Apple has introduced the Apple Upgrade program, a leasing option for devices like iPhones, iPads, Macs, and Apple Watches. While this initiative offers lower monthly payments, it may lead consumers into a continuous leasing cycle without eventual ownership.
Under this program, customers can lease devices for terms of 12, 24, or 36 months, depending on the product. For instance, a MacBook Pro with 16GB memory and 1TB storage is available for $38.99 per month over 36 months. However, at the end of the lease, to own the device outright, a balloon payment is required to cover the difference between the total lease payments made and the device’s original retail price.
For the aforementioned MacBook Pro:
- 36-month lease: Total payments amount to $1,403, with a balloon payment of $585 needed to own the device.
- 24-month lease: Total payments amount to $1,295, with a balloon payment of $703 required for ownership.
Without setting aside funds for this final payment, consumers might find themselves unable to afford the balloon payment, leading them to return the device and potentially enter a new lease, perpetuating the cycle.
To avoid this, consumers can adopt a proactive approach:
- Alongside the monthly lease payment, deposit an additional amount into a savings account to accumulate the necessary funds for the balloon payment by the end of the lease term.
- For example, with the 36-month MacBook Pro lease, saving an extra $16.26 monthly would cover the $585 balloon payment, resulting in total monthly outlays of $55.25.
This strategy ensures that consumers can own their devices at the end of the lease term without financial strain. Additionally, owning the device provides the flexibility to sell it privately, potentially covering the cost of a new lease or purchase.
While the Apple Upgrade program offers an accessible way to acquire Apple products, it’s crucial for consumers to plan financially to avoid being ensnared in an endless leasing loop. By proactively saving for the balloon payment, users can enjoy the benefits of the program without compromising eventual ownership.
