Compared: iPhone Upgrade Program vs. carrier installment plans

AppleInsider

There are a few ways to buy an iPhone beyond paying full retail up-front. Here's how Apple's iPhone Upgrade Program compares to carrier programs.

The iPhone 14 product line

The iPhone Upgrade Program lets customers receive a new iPhone every year after they've made at least 12 payments. The payment plan includes AppleCare+ insurance by default, and customers can opt to choose AppleCare+ with Theft and Loss for an additional price.

The monthly amounts depend on the iPhone model. For example, the iPhone 14 with 128GB of storage is $39.50 per month in the program. The cost is spread out over 24 months or 12 months if the customer upgrades.

iPhone 14 128GB prices before and after insurance. Apple (24 months), AT&T (36 months), T-Mobile (24 months), Verizon (36 months).

A drawback of the program for some customers is sending the iPhone back to Apple instead of recouping some of the cost by selling the old model. On the other hand, a benefit of the program is that the iPhone isn't tied to a multi-year service contract.

The program works with AT&T, T-Mobile, and Verizon. Apple connects the new iPhone to the carrier, so customers don't have to do anything.

Carrier pricing for iPhone 14

Each carrier offers its version of the iPhone Upgrade Program by spreading payments, typically to 24 months, but some carriers spread the cost out further. These prices are for the iPhone 14 128GB model as an example.

• AT&T: $22.23/mo for 36 months


• AT&T Next Up: $28.23/mo for 36 months


• T-Mobile: $33.34/mo for 24 months


• Verizon: $22.22/mo for 36 months

AT&T says that customers must sign up for a 36-month installment plan to qualify for the iPhone 14 promotion. Existing customers may find other installment options in their account. AT&T has a support page with more information.

T-Mobile payment plan

T-Mobile has an old installment plan called Forever Upgrade for currently-enrolled customers. Unfortunately, it's no longer available for new enrollments.

Customers have to wait 24 months to upgrade to keep the locked-in trade-in value of their iPhones. They can upgrade to an eligible iPhone before then and lose the locked-in value.

T-Mobile iPhone 14 Pro

Customers can lose Forever Upgrade benefits if they switch to an ineligible plan, trade in the iPhone for a non-eligible device, or trade in their device for an iPhone through a non-eligible channel, such as leasing.

Currently, T-Mobile offers upgrade options through its Magenta MAX plan. For example, customers can have 24 monthly bill credits for an iPhone 14 Pro by trading in an eligible device or switching to Magenta MAX.

Depending on the trade-in device, the carrier offers various amounts of money off a new purchase. For example, it provides up to $1,000 off by trading in an iPhone 11 Pro, iPhone 11 Pro Max, iPhone 12 Pro, iPhone 12 Pro Max, iPhone 13 Pro, or iPhone 13 Pro Max.

The lowest offer at up to $400 happens when a customer trades in an iPhone 7, iPhone 7 Plus, iPhone 8, iPhone 8 Plus, or iPhone SE second generation.

Without Magenta MAX, T-Mobile offers up to $500 off via 24 monthly bill credits when customers trade in an eligible device.

There is also a buy-one-get-one $700 off an iPhone 14 or iPhone 13 series device to get up to $700 off a second via 24 monthly bill credits when customers activate two or more new lines or add a line for existing customers.

The downside to T-Mobile is iPhone 14 preorders that happened on September 9. The carrier had technical difficulties due to high demand, and many customers could not preorder.

AT&T payment plan

AT&T offers the 128GB iPhone 14 for $22.23 per month and has an early upgrade plan called AT&T Next Up. Enrollment costs $6.00 per month, and customers get monthly bill credits toward the device with an eligible trade-in.

AT&T iPhone 14 Pro

If customers are trading in for an AT&T device offer, credits typically start in 2-3 bill cycles once the old device has been received and verified by the carrier. For trade-ins without an offer, customers receive an AT&T promotional card for the value of their device.

