Apple’s Upgrade Program: The Fine Print and Potential Pitfalls
Apple's Upgrade Program offers monthly leasing of devices, but it's a loan through Klarna with risks like debt collection for missed payments and loss of resale value.
Apple has launched its Upgrade Program, allowing users to lease iPhones, iPads, Macs, and Watches with relatively low monthly payments. The company guarantees that the total paid over the lease term (one to three years) will not exceed the device’s full price, and in some cases, users may pay hundreds less.
The program works by charging a fixed monthly fee. At the end of the lease, customers have three options: purchase the device by paying the difference between what has been paid and the remaining cost; end the contract and return the device, forfeiting any potential resale or trade-in value; or immediately upgrade to a new device and start paying the new monthly fee.
The biggest catch is that this is essentially a loan provided by the buy now, pay later service Klarna. According to Klarna spokesperson Clare Nordstrom, missing three consecutive payments will result in termination of the lease agreement and a demand for the full outstanding balance. If the balance remains unpaid after the final reminder, the debt may be transferred to a collection agency, though it is unclear if this applies specifically to the Apple Upgrade program.
Apple confirmed that there will be no restrictions on device functionality due to missed payments. However, BNPL services like Klarna carry a risk of accruing debt; nearly half of Klarna users made late payments in 2025, per LendingTree. Klarna also uses customer data to sell personalized ads.
During the lease, Klarna owns the device, and the customer is responsible for any damage. A fee is charged if the device is not returned in “good condition.” Apple encourages subscribing to AppleCare, which increases monthly costs: $9.99/month for iPhones, from $5.49 for iPads, from $3.99 for Macs, and $4.99 for Watch Series 11 and newer; $19.99/month covers up to three devices.
Early termination or early upgrade incurs a fee. After the lease ends, customers have six months to decide whether to upgrade, exit, or buy the device, but must continue paying the monthly fee during that period, reducing the program’s value.
Leasing rather than buying outright means losing potential resale income. For instance, iPhones lose 35–40% of their value after two years, so a used iPhone 17 could be sold for about $520. An upgrade immediately after lease ends forfeits that cash.
Overall, the Apple Upgrade Program is an alternative for those unable to pay upfront or preferring lower monthly payments, but it comes with risks such as debt collection, fees, and lost resale value. Customers should carefully consider their ability to make timely payments and their long-term plans for the device.
