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Is the Apple iPhone Upgrade Program Worth It?

It's official: Apple's iPhone 11, iPhone 11 Pro, and iPhone 11 Pro Max are its newest phones. And when they're released on September 20, many consumers might be wondering what's the best way to buy them.

Since 2015, Apple's iPhone Upgrade Program has provided an alternative option to paying a lump sum or waiting two years to get a new iPhone. The Apple service lets customers upgrade to a new iPhone each year, in return for a monthly payment and trading in their old iPhones when the 12 months are up. Apple has called it the "easiest way" to get a new smartphone.

But with the iPhone 11, iPhone 11 Pro, and iPhone 11 Pro Max releases right around the corner, we wanted to put that notion to the test. Is Apple's iPhone Upgrade Program worth it? And is its promise of helping you get a new iPhone each year really best for your wallet? And if it's not, would options from AT&T or Verizon be even better?

Read on to find out:

What is the Apple iPhone Upgrade Program?

Apple's iPhone Upgrade Program spreads the cost of a new iPhone over a 24-month period. After 12 payments are made, however, customers can trade in their iPhones and get an Apple upgrade at that device's same two-year monthly charge.

Apple's upgrade program also sweetens the pot over offerings by mobile providers, like AT&T and Verizon, by bundling its AppleCare+ warranty into the deal. Apple's warranty is not free, though it lets iPhone owners easily fix certain defects and cosmetic problems at reduced rates.

In the U.S., Apple's iPhone Upgrade Program users can get phones that run on Verizon, AT&T, Sprint, or T-Mobile networks.

How does the iPhone Upgrade Program work?

To sign up for Apple's upgrade program, shoppers need to go to the company's website or to one of its retail stores. Currently, the program is only available with the latest iPhone models. Anyone wishing to use the program trade in an older iPhone model is out of luck. (But if you time it right, you can sell your old iPhone and get good value in return, which you can put towards buying a new iPhone.)

Once customers choose which new iPhone they want with Apple's upgrade service, they then need to choose the carrier network they want to use.

Financially speaking, the iPhone Upgrade Program is a loan, which means Apple has partnered with Citizens Bank to front the money for the purchase. After customers input their Social Security numbers and dates of birth into Apple's system, Citizens performs a credit check.

If all goes well on the credit check, customers are approved and they'll get their iPhones.

Now, all they'll need to do is make payments.

Those payments are based on which model of iPhone (and how much onboard storage) customers choose.

Here's a breakdown of iPhone Upgrade Program prices for the iPhone 11, iPhone 11 Pro, and iPhone 11 Pro Max:

  • iPhone 11 Pro Max 64GB: $54.08 per month
  • iPhone 11 Pro Max 256GB: $60.33 per month
  • iPhone 11 Pro Max 512GB: $68.66 per month
  • iPhone 11 Pro 64GB: $49.91 per month
  • iPhone 11 Pro 256GB: $56.16 per month
  • iPhone 11 Pro 512GB: $64.50 per month
  • iPhone 11 64GB: $35.33 per month
  • iPhone 11 128GB: $37.41 per month
  • iPhone 11 256GB: $41.58 per month

Does the iPhone Upgrade Program make sense, financially?

The big question that shoppers want to know is: Will the iPhone Upgrade Program actually save you money? The answer is, not really.

The program's monthly payments include the full price of the iPhone that the customer is buying. For instance, to pay off the 64GB iPhone 11 Pro in full, customers would pay $1,197.84 over a two-year period. That covers the $999 customers would pay for the device, as well as the $199 charge for signing up to AppleCare+. Compared to paying for the iPhone 11 Pro and AppleCare+ in full, the iPhone Upgrade Program saves folks just 16 cents.

People who don't typically protect their iPhones with AppleCare+ warranties would even find the iPhone Upgrade Program more expensive.

But if you're clumsy, you might find the iPhone Upgrade Program to be a good deal, since AppleCare+ provides coverage for accidental damage and charges just $29 for a screen repair.

What are the alternatives to Apple's iPhone Upgrade Program?

There are plenty of ways to pay for an iPhone over time, and most of those options are offered by mobile carriers. These are the carrier-supplied deals that are among the most popular for iPhone users:

AT&T Next Up: Like Apple's iPhone Upgrade Program, AT&T's upgrade program Next Up requires customers make 50% of the payments on their 24-month installment plan, and then trade in their phones at the end of the 12-month period. But AT&T's program, which doesn't include AppleCare+, has a $5-per-month surcharge.

Sprint Early Upgrade: Sprint lets shoppers upgrade to a new iPhone after 12 payments, only if they've opted to join its Early Upgrade service within 30 days of the device's activation. Sprint's program, which doesn't include warranty service on a broken iPhone, also carries a $5-per-month surcharge.

T-Mobile Jump: After T-Mobile customers make 12 months worth of payments on a 24-month installment, they can upgrade to a new iPhone with T-Mobile Jump. Unlike its competitors, T-Mobile also provides damage coverage on the iPhone included in the device's monthly installment fee. The carrier also requires customers return their devices in good working condition after the 12-month period.

Verizon Annual iPhone Upgrade Program: Verizon's upgrade option also requires customers make 50%, or 12 months worth of payments, on a 24-month installment plan before they get a new iPhone. The program also requires that customers upgrading to a new iPhone trade in their existing phone within 30 days of the purchase of a new device. AppleCare+ also is not included in the offer.

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