Like T-Mobile, AT&T offers various amounts of money depending on trade-in value. For example, trading a 256GB iPhone 13 Pro for a 128GB iPhone 14 has an estimated value of $1,000.

This is better than Apple's offering of $600 for the iPhone 13 Pro trade-in for the same model of the iPhone 14.

Verizon payment plan

Verizon offers the 128GB iPhone 14 for $22.22 per month over 36 months. It provides up to $800 off when customers trade in an eligible device with specific Unlimited plans.

Verizon iPhone 14 Pro

For example, trading in an iPhone 13 Pro gives customers up to $800 for new lines or $800 for an upgrade. New customers can receive a $200 Verizon gift card when they switch to the carrier.

Add a smartphone with a retail value of over $699.99 with monthly device payments to the cart, then activate a new smartphone line of service with select Verizon Unlimited plans. Customers will get a $200 Verizon gift card per switched line.

Verizon has a one-time fee of $35 for activating a new service device on its network.

iPhone insurance

The iPhone Upgrade Plan includes AppleCare+ coverage into monthly payments, so Apple is the exception under the "Before Insurance" chart. The monthly price will increase if a customer chooses to add AppleCare+ with Theft and Loss instead, from $4.16 more per month.

Verizon has an insurance program called Verizon Mobile Protect. Monthly charges depend on the type of device.

Logo for AppleCare+

For example, an insured 128GB iPhone 14 costs $17 per month for a single device, with a $229 deductible.

T-Mobile has a protection plan called Protection 360. It costs $7.00 per month for a single device under Tier 1. Costs may change depending on the tier or level of accidental damage.

AT&T device protection is $14 or $17.00 per month per mobile number enrolled, depending on the device model. It offers various claims for loss, theft, and physical damage.

Read on AppleInsider

sdw2001

I’ve been with AT&T for a few years now. The insurance is not worth it. They want $200 a year plus the deductible if anything happens.  

d-rey

It’s not clear to me when one can get a new phone in the carrier plans.  With the Apple Upgrade program, you can get the new phone after 12 payments with only the sales tax & possible carrier upgrade charge (AT&T is $35) due additionally.   So you basically get a new phone after paying for half of your current one.  Do the carriers make you wait for the full payment terms so you can only upgrade every 2 or 3 years?  Before the Apple Upgrade program, I was on AT&T’s, and I could only upgrade every two years.  Has that changed?

omasou

The upgrade plans aren't worth the time or trouble. Especially, carrier plans that extend the period to 36 mo.

I gave up on eBay b/c of the scammers and Trade In companies that try to lower the value of the phone after they receive it. Either way too much hassle.

What I do...

I have an iPhone 13 Pro that I purchased last year from Apple on their 24 mo 0% payment plan. The remaining balance that I paid off was $424.

$   999 iPhone 14 Pro
$  -600 iPhone 13 Pro Apple Trade In value
$   399 net cost plan to pay in full

$ 399 + tax = $424

So for a $ 424 each year I have a new top of the line phone, no monthly commitment and less hassle in my life. The same can be accomplished using a monthly plan but is more complicated b/c you need to pay off the previous iPhone.

Either way a new phone works out to
~ 1/3 MSRP when kept for 1 year
~ 2/3 MSRP when kept for 2 years

By upgrading every year, I have the latest iPhone and the freshest battery.

Purchase AppleCare or not, but NOT a requirement. Cost is similar or less than carriers and I would rather deal w/Apple than a carrier. https://www.apple.com/support/products/iphone/

edited September 2022

omasou

d-rey said:

It’s not clear to me when one can get a new phone in the carrier plans.  With the Apple Upgrade program, you can get the new phone after 12 payments with only the sales tax & possible carrier upgrade charge (AT&T is $35) due additionally.   So you basically get a new phone after paying for half of your current one.  Do the carriers make you wait for the full payment terms so you can only upgrade every 2 or 3 years?  Before the Apple Upgrade program, I was on AT&T’s, and I could only upgrade every two years.  Has that changed?

