Apple Upgrade program: is it worth it?

[janeauburn]

I wonder whether this is a better idea financially than simply buying a phone outright each time and selling it on ebay when you've upgraded.

 

[frozencarbonite]

My main concern and yet to be answered question is, do they perform a credit check on your every time you upgrade? This is huge for me because we are looking to move in the next year and don't want multiple credit checks hurting us.

The reason I say yet to be answered is because this is the first year of the AUP and no one really knows. People have speculated, but not really sure. I guess I could call Citizens One bank to see if they could answer that question.
[doublepost=1473185406][/doublepost]

I wonder whether this is a better idea financially than simply buying a phone outright each time and selling it on ebay when you've upgraded.

I'm not sure about financially. I think it's a clever way for them to hide the price of the phone, but it is probably less of a hassle.

 

[hubieonekanubie]

My main concern and yet to be answered question is, do they perform a credit check on your every time you upgrade? This is huge for me because we are looking to move in the next year and don't want multiple credit checks hurting us.

The reason I say yet to be answered is because this is the first year of the AUP and no one really knows. People have speculated, but not really sure. I guess I could call Citizens One bank to see if they could answer that question.
[doublepost=1473185406][/doublepost]

I'm not sure about financially. I think it's a clever way for them to hide the price of the phone, but it is probably less of a hassle.

Why not call Citizens one? tel:1-888-201-6306 They should be able to tell you definitively.

 

[mjwebb]

My main concern and yet to be answered question is, do they perform a credit check on your every time you upgrade? This is huge for me because we are looking to move in the next year and don't want multiple credit checks hurting us.

The reason I say yet to be answered is because this is the first year of the AUP and no one really knows. People have speculated, but not really sure. I guess I could call Citizens One bank to see if they could answer that question.
[doublepost=1473185406][/doublepost]

I'm not sure about financially. I think it's a clever way for them to hide the price of the phone, but it is probably less of a hassle.

I remember reading a couple days ago on some forum about the catastrophe on launch day with the IUP, that they would only do another credit check if you went all 24 months without upgrading. As long as you renew your upgrade before that 24 months, then you were safe.

Again, this is from the internet though, and you must believe everything they say online, right?

 

[brianric]

Do we know for certain they will do a hard credit check when renewing AUP?

I went to the Apple Store yesterday in Delaware and asked that particular question. The response was a soft pull of your credit.

 

[stlredbird]

Does anyone know if there would then be an activation fee with AT&T with each new phone? If so it may just be worth it to go with AT&T Next Every Year instead.

 

[frozencarbonite]

I called Citizens One. They only deal with the loan after it's been initiated.

I then called Apple. The lady I spoke with said that there IS a second credit check done at the time of your upgrade, BUT it is only a soft check.

She had to put me on hold to ask someone else. She said that this was the first time someone had asked her this.

 

[jgibbs1685]

I was told by Citizens Bank that a hard pull would be done because they are considering it a new loan.
Hopefully this gets cleared up soon.

 

[frozencarbonite]

I went to the Apple Store yesterday in Delaware and asked that particular question. The response was a soft pull of your credit.

Ha! Beat me to it.
[doublepost=1473188571][/doublepost]

I was told by Citizens Bank that a hard pull would be done because they are considering it a new loan.
Hopefully this gets cleared up soon.

Interesting and frustrating; getting two different answers. Not sure who to believe.

If it weren't for probably buying a new house soon, I wouldn't worry about it. But two hard credit checks like that within a couple of years can't be good.

 

[THE JUICEMAN]

Ha! Beat me to it.
[doublepost=1473188571][/doublepost]

Interesting and frustrating; getting two different answers. Not sure who to believe.

If it weren't for probably buying a new house soon, I wouldn't worry about it. But two hard credit checks like that within a couple of years can't be good.

I didn't think two credit checks within a year would cause any issues with getting a house loan. I'll ask a loan processor that I know for you.

 

[frozencarbonite]

I didn't think two credit checks within a year would cause any issues with getting a house loan. I'll ask a loan processor that I know for you.

