M5 Studio base pre-ordered using Apple Upgrade lease

[Happy_John]

Same here, I have a small business which can afford the cash price buyout if I needed, but my CFA says why do that - when I can use someone else's money.

Plus it's a tax deduction for 3 years since it's a lease!

Yep, this is my accountant's argument - I can use the tax deduction over the whole of the agreement period.

 

[Apple fanboy]

Is that a GST/HST/VAT tax ?

We call it sales tax here in the US - mine is 8.75%.

VAT.

 

[maflynn]

We call it sales tax here in the US - mine is 8.75%.

Is that added on to your payment like a car lease?

 

[4sallypat]

Is that added on to your payment like a car lease?

Yes, sales tax is added onto every month's payment for a lease.

My Studio gets $4.40 added onto to each month's payment; just like a car lease.

 

[Apple fanboy]

Is that added on to your payment like a car lease?

20% on just about any purchase. Be it a service or product.

 

[Happy_John]

20% on just about any purchase. Be it a service or product.

With VAT though, you can offset the VAT ( value added tax) that you pay on goods and services against the VAT you charge others for your goods and services, if you're a business.

As a private buyer, you simply have to pay it.

 

[m1maverick]

Yes, this is what I think Klarna will do - similar to how Apple enrolls corporate / enterprise customer devices into DEP and using a mobile device manager (MDM) for control.

Klarna lease contract says the device does NOT belong to you - but it belongs to the leasor (Klarna).

Will have to see if during activation, a provisioning profile will get installed, making it accessible / controllable / lock ability by their MDM.

I wasn't aware Klarna did leasing. Learn something new every day.

 

[Apple fanboy]

With VAT though, you can offset the VAT ( value added tax) that you pay on goods and services against the VAT you charge other for your goods and services, if you're a business.

As a private buyer, you simply have to pay it.

As a buyer for a business I know how that works. I could have bought it through work but I don’t want to open that can of worms. If my boss sees me dropping £7k on a new computer, he’ll definitely will think I’m overpaid!

 

[m1maverick]

Leasing isn’t for me. Never leased a car or tech. Never will.

If you're the type of person who buys and holds then leasing might not be for you. However if you're someone who likes or needs to have the latest and greatest leasing can make more sense.

Apples Upgrade program can even make sense for those who buy and hold as it gives you the ability to make 24 or 36 months worth of payments and then buy the system out at the end of the term. Given there's no money factor and the payments + buy out = original purchase price it's like having zero percent financing for a portion of the system and then a balloon payment at the end.

Take the base model Studio Ultra at $5,499.00. You can either:

1. Pay $5,499.00 upfront and own it
2. Lease it for $110.10 / month for 36 months and then exercise the buyout option of $1,535.40.

Either way you shell out $5.499. Note this is just for illustrative purposes, I got the $110.10/month from Apple's website and I assume the residual will be $1,535.40 based on what I know of the program.

 

[m1maverick]

Fun fact. Never checked my credit score in my life.

You can be assured others are.

 

[4sallypat]

If you're the type of person who buys and holds then leasing might not be for you. However if you're someone who likes or needs to have the latest and greatest leasing can make more sense.

Apples Upgrade program can even make sense for those who buy and hold as it gives you the ability to make 24 or 36 months worth of payments and then buy the system out at the end of the term. Given there's no money factor and the payments + buy out = original purchase price it's like having zero percent financing for a portion of the system and then a balloon payment at the end.

Take the base model Studio Ultra at $5,499.00. You can either:

1. Pay $5,499.00 upfront and own it
2. Lease it for $110.10 / month for 36 months and then exercise the buyout option of $1,535.40.

Either way you shell out $5.499. Note this is just for illustrative purposes, I got the $110.10/month from Apple's website and I assume the residual will be $1,535.40 based on what I know of the program.

Yup, the 0% money factor (MF) is the biggest draw for me.

Leases typically builds in depreciation with a MF; but the Apple Upgrade lease does not have any interest / MF which is surprising that Apple "pays" for the depreciation.

I love this new Apple Upgrade lease - it's definitely much better than the short term 12 month Apple Card 0%.

And the best part is that Apple will PAY you 3% each month when you use the Apple Card to pay for the monthly Klarna lease!

 

[Happy_John]

As a buyer for a business I know how that works. I could have bought it through work but I don’t want to open that can of worms. If my boss sees me dropping £7k on a new computer, he’ll definitely will think I’m overpaid!

But the tax deduction from leasing isn't a deduction of VAT, it's a deduction from income tax / business tax, as the monthly cost of the leasing is an expense, so reduces monthly profits. In that way, the offset can be over the whole of the leasing (or purchasing in instalments) period, whereas if you buy outright, you can only treat the purchase as an expense for the tax period in which you bought it ( for me as a small business, that period is month, as it suited me to choose that, but I do have the option to set the period as a month, a quarter or a year).

Technically, computer equipment becomes an asset the business holds, but technology depreciates so quickly it is effectively just an expense.

 

[Apple fanboy]

You can be assured others are.

