The Best Way to Buy Apple’s New iPhone 6s or iPhone 6s Plus

iPhone Upgrade Program

Source: Apple.com

At its September 9 event, Apple announced that it was beginning its own leasing program, called the iPhone Upgrade Program. The program assumes that you want a new iPhone each year. So we took a look at what you really get with the iPhone Upgrade Program, and found that it actually isn’t always the best choice for users who want to upgrade to the latest iPhone each year. In fact, buying each new iPhone at its full retail price is often a better option — one that can save you money over several iPhone-toting years.

How does the iPhone Upgrade Program work?

Let’s say that you’ve decided against the entry-level 16GB iPhone 6s, and instead are going with the 64GB model (so that you don’t have to worry about how much space all those Live Photos and 3D Touch-enabled apps are going to take up). With Apple’s iPhone Upgrade Program, you can spread out the cost of that new iPhone, which retails for $749, over 24 months. So you’ll pay $36.58 per month for 24 months, which comes out to $877.92 — perhaps a little bit higher than you were thinking it would be, since the program does include the cost of the AppleCare+ warranty. (A little more on that later.)

But here’s where things get interesting. Apple’s iPhone Upgrade Program also gives you the option of getting a new phone after just 12 months. This should work just like an upgrade on a carrier contract plan, though the plan is a 24-month agreement that renews if you upgrade after 12 months. This is the same direction that carriers are moving in as they switch 24-month contracts, where you pay a chunk of the phone’s retail price upfront, for 24-month installment plans, where you spread out the full cost over two years.

What does it cost to lease a new iPhone each year?

iPhone 6s rose gold

Source: Apple.com

So if you want to upgrade to the theoretical iPhone 7 next year, you’ll need to start a new two-year agreement with Apple. The company hasn’t yet shared the full legal terms of the iPhone Upgrade Program, so it hasn’t yet explained whether or how you can opt out of your agreement with it. But let’s assume that you want to stick with Apple’s iPhone Upgrade Program when you want a new iPhone next year.

That $877.92 you’re paying over 24 months, $36.58 at a time, gets you not one, but two new iPhones in two years — which doesn’t sound bad at all given that the full retail price of one is $749. Let’s say you really love your iPhones, and you use the iPhone Upgrade Program to get the iPhone 6s, the theoretical iPhone 7, and the really-theoretical iPhone 7s. You’ll pay $1,316 in three years, for three new phones. That still sounds pretty good.

What does it cost to buy and sell an iPhone each year?

But let’s consider an alternative. Apple’s new iPhone 6s retains the same pricing as the iPhone 6 in terms of full retail pricing. So let’s say that right now, you’ve got an iPhone 6 with 64GB of storage, and you’re looking to upgrade to the new iPhone 6s with 64GB of storage. Let’s say that you bought your iPhone 6 outright last year. That would have cost you $749. The iPhone 6s you want this year will also cost you $749. So the logical thing to do would be to sell your old iPhone to recoup as much of the value as you can, and put the cash toward the new iPhone 6s.

iPhone 6s silver

Source: Apple.com

The best way to do that is to not to trade in your old iPhone with Gazelle, Walmart, BuyBack World, or a host of other places that will buy your iPhone to resell. Instead, you should sell it directly to another user, like on eBay, where a cursory search for the 64GB iPhone 6 turns up auctions and Buy It Now listings ranging between $350 and around $600, though you can get considerably more if yours is unlocked instead of tied to a specific carrier. There’s quite a bit of variability here, as shoppers look for a phone in the color they want, associated with the carrier they intend to use.

But eBay’s “trending price,” which the site says “is the median price based on sales of this product in the same condition from all listings on eBay.com in the past 14 days,” gives a good guide to the value you’d likely be able to get. A random selection of these trending prices currently puts the value of the space gray 64GB iPhone 6 from Verizon at $450,the gold version from AT&T at $500, the gold version from Sprint at $520, the gold version from Verizon at $540, the gold version from T-Mobile at $600, and an unlocked space gray version at $710.

How much can you really save?

Let’s be reasonably optimistic and say that you can get $550 for your iPhone 6 — a little bit less than the average of eBay’s trending prices — which means that you lose only $200 for having used it for a year. That means that while you paid the $749 out-of-pocket for that new iPhone 6 last year, you’ll only have to pay $200 this year to get a new iPhone 6s. For two new iPhones in two years, you’re paying only $949. And you aren’t locking yourself in to a leasing plan, or even a carrier contract. If we assume that the theoretical iPhone 7 next year will also cost you just $749, and assume that you can lose just $200 on your iPhone 6s, then you get three new iPhones in three years for $1,149.

That’s 13% less than the $1,316 you would have needed to pay Apple for three new phones obtained through the iPhone Upgrade Program — which, it’s worth mentioning, are phones that you haven’t fully paid for. That means that you’ll need to swap your old iPhone for a new one — no sticking it in a drawer to keep in case of a catastrophic, screen-shattering drop or an altercation between your iPhone and the swimming pool.

For the record, the same money-saving logic applies whether you’re looking at a 16GB iPhone, a 64GB model, or even the 128GB model. The 16GB iPhone 6s costs $649 upfront, or $777.84 over 24 months with the iPhone Upgrade Program. eBay’s trending prices for the 16GB iPhone 6 range from $430 to $500, which illustrate that you might lose as little at $150 of the phone’s value by selling it to pay for the purchase of a new iPhone 6s. Or with the 128GB iPhone 6 and iPhone 6s, which both cost $849 at their launch, eBay puts the current going price for the iPhone 6 between $550 and $725, which would give you plenty of cash to pay for most of an upgrade to the new iPhone 6s.

When is the iPhone Upgrade Program worth it?

iPhone 6s space gray

Source: Apple.com

Perhaps ironically, the iPhone Upgrade Program is primarily worth the extra money for users who do anticipate such events, since the program bundles in the cost of the AppleCare+ plan with your monthly payments toward your iPhone. While AppleCare+ doesn’t cover a lost or stolen iPhone, it does reduce what you have to pay to fix a dropped phone. If you end up purchasing the plan with each new iPhone, its inclusion in the upgrade program can actually make the plan worth it for you. Consider that 64GB iPhone 6s, which costs $749. The $129 for the AppleCare+ warranty would raise the price to $878 — right on par with the $877.92 you’d pay over two years.

The problem with the iPhone Upgrade Program is that frequent upgraders lose the opportunity to recoup some of the value of their year-old iPhones — value that eBay’s trending prices illustrate is still very much there for a phone that just a year ago was Apple’s top-of-the-line new model. The program is a clear effort to get a bigger proportion of the iPhone’s user base upgrading to the new iPhone each year. But it isn’t for you if you wouldn’t otherwise buy the AppleCare+ warranty, and especially if you’re not really planning to upgrade every year.

The major U.S. carriers offer a wide range of different plans, and many of them will also be a better deal for most customers than the iPhone Upgrade Program. T-Mobile’s Jump! plan, Sprint’s iPhone Forever program, AT&T Next, and installment plans from Verizon can all end up costing less per month and in total. (Check out our guide to which carrier is offering what options.) Even if you aren’t interested in buying and selling a new iPhone each year, you should do your research to see how much of a better deal your carrier can offer you than what Apple is offering with the iPhone Upgrade Program.

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