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Comment by r0fl | Hacker News Reader

Leasing isn’t “I can’t afford to buy it.” It’s about capital allocation.

Why would I tie up $1,200 upfront in a device that’s going to be obsolete in a couple of years when I can spread the cost over time, preserve cash flow, and (if it’s a legitimate business expense) deduct the lease payments?

Keeping $1,200 in my business earning a return is often worth more than prepaying for a depreciating asset.

People happily lease $80,000 vehicles for exactly these reasons. Applying the same logic to a $1,200 phone isn’t irrational, just the same financing decision at a much smaller scale.

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Yeah everyone's naysaying this but it seems like a no brainer?

There's no interest, no fees. The total lease price (if you buy out at the end) is the same as the retail price. There's no downside to it at all.

If you are someone who upgrades annually, you're now paying ~$599 split over 12 payments vs. ~$1199 up front and either trading in or trying to sell your last gen privately. It works out to about even on a trade-in->upgrade every year cycle, only you don't have to fork over the $600 up front.

When you return the device, it needs to be in mint condition. You now have a credit obligation with Klarna, whereas on the pervious system, there was also 0% financing but it was bundled AppleCare+.

I don't think anyone will ever excercise the buyout option since the phone will never be worth more than the buyout price. And like you're saying, this program does not make sense unless you are upgrading every single year.

I mean in any case, every option looks defensible once you've accepted the premise that you need a new phone every 12 months. Any minute differences in costs are just rounding errors. Like I really don't think someone upgrading every year is going to have a significantly different retirement income because they saved $1200 every year by not buying the iphone outright. It's really just a convenience thing, not a financial decision.

the other problem is if it’s stolen or damaged.

they literally say you will pay large fees in those cases. it’s basically self insuring.

> People happily lease $80,000 vehicles for exactly these reasons.

Well, kinda. Various vehicles have fleet-only trim levels that are the cheapest models available. The reasons that you'd lease a $80k Ford F-150 Raptor are somewhat different than the reasons that you'd lease a $39k F-150 XL.

For that matter, why would you pay $1200 for a phone?

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