Why? I don’t borrow any money and have never owned a credit card. Only a mortgage which I plan to finish next year.

 

[m1maverick]

Why? I don’t borrow any money and have never owned a credit card. Only a mortgage which I plan to finish next year.

Insurance companies and employers are two I can think of off the top of my head.

 

[Apple fanboy]

Insurance companies and employers are two I can think of off the top of my head.

Employers don’t check credit scores. At least not in any industry I’ve employed people.

 

[m1maverick]

Employers don’t check credit scores. At least not in any industry I’ve employed people.

Yes, employers do. Maybe not in your profession or any that you’ve worked for but they do check.

That said others are checking your credit. I don’t like it but that’s the reality of today’s society.

 

[CookeeTim]

Leasing? I'd rather own the computer.

Economic rules says that if you cant afford it without having to resort to lending/leasing, then, maybe you shouldn't.

Unless it is generating you money (and I mean, money to pay for itself, not "I prefer to read my email in this"), there are other cheaper options that will just do right.

 

[fathergll]

I don’t know what framework they would need. If they wanted to do it they could use their activation servers to force a Klarna provisioning profile on to the Mac when you activate it.

Same mechanism they use for business and enterprise customers now. Profile is assigned by serial number when the Mac ships. Companies can have MacBooks drop shipped to employees and they automatically download the profile and provision on the companies device management platform of choice without an IT person ever touching it. It would probably be pretty trvial for Apple/Klarna to rig up this system to automatically lockdown the mac if x number of payments are missed.

We are not Klarna employees. I know technically they can do that as that's how enterprise IT has worked for many years but they are not going to secretly push provisioning profiles to people's computers under the under the guise that they are purchasing a personal computer even if it is a lease. You do this in enterprise solutions since the computers that employees are using are always the company's property but pushing provisioning profile to private computers that they own and many people buying this with the intention of privacy?

One of the big selling points of a local LLM is privacy and but having a Klarna provisioning profile on there? If they somehow were dumb enough to push a profile like that it would be big news and would tank a lot of sales since 0% interest for 36 months ain't that good. Thats why Apple spokesperson addressed it right away to the Verge when the iOS framework was discovered. Apple's entire spiel is data privacy.

 

[Apple fanboy]

Yes, employers do. Maybe not in your profession or any that you’ve worked for but they do check.

That said others are checking your credit. I don’t like it but that’s the reality of today’s society.

Well it doesn’t bother me if I’m honest. I have no need to borrow any money.

 

[fathergll]

Easy, if the device cannot verify after x number of tries / days then it defaults to lockdown mode.

Heh. Yes what I mean is lockdown mode isn't a solution. There would need to be new framework with manual offline polling.

 

[IvyKing]

Is that a GST/HST/VAT tax ?

We call it sales tax here in the US - mine is 8.75%.

N.B. There is a difference between VAT (Value Added Tax) and sales tax. Sales tax is based on the entirety of the final purchase price, while VAT is based one the difference between what the seller charged for the product/service and what the seller paid for the product.

 

[Happy_John]

Economic rules says that if you cant afford it without having to resort to lending/leasing, then, maybe you shouldn't.

Unless it is generating you money (and I mean, money to pay for itself, not "I prefer to read my email in this"), there are other cheaper options that will just do right.

Can’t agree more. Treating high specs as a flex with privately bought tech is incredibly dumb - buy something that doesn’t depreciate so quickly.

Powerful computers are tractors, not sportscars - they’re meant to do heavy lifting.

 

[sevoneone]

That is a good point, the uncertainty of life and being locked into a 50 to a 400 dollar a month lease. Also you'll be doubly worse off if you break the lease, between the penalty fees, and losing the computer. Now you paid a lot of money monthly and you have nothing to show for it

Welcome to the current economic circle: Can't grow a savings because cost of living and goods are high. Can't afford anything because they don't have a savings. People mistake low monthly payments with "I can afford this" all the time. Financial Literacy should be a High School subject students should have to take all 4-years to graduate in our society. I most places it's a single semester "Life Management" class.

Yes, sales tax is added onto every month's payment for a lease.

My Studio gets $4.40 added onto to each month's payment; just like a car lease.

I need to go back and look. Is tax included in their residual/buyout price at the end of the lease? People need to be aware of that if it isn't.

 

[enricoclaudio]

Welcome to the current economic circle: Can't grow a savings because cost of living and goods are high. Can't afford anything because they don't have a savings. People mistake low monthly payments with "I can afford this" all the time. Financial Literacy should be a High School subject students should have to take all 4-years to graduate in our society. I most places it's a single semester "Life Management" class.



I need to go back and look. Is tax included in their residual/buyout price at the end of the lease? People need to be aware of that if it isn't.

Tax is not included in the buyout price, same as for the monthly payment and same as if you purchase it full cash.

 

[Apple fanboy]

Tax is not included in the buyout price, same as for the monthly payment and same as if you purchase it full cash.

Not in the UK. Tax rules are different across the planet.