Oh, that would be great. Thanks!

 

[KdParker]

I have (had) 2 phones on the AUP. My husband and I both signed up for it last year at the launch of the 6s+ last year. Recently I paid mine off and sold it. (Long story, went to Android, hated it). I now plan to get the 7+ at launch and get back on the plan.

No hidden fees, you sign up for it. They run a credit check and the phone is financed through Citizens Bank. I had the 64g 6s+ and my payment was $40.75/mo. My husband had the 128g and his was $44.91. Those payments include the AppleCare that you get with the phone. After 1 year (12 payments) you are eligible to upgrade. Nobody really knows the exact scenario for the upgrade as this will be the 1st year. Most would assume you are able to get the new phone and then will have a period of time to return your old one to Apple. But we will soon find out.

I like the AUP, I think it was good. It's just breaking down the cost of the phone, plus the AC into 24 payments and you can upgrade after 12. There is no penalty for paying it off early either.

Last year the sign up process could only be in store. Since then, they have set up the AUP to be done online. I am really hoping it stays that way for the 7 launch. Having to do it in store was a pain. You have to use a CC to sign up, the payments will be charged to your card each month. I never switched mine over but people said you could change the payment method over to your debit card or another card after set up but I was not aware of that. Not really a huge deal to have it on the CC just as long as you make the payment to the card each month to avoid interest charges.

You can sign up online, but how will the connection to citizens bank hold up for approvals?

Apple can't connect to there finance partner sporatically on a normal day. I doubt that the they will be able to handle the load on pre-orders.

 

[sportsfrk214]

I wonder whether this is a better idea financially than simply buying a phone outright each time and selling it on ebay when you've upgraded.

The following is a lengthy post that I made last year on this very question. I hope you find it helpful

So many people are so caught up on how the Upgrade Program is costlier than buying a new phone each year and selling the old one on sites like eBay. For me, that misses the point. The phone I want costs about $900 (including tax). Apple is charging me about $500 to use it for a year. If I were to go the route of selling my old phone every year, I doubt I'd clear more than $500 after fees and what not. Not saying you can't do better, but I feel $500 is on average a generous estimate for a 1 year old used phone. So that means it cost me $400 for the year for the phone, which is $100 less. So in essence, I'm paying approximately $100 extra per year to use Apple's program (using generous estimates on phone resale value).

So, what do I get for my extra $100? First, AppleCare. That's nice to have and to know that breaking my phone won't mean I need to pay full price for another, or an exuberant repair fee. Second, I get convenience. I don't have to go through the process every year of selling my phone. The process from creating the initial listing to getting feedback is often several weeks. And I often find it hard to coordinate selling my old phone with getting the new one, with the goal being to avoid being without a phone. The best time to sell your phone to maximize profit is before the keynote and everyone begins selling phones, but you often have to wait several weeks to sell until the new phone is out. Third, you get a safe reliable way to upgrade every single year. There's zero hassle. When the new phone comes out, I simply go into an Apple Store and get it. Plain and simple.

For me, if all of that only costs me $100 a year extra, it's 100% worth it. Of course it's more expensive. But it has advantages. And I think the gap in price will only narrow as this slowly chips away at iPhone resale value, which won't remain this high forever. The $100 difference (max) is worth it to me for what I get. I know some will say that we all can't be so free with our money - and to that I would say, if that amount of extra money is too much for you, then maybe you should be spending your money on things other than a new cell phone every year. For some people, there are intangible things that matter outside of the raw dollars that it costs.

 

[Wowereit]

I wonder whether this is a better idea financially than simply buying a phone outright each time and selling it on ebay when you've upgraded.

No, it's definitely not.
Just do some quick mathematics, if you use your upgrade you will lose some but not that much, but in case you won't use it you will simply overpay for the phone by a huge margin.

 

[THE JUICEMAN]

Oh, that would be great. Thanks!

Ok she works for Suntrust Bank and is a mortgage processor. She says they would be looking at your income/debt ratio. As long as you still qualify with the monthly iPhone payment factored into your debt then you are fine. She also said of course you don't want to open any credit cards during the loan process but I'm guessing you knew that part. According to her it doesn't sound like the credit checks would impact you getting a home loan. Of course check with your specific bank.

