Is Apple's Upgrade Program a Good Deal for the iPhone 12?

Should you buy a new iPhone 12 directly from Apple, directly from your carrier, or sign up for Apple’s iPhone upgrade program? It depends. There are advantages and disadvantages to the iPhone upgrade program, and it’s worth knowing what they are before you make your next iPhone purchase.

While we are generally fans of buying a device that you fully own so you can then sell it at your leisure whenever you want to get something new (or just something else), that’s not to say that the iPhone upgrade program is bad. As you might expect, if you’re heavily invested into Apple’s ecosystem, it’s actually a decent option that could save you some cash and stress.

Crunching the numbers on Apple’s iPhone Upgrade Program

Consider the iPhone 12 and iPhone 12 Pro. If you sign up for Apple’s iPhone Upgrade Program, this is how much you’ll be paying for the various versions of each smartphone (approximately):

• iPhone 12 Mini (64GB): $35/month (with a minimum payment of approximately $420 until you can upgrade)
  

• iPhone 12 Mini (128GB): $37/month ($444 until you can upgrade)

• iPhone 12 Mini (256GB): $42/month ($504 until you can upgrade)

• iPhone 12 (64GB): $40/month ($480 until you can upgrade)
  

• iPhone 12 (128GB): $42/month ($504 until you can upgrade)

• iPhone 12 (256GB): $46/month ($552 until you can upgrade)

• iPhone 12 Pro (128GB): $50/month ($600 until you can upgrade)

• iPhone 12 Pro (256GB): $54/month ($648 until you can upgrade)

• iPhone 12 Pro (512GB): $62/month ($744 until you can upgrade)

• iPhone 12 Pro Max (128GB): $54/month ($648 until you can upgrade)

• iPhone 12 Pro Max (256GB): $58/month ($696 until you can upgrade)

• iPhone 12 Pro Max (512GB): $67/month ($804 until you can upgrade)

As part of this price, you’re also paying for AppleCare+—a $149 benefit for the iPhone 12 Mini and iPhone 12, and a $199 benefit for the iPhone 12 Pro and iPhone 12 Pro Max. Once you’ve paid the full price of the phone—typically a 24-month arrangement—you’ll own it for good. You won’t pay any more monthly fees and you’ll be able to do whatever you want with your device, including sell it to someone else on your favorite service.

So, is the iPhone Upgrade Program a good deal? Let’s do the math.

How much it costs if you ignore the Apple Upgrade Program

Suppose you purchased a brand-new iPhone 11, iPhone 11 Pro or iPhone 11 Pro Max when it dropped in September of 2019. If you just bought a base model outright, it would have cost you:

• iPhone 11: $699

• iPhone 11 Pro: $999

• iPhone 11 Pro Max: $1,099

To keep things simple, let’s pretend you now want to trade your iPhone back to Apple to knock some cash off a new iPhone 12. Here’s the maximum value you’ll get for your trade-in (as of when we published this article):

• iPhone 11: $350

• iPhone 11 Pro: $450

• iPhone 11 Pro Max: $500

Here’s what your total spending would look like between September 2019 and today:

• iPhone 11 to iPhone 12: $699 - $350 + $999= $1,348

• iPhone 11 to iPhone 12 Pro: $699 - $350 + $1,099 = $1,448

• iPhone 11 Pro to iPhone 12: $999 - $450 + $999 = $1,548

• iPhone 11 Pro to iPhone 12 Pro: $999 - $450 + $1,099 = $1,648

• iPhone 11 Pro Max to iPhone 12: $1,099 - $500 + $999 = $1,598

• iPhone 11 Pro Max to iPhone 12 Pro: $1,099 -$500 + $1,099 = $1,698

Upgrading ain’t cheap, that’s for sure.