The previous contracted phone needs to be paid off.

If an iPhone 14 Pro is purchased the monthly cost is $27.75. As long as the promotion is active, e.g. iPhone is not paid off. AT&T will reimburse the owner $27.75 every month.

To trade the iPhone 14 Pro these are the ~ costs (using this year's numbers) + the cost of the new iPhone 15 Pro, etc. As you can see, b/c the carrier plan has a 36 mo. term it keeps the value (trade in value)  of the phone underwater making the owner "think" it will cost them more to exit the plan. If you use Apple's payment plan w/a 24 mo term the phone trade-in value is always positive.

$ 333 paid, $ 666 payoff, $ 600 trade in value - after 12 months
$ 666 paid, $ 333 payoff, $ 430 trade in value - after 24 months
$ 999 paid, $     0 payoff, $ 300 trade in value - after 36 months

The only thing the Apple upgrade plan or AT&T Next plan accomplish is user lock-in and limit choices and true easy of upgrade though they sell you the easy of upgrade.

edited September 2022

chadbag

Technically non of the carrier's require a "service contract." This is not going back to the old days of contracts for service with special pricing for those under contract.  

What these are is special financing contracts.  You're paying the full device price -- not a special contract price.  With financing provided by the carrier.   Usually 0% interest with even payments. 

 The incentives are not usually based on financing and you can get the incentive and pay cash for the phone up front.  

You are still month to month on the service, but the financing is dependent on having service.  If you decide to quit the service befoee the financing contract is fulfilled you can.  They'll just "call the loan" and make the outstanding balance due up front.  This is mainly due to the risk to them going up if you quit service. 

edited September 2022

omasou

chadbag said:

Technically non of the carrier's require a "service contract." This is not going back to the old days of contracts for service with special pricing for those under contract.  

What these are is special financing contracts.  You're paying the full device price -- not a special contract price.  With financing provided by the carrier.   Usually 0% interest with even payments. 

 The incentives are not usually based on financing and you can get the incentive and pay cash for the phone up front.  

You are still month to month on the service, but the financing is dependent on having service.  If you decide to quit the service befoee the financing contract is fulfilled you can.  They'll just "call the loan" and make the outstanding balance due up front.  This is mainly due to the risk to them going up if you quit service. 

Correct.

They are not a "service contract" in that the owner MUST keep service. Though to receive the full "benefit", e.g. paying the cost of the phone, the owner MUST keep service or loose reimbursement and pay off the phone.

ALL options work out where so that the owner absorbs is higher cost if they trade up before the term ends.

Only good for folks that don't upgrade often.

edited September 2022

melgross

I’m not sure if any of these plans are with bothering with. I’m not interested in whether I can save $50 more or less with one plan or the other. Considering the total cost, that’s inconsequential. So this year my wife and I both decided to get new models, after just one year, which we don’t normally do. Hers was an iPhone Pro Max 256GB storage. It was $1195. But the trade in given is $720. That’s comes to $475. Add $9.95 a month for AppleCare+ and the total is $594.4. I don’t think that’s bad at all. Mine has 512Gb. So it’s a bit more.

it’s just too easy to have Apple send the phones, which are coming tomorrow, receive the box for the old one and either send the old phone back, or bring it to a store.

I guess if you care about every dollar, this might not be the best option, but it’s a pretty good on.

charlesn

Thank you for this, Andrew--it's a very useful article and, as a member of Apple's iPhone Upgrade program from the start, I've always wondered if Verizon--my preferred carrier--might offer a better deal. Since my iPhone is "the computer I use most often," I look forward to trading in for a new phone each year, and Apple's program still looks like the best choice for the annual upgrader like myself. 

itguyinsd

omasou said:

The upgrade plans aren't worth the time or trouble. Especially, carrier plans that extend the period to 36 mo.

I gave up on eBay b/c of the scammers and Trade In companies that try to lower the value of the phone after they receive it. Either way too much hassle.