 

[frozencarbonite]

Ok she works for Suntrust Bank and is a mortgage processor. She says they would be looking at your income/debt ratio. As long as you still qualify with the monthly iPhone payment factored into your debt then you are fine. She also said of course you don't want to open any credit cards during the loan process but I'm guessing you knew that part. According to her it doesn't sound like the credit checks would impact you getting a home loan. Of course check with your specific bank.

Thank you so much for asking! That was very helpful!

We actually use Suntrust as our current mortgage lender.

 

[THE JUICEMAN]

Thank you so much for asking! That was very helpful!

We actually use Suntrust as our current mortgage lender.

No problem! Good luck with everything.

 

[hubieonekanubie]

My main concern and yet to be answered question is, do they perform a credit check on your every time you upgrade? This is huge for me because we are looking to move in the next year and don't want multiple credit checks hurting us.

The reason I say yet to be answered is because this is the first year of the AUP and no one really knows. People have speculated, but not really sure. I guess I could call Citizens One bank to see if they could answer that question.
[doublepost=1473185406][/doublepost]

I'm not sure about financially. I think it's a clever way for them to hide the price of the phone, but it is probably less of a hassle.

From Apple's site:http://www.apple.com/shop/iphone/iphone-upgrade-program
It doesn't say specifically if you're credit is going to be checked but I'm guessing it is.
Whether you’re buying or upgrading at the Apple Store, here’s what you’ll need to bring.
Your carrier information.
If you currently have a wireless account, be sure to bring along your password and any other relevant account information.

Your personal information and credit card.
You will be asked to provide your Social Security number and date of birth for a credit check. You will also need a valid U.S. credit card. Debit cards and prepaid cards are not accepted.

Two forms of identification.
You’ll need valid primary and secondary forms of ID, and the first and last names on both must match.

View acceptable forms of ID

Your current mobile phone.
If you’re enrolling in the iPhone Upgrade Program for the first time, remember to back up your data to your computer or iCloud, and take note of your Apple ID. If you're upgrading, you’ll need to bring your current iPhone with you to trade in during your appointment. If it’s not in good condition, you may need to pay an incident fee to have it repaired.

 

[ChrisotpherRS]

No, it's definitely not.
Just do some quick mathematics, if you use your upgrade you will lose some but not that much, but in case you won't use it you will simply overpay for the phone by a huge margin.

How do you figure that you would lose money or overpay? A 128GB iPhone 7 costs $749. Apple Care costs $129. The AUP monthly fee is $36.58 over 24 months with no interest or hidden fees. That comes to a total out of pocket cost after 24 months of $877.29, plus tax that you'd have to pay regardless of how you purchase the phone. The total cost of the AUP "loan" minus the $129 for Apple Care comes to $748.29, the same price as the upfront payment. At the end of 24 months, if you choose not to upgrade, you would own the phone and be able to sell it. If you close to upgrade, you would then trade your "equity ownership" in half the phone (12 payments) to get an upgraded phone under the same two-year contract.

It seems to me that if you always buy Apple Care, as many people do, there is absolutely no downside to using AUP other than not being able to sell your phone before you upgrade (but who does that anyway?). The upsides are that your $749 says in your bank account for a longer period of time rather than Apple's bank account and you have the option of upgrading without the hassle of selling your old phone in a saturated market.

Why not let Apple give you free money for two years? Am I missing something?

 

[THE JUICEMAN]

So I'm having a lot of trouble here. I want to pre order but I can't figure out how when doing the upgrade program and using t mobile. Online it says you can only do it in the store. I went to the store and they said you can't pre order you just have to wait until the phone comes out. ☹️

 

[frozencarbonite]

From Apple's site:http://www.apple.com/shop/iphone/iphone-upgrade-program
It doesn't say specifically if you're credit is going to be checked but I'm guessing it is.
Whether you’re buying or upgrading at the Apple Store, here’s what you’ll need to bring.
Your carrier information.
If you currently have a wireless account, be sure to bring along your password and any other relevant account information.

