Apple has ended its long-running iPhone Upgrade Program in the United States and replaced it with a new leasing service that lets customers use an iPhone for as little as $17.99 per month.
The new service is called Apple Upgrade and is provided through Klarna. It covers selected iPhone, Apple Watch, iPad and Mac models, but the most important change is easy to miss beneath the low monthly price. Customers are leasing the device rather than paying it off through a traditional installment loan, which means they will not own it at the end unless they make an additional purchase payment.
CNBC reported the change as Apple moving into iPhone leasing, and that is the clearest way to describe it. Apple Upgrade works more like a car lease than the previous program that many regular iPhone buyers already knew.
How the new Apple Upgrade program works?
Apple Upgrade became available across the United States on July 28 through the Apple website, the Apple Store app and physical Apple Store locations. Eligible customers can choose a device, select a lease term and apply for approval from Klarna during checkout.
iPhones and Apple Watches can be leased for 12 or 24 months. Macs and iPads come with 24-month or 36-month options. Apple says monthly prices begin at:
- $17.99 for an iPhone
- $11.99 for an Apple Watch
- $24.99 for a Mac
- $11.99 for an iPad
Those are starting prices, not standard payments for every model. The amount depends on the device, storage capacity and length of the lease.
Apple’s own example shows an iPhone 17 Pro with 256GB of storage, priced at $1,099 before taxes, costing $45.99 per month on a 12-month lease or $31.99 per month over 24 months. The 12-month option produces $551.88 in lease payments, and the 24-month option produces $767.76. Neither amount gives the customer ownership of the phone by itself.
The official Apple Upgrade announcement makes that distinction clear. At the end of the agreed term, customers must choose what happens next.
What happens when the lease ends?
Customers have three main options when the Apple Upgrade lease reaches its end:
- Return the current device and apply for a new lease on a newer model.
- Pay a one-time purchase fee and keep the current device.
- Return the device and leave the program.
An upgrade is not automatic. The customer must enter a new agreement, return the old device and qualify again through Klarna. The payment on the replacement product may also be higher.
Anyone who reaches the end of the lease and does nothing could be moved to a month-to-month agreement for up to six months. Apple warns that monthly payments may increase during that extension. If the customer still takes no action, Klarna can charge the purchase fee listed in the agreement.
I would read the full lease before accepting the monthly price shown at checkout. The important numbers are not only the first payment and the advertised rate. Customers also need to know the final purchase fee, early cancellation charge and possible cost of returning a damaged device.
AppleCare is no longer included
The previous iPhone Upgrade Program included AppleCare+ as part of the monthly payment. Apple Upgrade does not include insurance or accidental-damage protection in its basic lease price.
Customers can add an AppleCare subscription separately. That added cost matters because a leased phone must eventually be returned in the condition required by the agreement. Apple states that customers may face damage fees if a device is lost, stolen or returned in unacceptable condition.
People comparing the new monthly price with what they paid under the old program should therefore include AppleCare in the calculation. A lower lease payment can look less dramatic once optional protection is added.
Apple Upgrade compared with the old iPhone Upgrade Program
| Detail | Old iPhone Upgrade Program | New Apple Upgrade |
|---|---|---|
| Type of agreement | 24-month installment loan | Consumer lease through Klarna |
| Device ownership | Phone was paid off through installments | Customer must pay a purchase fee to keep it |
| Upgrade timing | Generally after 12 payments | At the end of the lease or earlier for a possible fee |
| AppleCare+ | Included | Optional and charged separately |
| Available products | iPhone only | Selected iPhones, Watches, iPads and Macs |
| Finance provider | Citizens Bank | Klarna |
| Lease or payment terms | 24 months | 12 to 36 months, depending on device |
Apple has also discontinued iPhone Payments in the United States. Existing members of the old iPhone Upgrade Program are not being forced into a Klarna lease immediately. Once eligible for their next device, they can choose Apple Upgrade, Apple Card Monthly Installments, carrier financing or an outright purchase.
Carrier restrictions still apply to leased iPhones
Customers leasing an iPhone must activate it through AT&T, T-Mobile or Verizon. Prepaid carrier plans are not accepted as the selected service during enrollment.
The leased iPhone remains unlocked, according to Apple, so the customer can later change among supported carriers subject to the carrier’s own conditions. The initial carrier requirement still limits the program for people who use prepaid service or smaller mobile providers.
Readers comparing the current lineup can see our previous report on the iPhone 17 models and their main differences. Not every Apple product is eligible for the lease. Apple excludes the iPhone 16, iPhone 16 Plus, Apple Watch SE, MacBook Neo, Mac mini, iPad with the A16 chip and Studio Display.
Who can apply?
Apple Upgrade is available to adult residents of the United States, excluding U.S. territories. Applicants need a Social Security number or individual taxpayer identification number, a valid Apple Account, a Klarna account, an accepted payment card and a mobile number capable of receiving security codes.
Klarna conducts a soft credit inquiry when a customer applies. Apple says that initial check does not affect the applicant’s credit score, although approval still depends on eligibility and creditworthiness.
No security deposit is required. The first monthly payment is generally due about 30 days after the device ships or becomes available for collection.
Trade-ins can reduce the monthly payment
Customers joining Apple Upgrade can trade in a device to reduce the amount charged each month. The value depends on the model and condition of the product being surrendered.
The trade-in is applied when a person first enters the program, so buyers should compare the reduced lease payment with the amount they might receive by selling the old phone privately. Convenience has value, but Apple’s trade-in offer is not always the highest possible resale price.
Lease payments made with Apple Card can earn 3 percent Daily Cash. That does not make the lease interest-free ownership because the customer is still paying to use an Apple-owned product until completing a buyout.
Early cancellation can be expensive
Apple warns that customers may face substantial charges for ending the lease before the original term expires. The exact amount should appear in the Klarna agreement shown before enrollment.
Leaving the program early is therefore not as simple as handing the phone back and stopping the monthly payments. A person who chooses a 24-month lease should be prepared to keep paying for that period unless the contract provides an acceptable early-exit option.
The same concern applies to frequent upgraders. Apple says some devices can be upgraded early for a fee, but the opportunity depends on eligibility, approval and the condition of the returned product.
Who could benefit from leasing an iPhone?
Apple Upgrade makes the most sense for customers who regularly replace their devices and do not place much value on owning or reselling them. The lower monthly payment can also help someone who wants a current iPhone without paying the full retail price at the start.
The deal is less attractive for people who normally keep a phone for four or five years. Buying and keeping the same device after it has been paid off usually provides years without a hardware payment, something a repeating lease never offers.
People already waiting for Apple’s next release may find the program more appealing because it creates a planned return and upgrade cycle. Our latest look at the reported iPhone 18 Pro changes explains what may be coming next, although Apple has not officially confirmed that model.
Final Thoughts
The customer may pay less each month than under a purchase plan, but must eventually return the device, lease another one or pay the remaining purchase fee. AppleCare costs extra, damaged returns can generate fees and early termination may be expensive.
Apple Upgrade is not automatically a poor deal.
It is a different deal, aimed at people who prefer predictable monthly access to new hardware over long-term ownership. Before signing, I would compare the full lease cost with Apple Card Monthly Installments, carrier promotions and the price of buying the phone outright. The smallest monthly number does not always represent the cheapest choice.