What I do...

I have an iPhone 13 Pro that I purchased last year from Apple on their 24 mo 0% payment plan. The remaining balance that I paid off was $424.

$   999 iPhone 14 Pro
$  -600 iPhone 13 Pro Apple Trade In value
$   399 net cost plan to pay in full

$ 399 + tax = $424

So for a $ 424 each year I have a new top of the line phone, no monthly commitment and less hassle in my life. The same can be accomplished using a monthly plan but is more complicated b/c you need to pay off the previous iPhone.

Either way a new phone works out to
~ 1/3 MSRP when kept for 1 year
~ 2/3 MSRP when kept for 2 years

By upgrading every year, I have the latest iPhone and the freshest battery.

Purchase AppleCare or not, but NOT a requirement. Cost is similar or less than carriers and I would rather deal w/Apple than a carrier. https://www.apple.com/support/products/iphone/

Not sure if I understand correctly or not, but in order to trade in your 13 Pro, you had to pay the balance of $424.  Now you own the phone (which you actually paid $848 out of pocket).  You get $600 trade in (at Apple?) and they give you $600 all up front at the time you pay for your 14 Pro?  So the remaining $424 (balance on the 14 Pro) -- you pay that upfront or over time?

Still seems like it costs you more than $424 each year. 

itguyinsd

melgross said:

I’m not sure if any of these plans are with bothering with. I’m not interested in whether I can save $50 more or less with one plan or the other. Considering the total cost, that’s inconsequential. So this year my wife and I both decided to get new models, after just one year, which we don’t normally do. Hers was an iPhone Pro Max 256GB storage. It was $1195. But the trade in given is $720. That’s comes to $475. Add $9.95 a month for AppleCare+ and the total is $594.4. I don’t think that’s bad at all. Mine has 512Gb. So it’s a bit more.

it’s just too easy to have Apple send the phones, which are coming tomorrow, receive the box for the old one and either send the old phone back, or bring it to a store.

I guess if you care about every dollar, this might not be the best option, but it’s a pretty good on.

It's not about caring about every dollar, as you say.  Many people don't have $1800 to spend every two years for a phone.  That's an average $900 per year to get a new phone whether you need one or not.  I'm keeping my 13 Pro max for 30 months and only paying $300 (spread out over 30 months) after trade in.  So far, Apple hasn't tempted me with anything I can't live without. 

anilu_777

In Canada we only have carrier upgrade plans and you have to choose a new plan each time, thus spending more money. We don’t have Apple’s iPhone Upgrade program sadly or I’d get that. There’s just trade-in. 

omasou

ITGUYINSD said:

omasou said:

The upgrade plans aren't worth the time or trouble. Especially, carrier plans that extend the period to 36 mo.

I gave up on eBay b/c of the scammers and Trade In companies that try to lower the value of the phone after they receive it. Either way too much hassle.

What I do...

I have an iPhone 13 Pro that I purchased last year from Apple on their 24 mo 0% payment plan. The remaining balance that I paid off was $424.

$   999 iPhone 14 Pro
$  -600 iPhone 13 Pro Apple Trade In value
$   399 net cost plan to pay in full

$ 399 + tax = $424

So for a $ 424 each year I have a new top of the line phone, no monthly commitment and less hassle in my life. The same can be accomplished using a monthly plan but is more complicated b/c you need to pay off the previous iPhone.

Either way a new phone works out to
~ 1/3 MSRP when kept for 1 year
~ 2/3 MSRP when kept for 2 years

By upgrading every year, I have the latest iPhone and the freshest battery.

Purchase AppleCare or not, but NOT a requirement. Cost is similar or less than carriers and I would rather deal w/Apple than a carrier. https://www.apple.com/support/products/iphone/

Not sure if I understand correctly or not, but in order to trade in your 13 Pro, you had to pay the balance of $424.  Now you own the phone (which you actually paid $848 out of pocket).  You get $600 trade in (at Apple?) and they give you $600 all up front at the time you pay for your 14 Pro?  So the remaining $424 (balance on the 14 Pro) -- you pay that upfront or over time?

