Is the iPhone Upgrade Program a Good Deal?

It’s a question I get a lot from friends: Should I buy an iPhone directly from Apple, directly from my carrier, or should sign up for Apple’s iPhone upgrade program? The easy answer is a cop-out. It depends. But it’s also more accurate than telling them to write off Apple’s subscription iPhone program just because it sounds like a cash-grab.

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.

Let’s take a look:

Crunching the numbers on Apple’s iPhone Upgrade Program

Consider the iPhone 11 and iPhone 11 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 11 (64GB): $35/month or $847 (with a minimum payment of approximately $420 until you can upgrade)
• iPhone 11 (128GB): $37/month or $898 (or $372 until you can upgrade)
• iPhone 11 (256GB): $42/month or $998 (or $420 until you can upgrade)
• iPhone 11 Pro (64GB): $50/month or $1,198 (with a minimum payment of $504 until you can upgrade, approximately)
• iPhone 11 Pro (256GB): $56/month or $1,348 (or $576 until you can upgrade)
• iPhone 11 Pro (512GB): $65/month or $1,548 (or $672 until you can upgrade)
• iPhone 11 Pro Max (64GB): $54/month or $1,298 (with a minimum payment of $552 until you can upgrade, approximately)
• iPhone 11 Pro Max (256GB): $60/month or $1,448 (or $624 until you can upgrade)
• iPhone 11 Pro Max (512GB): $69/month or $1,648 (or $720 until you can upgrade)

As part of this price, you’re also paying for AppleCare+—a $149 benefit for the iPhone 11 and $199 benefit for the iPhone 11 Pro and iPhone 11 Pro Max. And 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.

Playing pretend with the last generation’s iPhones: XR / XS / XS Max

Suppose you purchased a brand-new iPhone XR, iPhone XS or iPhone XS Max when it dropped in September or October of 2018. If you just bought a base model outright, it would have cost you:

• iPhone XR: $749
• iPhone XS: $999
• iPhone XS 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 11. As of this writing, here’s what you’d get for your trade-ins:

• iPhone XR: $245
• iPhone XS: $270
• iPhone XS Max: $340

So if you’re going basic, you’ll pay this much in total for the cheapest iPhone 11:

• iPhone XR trade-in, iPhone 11 purchase: $455
• iPhone XS trade-in, iPhone 11 purchase: $430
• iPhone XS Max trade-in, iPhone 11 purchase: $360

And if you’re going big and grabbing the base version of the iPhone 11 Pro Max, here’s what you’d pay out of pocket:

• iPhone XR trade-in, iPhone 11 Pro Max purchase: $854
• iPhone XS trade-in, iPhone 11 Pro Max purchase: $829
• iPhone XS Max trade-in, iPhone 11 Pro Max purchase: $739

Here’s what your total spending for both phones would look like between September/October of 2018 and today:

• iPhone XR to iPhone 11: $749 + $455 = $1,204
• iPhone XR to iPhone 11 Pro Max: $749 + $854 = $1,603
• iPhone XS to iPhone 11: $999 + $430 = $1,429
• iPhone XS to iPhone 11 Pro Max: $999 + $829 = $1,828
• iPhone XS Max to iPhone 11: $1,099 + $360 = $1,459
• iPhone XS Max to iPhone 11 Pro Max: $1,099 + $739 = $1,838

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

Now, suppose you instead signed up for Apple’s iPhone Upgrade Program back in 2018. And let’s say you got your new iPhone 11 the month it came out (September 2019). By then, you would have paid approximately this much in monthly fees for the base version of your original iPhone:

• iPhone XR: $407 (11 months times $37)
• iPhone XS: $600 (12 months times $50)
• iPhone XS Max: $648 (12 months $54)

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

• iPhone 11: $35 (24 months of $29, plus AppleCare)
• iPhone 11 Pro Max: $54 (24 months of $46, plus AppleCare)

Warping forward to today (11 months of iPhone Upgrade Program pricing), here’s how much you would have spent, in total, with your various upgrades:

• iPhone XR to iPhone 11: $407+ $389 = $796
• iPhone XR to iPhone 11 Pro Max: $407 + $595 = $1,002
• iPhone XS to iPhone 11: $600 + $389 = $989
• iPhone XS to iPhone 11 Pro Max: $600 + $595 = $1,195
• iPhone XS Max to iPhone 11: $648 + $389 = $1,037
• iPhone XS Max to iPhone 11 Pro Max: $648 + $595 = $1,243

Easy decision, right? iPhone Upgrade Program all the way? Not quite.

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 going to be the best way to get new iPhones with decent pricing and minimal hassle.

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. Your eBay or Swappa buyer might not want to pay top dollar for a dinged-up device, and 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.

The absolute worst thing you could do is buy your iPhone outright and trade it in to Apple for something new. 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.

However, if you’re most concerned about cash, then buying your iPhone outright and reselling it yourself is still the absolute 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 $624 on Swappa. That seems a bit high to me, but that’s the average selling price as of August of 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 $385 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 XR, then upgrading to an iPhone 11—let’s assume that you’d be able to sell your old iPhones for, say, 75% of their original price:

• iPhone XR: Bought for $749, AppleCare+ added for $150, sold for $562
• iPhone 11: Bought for $700, AppleCare+ added for $150, sold for $525

Total out-of-pocket cost if you bought an iPhone 11 and hold onto it: $1,187

Total out-of-pocket cost if you bought an iPhone 11 and sell it today: $662

If you stayed with the iPhone XR-to-11 setup using Apple’s iPhone Upgrade Program and simply paid off your iPhone 11 after 24 months, you’d be out its full price, the price of AppleCare+, and what you already paid to use your iPhone XR: 1,254.92. That’s not a huge difference between the iPhone Upgrade Program, I realize, but you can blame AppleCare+ for that: You’re buying it twice and getting nothing for it in return.

This is also assuming you can only recapture 75% of your device’s value when selling it to a reseller. If you can make that figure go higher—say, 90%—and you don’t sign up for AppleCare, then life is good. Buying your iPhone outright will save you the most money, just make sure you don’t drop it… ever.

Update August, 2020: I completely overhauled this guide to account for new iPhones, new pricing models, and a new analysis. Everything is basically new from when we originally published this story in September 2018.