Apple Leasing Program | Hacker News Reader

Apple Leasing Program

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12 pointsMehrdadKhnzd13 comments

I think Apple already makes it pretty easy to trade in an old iPhone when you buy a new phone. And they already offer financing with 0% APR. That seems like a better path to me, with greater optionality if you decide to hold onto the phone for an additional year or two after it is paid off - which I generally do since smartphone tech has matured to the point where there isn't much benefit to upgrading every one or two years.

Although this lease offer does offer lower monthly payments than financing (as you would expect with a lease, since you're only renting rather than buying a phone) if that's more important to you than total cost of ownership. And may be available to customers who wouldn't otherwise qualify for Apple's financing (which requires an Apple credit card, or a carrier agreement). It's also a 0 money factor - the cost to buy out the phone at lease-end is just the purchase price minus the sum of lease payments made - which is pretty generous.

I have no issues with leasing in theory, as long as the customer understands the trade offs. But in practice I think it often results in consumers buying more than they afford, and costing themselves money in the long run.

Buy an ad, Tim.

Why are people so obsessed with this, it is a no risk 0 percent interest loan. Lots of parities do this, cars, expensive furniture, etc.

Perhaps because ownership is becoming increasingly out of reach for portions of the population.

This is effectively a discount, what’s the problem?

Like any lease, it's only a discount if the actual residual value at the end is lower than the agreed residual value at the beginning, something that the leasing company will try hard to make sure isn't the case. In the case here of the iPhone 17 pro, you're leasing it for $768 rather than buying it for $1099. So if the market value of the phone after 24 months is more than $331, it's not a discount. All it does is lower monthly expense, not reduce the effective price of the phone. And unlike most closed end leases, it doesn't seem like you have to option to buy it out, so you can't even partially recover from an unexpectedly high residual value at the end.

You can buy the phone for the difference in price, so effectively just zero percent loan.

> And unlike most closed end leases, it doesn't seem like you have to option to buy it out

Reading through the end-of-lease options, this actually seems like a very buyer-friendly leasing program. There is no additional charge for leasing - the cost to buy out the phone at any point is always just the original purchase price minus any lease payments you've already made. And you don't even have to do anything at the end of the lease, they'll just keep charging you normal monthly payments for up to 6 months after the lease ends (after which point they'll just charge you the remainder of the purchase price less any payments you've made).

> At the end of your initial lease term, you can do one of the following:

> Upgrade and return your current device.

> Leave the program and return your current device.

> Buy the device outright with a one-time payment from your Klarna account.

> If you don’t take any of these actions, your lease will be extended month-to-month for up to six months from the end of your initial lease term to decide which option is right for you. During this time, you’ll be charged your monthly payment until you take action. If a trade-in credit was applied to your lease at the time of enrollment, your payments will also increase during this six-month period because the credit is applied only to your initial lease term. If no action is taken at the end of the six-month period, Klarna will charge you the purchase option fee under your lease to buy the device outright, which equals the full price of the device at lease signing less the sum of lease payments you've already made (plus tax).

In the short term at a micro level, not a problem at all for people who can afford the device and probably a better deal.

At a macro level, yet another category where prices will continue to increase and buyer reaction will be subdued by lower installments and longer terms. Like 50 year mortgages and 7 year car loans.

But of course, this is the point. Phones are a durable good at this point. The focus on services and more financing options are the next levers without innovation.

But this doesn't put it out of reach. You can still own it.

They’re only doing this so people can afford Mac Studio/Pro with tons of RAM.

I'd drop the "tons of RAM" part.

Scheduled return, 3-year-old Mac second sale refurbished revenue, zero new DRAM

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