How much it really costs to use the Apple Upgrade Program

Now, suppose you instead signed up for Apple’s iPhone Upgrade Program back in September of 2019. And let’s say you want your new iPhone 12 as soon as you can get your hands on it—after 12 payments. You would have paid approximately this much in monthly fees for the base version of your original iPhone:

• iPhone 11: $420 (12 months times $35)

• iPhone 11 Pro: $600 (12 months times $50)

• iPhone 11 Pro Max: $648 (12 months $54)

And once you upgraded, you’d switch to paying approximately this much each month:

• iPhone 12: $40/mo ($948 total after 24 months)

• iPhone 12 Pro: $50/mo ($1,198 total after 24 months)
  

Assuming you pay off your iPhone 12 or iPhone 12 Pro, here’s how much you would have spent, in total, with Apple’s upgrade service:

• iPhone 11 to iPhone 12: $420 + $948= $1,368

• iPhone 11 to iPhone 12 Pro: $420 - $1,198 = $1,618

• iPhone 11 Pro to iPhone 12: $600 + $948 = $1,548

• iPhone 11 Pro to iPhone 12 Pro: $600 + $1,198 = $1,798

• iPhone 11 Pro Max to iPhone 12: $648 + 948 = $1,596

• iPhone 11 Pro Max to iPhone 12 Pro: $648 + 1,198 = $1,846

The iPhone Upgrade Program is better than an Apple trade-in, but...

If you’re an Apple loyalist and you plan to upgrade every single year from now until the end of time, the iPhone Upgrade Program is the best way to get new iPhones with decent pricing and minimal hassle. It basically guarantees half your older iPhone’s value, even though you’d save the most money buying and selling that iPhone yourself. (More on that in a bit.)

With the iPhone Upgrade Program, you won’t have to worry about reselling your iPhone whenever you want to upgrade to something new; you’ll get AppleCare+ to fix any issues you experience; and Apple will generally accept your older phone when you are ready to upgrade as long as it’s in working condition. This is great if you bought an iPhone with minimal storage, as Apple doesn’t up the trade-in values for those who splurged for more space. The iPhone 11's 64GB, 128GB, and 256GB models are all equal in the eyes of Apple’s trade-in team.

Additionally, your eBay or Swappa buyer might not want to pay top dollar if your device is all dinged up. Apple doesn’t care as much about cosmetics. If you’re sick of playing the “will someone buy it” game or worrying about getting ripped off, tossing your iPhone back to Apple for something shiny and new couldn’t be much easier.

If all you care about is saving cash...

The absolute worst thing you could do is buy your iPhone outright and trade it in to Apple for a new iPhone. Apple will be more than happy to pay you as little as it can for your not-that-old iPhone. And if you want to sell your latest version before Apple has announced its latest device, you’re out of luck; Apple’s not going to buy your iPhone 11 before it announces an iPhone 12.

If you’re most concerned about cash, then buying your iPhone and reselling it is still the best way to save money—assuming you can get a solid price for your device. Take, for example, the basic version of the iPhone 11. If you bought it full price from Apple when it launched in September of 2019 ($699) and bought AppleCare+ for it ($150), you’d be out $850 (not including tax).

Right now, you can sell a 64GB iPhone 11 for roughly $603 on Swappa. That seems a bit high to me, but that’s the average selling price as of October 2020. Basically, you’d only be out around $200 or so for your year’s worth of using your iPhone 11, assuming you kept it in great condition. That’s a bit of money saved over the $420 you would have paid Apple for your year-long iPhone 11 “loan” under the Upgrade Program and you wouldn’t be on the hook for any more Apple devices. Heck, you could go buy an Android if you want.

Going back to our scenarios above—buying an iPhone 11, then upgrading to an iPhone 12—let’s assume that you’d be able to sell your old iPhones for, say, 75% of their original price:

• iPhone 11: Bought for $699, AppleCare+ added for $149, sold for $525

• iPhone 11 Pro: Bought for $999, AppleCare+ added for $199, sold for $750

• iPhone 11 Max: Bought for $1099, AppleCare+ added for $199, sold for $825

Total out-of-pocket cost if you bought an iPhone 11 and hold onto it: $848

Total out-of-pocket cost if you bought an iPhone 11 and sell it today: $323

If you then went ahead and purchased a full-price iPhone 12 ($829), you will have only spent $1,152 in total, or a savings of around $200 versus Apple’s iPhone Upgrade Program. Even if you tack on AppleCare+ for $149, you’re still saving a little cash ($1,301 versus $1,368). And if you never buy AppleCare+ for any of your iPhones, then buying and selling your iPhone yourself is the best financial move you can make. Just make sure you don’t drop your shiny new smartphone...ever.

This guide was updated on October 16, 2020 to account for the iPhone 12, new pricing models, and a new analysis. Everything is basically new from when we originally published this story in September 2018.