Your personal information and credit card.
You will be asked to provide your Social Security number and date of birth for a credit check. You will also need a valid U.S. credit card. Debit cards and prepaid cards are not accepted.

Two forms of identification.
You’ll need valid primary and secondary forms of ID, and the first and last names on both must match.

View acceptable forms of ID

Your current mobile phone.
If you’re enrolling in the iPhone Upgrade Program for the first time, remember to back up your data to your computer or iCloud, and take note of your Apple ID. If you're upgrading, you’ll need to bring your current iPhone with you to trade in during your appointment. If it’s not in good condition, you may need to pay an incident fee to have it repaired.

Does anyone know how this works on the Apple site? How do you provide a form of ID online? Scanning it? Or do you even have to? Maybe a social security number?

Also, I don't think you have to turn in your current phone unless you are already in the plan and upgrading or if you just want to when initially enrolling.

 

[hubieonekanubie]

Does anyone know how this works on the Apple site? How do you provide a form of ID online? Scanning it? Or do you even have to? Maybe a social security number?

Also, I don't think you have to turn in your current phone unless you are already in the plan and upgrading or if you just want to when initially enrolling.

You don't provide that until you go into the store. You set up a reservation to pick up your phone online, but must go to a store to pick it up.

 

[dwendz23]

I'm conflicted. How long does the credit check process take when ordering, and how tough are they if you have decent credit? I don't want to be in the process of ordering tonight and then get denied. So I'm not sure whether I should do the upgrade program or just pay the 2 year contract price from Verizon.

 

[Wowereit]

How do you figure that you would lose money or overpay? A 128GB iPhone 7 costs $749. Apple Care costs $129. The AUP monthly fee is $36.58 over 24 months with no interest or hidden fees. That comes to a total out of pocket cost after 24 months of $877.29, plus tax that you'd have to pay regardless of how you purchase the phone. The total cost of the AUP "loan" minus the $129 for Apple Care comes to $748.29, the same price as the upfront payment. At the end of 24 months, if you choose not to upgrade, you would own the phone and be able to sell it. If you close to upgrade, you would then trade your "equity ownership" in half the phone (12 payments) to get an upgraded phone under the same two-year contract.

It seems to me that if you always buy Apple Care, as many people do, there is absolutely no downside to using AUP other than not being able to sell your phone before you upgrade (but who does that anyway?). The upsides are that your $749 says in your bank account for a longer period of time rather than Apple's bank account and you have the option of upgrading without the hassle of selling your old phone in a saturated market.

Why not let Apple give you free money for two years? Am I missing something?

Well, if you are upgrading yearly by reselling your old phone, Apple Care isn't necessary and you won't recover it's cost entirely with resell value.
I can't speak for american pricing for used last year's iPhones, but if I'm paying 750€ here in Germany I will get 530 to 550€ one year later. This year might get a little bit harder due to the storage upgrade, so I'm going with a low estimate of 500€.

Looking at year 1:
I'm paying 750$.
You end up paying 440$ during the year.

Year 2 and following:
I'm paying 250$ difference between my old and my new phone.
You end up paying 440$ during the year.

You see my point? Long term I'm saving money.
If you can't achieve same resell value in the US it might be different for you.

Year / Me / You
1 / 750 / 440
2 / 1000 / 880
3 / 1250 / 1320
4 / 1500 / 1760
5 / 1750 / 2200

 

[frozencarbonite]

You don't provide that until you go into the store. You set up a reservation to pick up your phone online, but must go to a store to pick it up.

I just spoke with someone at Apple. When you pre-order through Apple's website, they will be shipped to your home. If you apply for the AUP, that will ask for a scan of your IDs.

I'm conflicted. How long does the credit check process take when ordering, and how tough are they if you have decent credit? I don't want to be in the process of ordering tonight and then get denied. So I'm not sure whether I should do the upgrade program or just pay the 2 year contract price from Verizon.

The person I spoke with said you pretty much find out instantaneously if you are approved or not.