Still seems like it costs you more than $424 each year. 

Basically, the first year you have to buy a phone outright, e..g $999 + tax. The earlier you trade in (yes, Apple) the more you will offset the future phone. The longer you hold the phone the less offset until you are back to buying a phone outright again.

The formula for purchasing a new iPhone ever year = MSRP + Tax on MSRP - Discount - Trade In + Previous phone balance, which in my case will be $0 going forward.

So yes, I had to pay $848 to break out of the finance cycle this year. Actually, $424 + $399 + $54 (tax on $999). This year was different b/c I typically buy a new phone, give my phone to my son and trade in his phone (my 2 year old phone), which is where the $424 came from b/c I didn't keep the phone for an additional year and pay it off.

Keeping a phone longer and trading later doesn't truly save money, in the end you pay/rent/lease the phone for ~$333/year or 1/3 per year of the original MSRP.

2022 $999                                    - iPhone 14 Pro
2023 $399  ($999-$600 trade-in) - iPhone 15 Pro
2024 $569  ($999-$430 trade-in) - iPhone 16 Pro
2025 $699  ($999-$300 trade-in) - iPhone 17 Pro
etc.

If you are a veteran or work for a large corporation you can typically save 10% off MSRP but then you are not able to take advantage of Apple's 24 mo. finance plan, instead you must pay cash or use a carrier plan to finance it.

BTW, assuming you need the 512 model to keep whatever it is you hoard on the phone but for me I buy the smallest model and keep everything else in iCloud. The last 3 years I bought the 256 model but after the reviewing my usage this year and last, I know I can use the 128 with ~50 free. Anything, I need not on the phone is in iCloud and accessible.

Lastly, the Apple trade in values are the same regardless of storage size, so there’s no ROI on larger phones come trade in time.

edited September 2022

isrs

ITGUYINSD said:

omasou said:

The upgrade plans aren't worth the time or trouble. Especially, carrier plans that extend the period to 36 mo.

I gave up on eBay b/c of the scammers and Trade In companies that try to lower the value of the phone after they receive it. Either way too much hassle.

What I do...

I have an iPhone 13 Pro that I purchased last year from Apple on their 24 mo 0% payment plan. The remaining balance that I paid off was $424.

$   999 iPhone 14 Pro
$  -600 iPhone 13 Pro Apple Trade In value
$   399 net cost plan to pay in full

$ 399 + tax = $424

So for a $ 424 each year I have a new top of the line phone, no monthly commitment and less hassle in my life. The same can be accomplished using a monthly plan but is more complicated b/c you need to pay off the previous iPhone.

Either way a new phone works out to
~ 1/3 MSRP when kept for 1 year
~ 2/3 MSRP when kept for 2 years

By upgrading every year, I have the latest iPhone and the freshest battery.

Purchase AppleCare or not, but NOT a requirement. Cost is similar or less than carriers and I would rather deal w/Apple than a carrier. https://www.apple.com/support/products/iphone/

Not sure if I understand correctly or not, but in order to trade in your 13 Pro, you had to pay the balance of $424.  Now you own the phone (which you actually paid $848 out of pocket).  You get $600 trade in (at Apple?) and they give you $600 all up front at the time you pay for your 14 Pro?  So the remaining $424 (balance on the 14 Pro) -- you pay that upfront or over time?

Still seems like it costs you more than $424 each year. 

That’s the way I look at it, too. At some point you had to have that first phone paid off.

So, let’s assume the 13 Pro base was the first phone. 

$   999 iPhone 13 Pro (you have to pay all this to trade it in)
$  -600 iPhone 13 Pro trade in value
$   999 iPhone 14 Pro

still $1,400 paid over two years

but @omasou is right. Once you have that first phone paid off, each year they pay about $400+tax for a new phone.