Apple's new hardware leasing program: brilliant or smokescreening raising prices?

Chew Toy McCoy

Chew Toy McCoy

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I'd argue both. With general inflation and people already being uneasy with Apple's prices before the increase I'm sure many potential future Apple product purchasers decided they are done with Apple, possibly if only because they are now priced out. But this leasing program seems like a great option. Already something similar available for iPhones but now also for iPads, Apple Watches, and Macs. The upgrade after lease term ends is great with Macs as many users drive their Macs into the dirt before upgrading because they can't stomach (or afford) to pay full price for a new Mac.

However, and this could be a big however, I haven't looked into the pricing structure yet, but it's been my experience that Apple has relative affordable pricing for base models for casual users but once you need to do things like high end video or audio the price starts getting stupid quickly. I can imagine this would continue with the lease program. $25 a month for a base model new Mac sounds like no brainer. If it starts getting to $100+ a month for something more powerful it becomes a lot less attractive as an option.
 
It looks like a great option for the now higher priced Macs and iPhones. Zero fees, zero interest. And if you choose to make the balance payment at the end of the 2-3 year term, you don’t pay a cent more than if you had paid cash on day one. Or you rollover into a new Mac without the friction of traditional trade in or private party resale, which the vast majority of normal people have zero appetite for.

Don’t really see a downside. And I plan to do it for my new Apple Watch Ultra 4 next month.
 
Herdfan said:
Many people are already paying monthly payments on iPhones and iPads through their cell providers. So why not pay Apple? Almost guarantees repeat business.
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This is essentially how I see it as well, even if you outright purchase and trade it in it's just another form of it.
 
Vincent Hannah said:
And if you choose to make the balance payment at the end of the 2-3 year term, you don’t pay a cent more than if you had paid cash on day one.
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I'm curious where those details are buried for the buy off at the end of the term. I see that you can buy the leased device in the terms listed on the purchase page for the MBP, but it seems to be very tight-lipped on the actual details of a possible buyout.

This does feel a lot like a car lease. You might wind up leaving money on the table, you might not. But much like a casino, the house will always win, even if it's in aggregate. I suspect the terms are so good in part because the remaining balance is more likely to be lower than what they can get selling the device used. And the terms will get worse if that doesn't hold a few years from now.
 
This sounds like another dirty scheme to squeeze every last cent out of the countless millions of Americans who are a paycheck away from poverty yet slaves to FOMO.
 
This looks reasonably compelling, you've got depreciation fixed up front, a reasonable upgrade timeframe (like a 36 month MBP cadence is good use vs. replacement).

Quick calculation on a MBP as I'd configure (16" M5 Pro with 48GB RAM), is (I did some rando-rounding :D ), $3834 (with tax), vs. a $75/mo (taxed), over 36 months is ~$2722, so ~30% depreciation, or, in car parlance, a projected 70% residual value.

Let's say you purchased, in 36 months, you're ready to upgrade, you've got to get at least that total lease cost in a trade at the time or a private sale. This is where the unknowns kick in: major tech improvements / price improvements, can really wreck the used market value in 36 months.

I'd figure this like a car lease as well, in that we don't lease (and you shouldn't) a vehicle with any intent on buying it, outside of the rare occasion when the market aligns just right where you could actually come out ahead (like the used car market in 20-22, where we made $14K in a week and 15 minutes online via Carvana :D )
 
thenewperson said:
Yeah, my main fear with the service was that there'd be no way to buy the device outright (especially with the hysteria at the time of announcement) but that's not the case so I'm good.
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Right, but that's not really the leasing model. In 36 months, you're buying a 36 month old device, that might have a current value that's much lower vs. the buyout. Leases are designed for pay, use, return. :)

To be clear, if it is a good deal, for whatever reason (like escalating storage component cost), then sure, I suppose, my comment is more about the mindset of entering into a lease (not unlike a vehicle).
 
DT said:
Right, but that's not really the leasing model. In 36 months, you're buying a 36 month old device, that might have a current value that's much lower vs. the buyout. Leases are designed for pay, use, return. :)
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Making up some numbers just for illustration, and assuming your goal is to own either way...

Let's start by assuming you have $1K in your bank, and would like to use it to buy a $1K computer.

Scenario 1: you pay $1K up front. You own the computer.
Scenario 2: you pay $25/month lease payments for 36 months ($900 total). At the end of the lease, you opt to pay the remaining $100 as a lump sum. You own the computer.

The objection you raise makes absolutely no sense. Either way, after 36 months, you've paid $1000 and you own the computer. However, if you leased, you got the chance to take advantage of the time value of money: at minimum, you could just move the computer money to a savings account and let the portion of it not yet paid out earn interest. You're not going to make a mint this way, but it's not nothing.

You raise the scare that you might end up buying a 36 month old device that has a current value less than the buyout price, but if that's so... just don't buy it out? In this extremely unlikely scenario, the lessor is effectively forced to pay you more than market value for a heavily depreciated computer.
 
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