New Apple Lease: Big Risks, Low Monthly Fees

Apple has introduced a new leasing program called Apple Upgrade, replacing its former iPhone Upgrade program. This initiative, in partnership with Klarna, allows customers to lease select iPhones and Apple Watches for 24 months, or MacBooks and iPads for 36 months, with an option to return, buy out, or upgrade the device at the end of the term. Eligibility is contingent upon a credit check, and iPhone leases require activation with AT&T, T-Mobile, or Verizon.

The program emphasizes low monthly payments, with iPhones starting at $17.99 per month. However, a significant catch is the exclusion of AppleCare+ coverage, meaning users must purchase separate protection for accidental damage, theft, or loss. Failing to do so could result in substantial fees if the device is damaged, lost, or stolen.

Furthermore, the leasing structure means users do not own the device outright at the end of the lease term without paying a significant "Purchase Option Fee." This could trap users in a continuous cycle of monthly payments if they cannot afford the final buyout, making long-term ownership more expensive than traditional financing.

Customers currently in the iPhone Upgrade Program with Citizens One will continue under their existing agreements. The new Apple Upgrade program is available for the iPhone 17 line but excludes older or budget models like the iPhone 16 and Apple Watch SE.