stretched by your new purchase. They’re also ideal if you tend to buy an iPhone and keep it for several years. But consider the Upgrade Program if you very regularly upgrade – or are prone to dropping your phone!