What is the Apple Upgrade Program? And is it a good-value way of buying new iPhones?

In amongst all the fuss over the iPhone 7 launch, you may have heard about Apple's new iPhone Upgrade Program. (Pleasingly, Apple is actually calling it the iPhone Upgrade Programme - the British English spelling - in this country.) This is a new way to get an iPhone, where you get a new model every year. (If you're interested in buying a new iPhone, have a read of our Best cheap iPhone 7 deals UK article, and our iPhone buying guide.)

Instead of buying an iPhone outright, or buying one as part of a deal with phone company. You buy the new iPhone directly from Apple and pay for it in monthly installments. Then, when a new iPhone is released you hand back your old iPhone to Apple and get the new model.

So rather than buying a new model every year, you pay a monthly fee and always have a new iPhone. So is the Apple Upgrade Program a bargain?

What is the iPhone Upgrade Program: Is it worth joining the Apple Upgrade Program?

Whether the Apple Upgrade Program is a bargain depends on your intentions. Here is a little more detail on the way it works.

  1. You give Apple £49 to join the Apple Upgrade Program.
  2. Apple takes the cost of a new iPhone and splits it into 20 equal monthly payments.
  3. You pay Apple 1/20th of the cost of the iPhone every month.
  4. After 11 months you get a new iPhone (and start again from step 2). Or…
  5. You carry on paying the installments until month 20. At which point you keep the iPhone.

Apple Upgrade Program

If your intention is to carry on to Step 5 then it's not actually a bad way to buy an iPhone. Apple states that it's an interest-free loan, but you have to take into account the £49 joining fee.

We used Money Supermarket's Loan Calculator to calculate the comparable cost of a loan, and you'd have to get a loan for £600, spread over 20 months at 9.7 percent, to match Apple's total cost (including the joining fee).

That's not actually a bad rate. It's difficult to get a loan for such a small amount at that rate, and we can see it being an easy way to spread out the payments.

Of course, the real idea is to hand your iPhone back to Apple once a year and get the new model from them.

"With the iPhone Upgrade Programme, you no longer need to wait for your carrier contract to end to change your phone," says Apple. "After 11 payments, you can get a new iPhone and simply start the programme again with your new choice of model, colour or storage capacity."

Is it worth it? After you've paid for the joining fee you will effectively pay half the price of an iPhone every year, but always have the latest model. You won't, however, have an old model to sell. Mind you, the iPhone is typically worth half its price when the new model comes out (CEX will currently give you a £300 voucher for an iPhone 6s 16GB).

You can get a little more for the iPhone by selling it privately, but the Apple Upgrade Program makes the whole process easier.

What is the iPhone Upgrade Program: How to join the iPhone Upgrade Program

You need to do this in store - the programme is only available on the premises at an Apple Store. This may make this an inconvenient option for some buyers.

Apple says you need to bring with you:

  • Date of birth
  • Employment details and UK home addresses from the last three years (for a credit check)
  • Bank account number
  • Sort code
  • Valid photo ID
  • Your current mobile phone

And warns you to back up your data before joining the programme.

What is the iPhone Upgrade Program: What are the down sides of joining the iPhone Upgrade Program?

Aside from the costs - you should carefully consider whether the scheme will actually save you money - and having to go into an Apple Store to set things up, the iPhone Upgrade Program appears (based, we should stress, on anecdotal reports on Twitter) to have hit a few teething troubles processing the financing details. It's possible that you will face delays.

What is the iPhone Upgrade Program: Do I need to take AppleCare?

Apple iPhone 7

Yes, AppleCare is a compulsory component of the Apple Upgrade Program. But it's included in the cost.

AppleCare gives you two free repairs for accidental damage (a £25 charge applies to screen damage) and costs £119 when sold separately.

See also: Is AppleCare worth it?

There's a link on the iPhone Upgrade Program page that appears to offer the option to join the programme without AppleCare - it says: "You can also choose to make low monthly payments without AppleCare+. Learn more about iPhone Payments." But, as a reader points out in the comments below, this is in fact a monthly-payment financing scheme that is similar to the Upgrade Program, splitting the cost of a new iPhone across 20 months, but doesn't include future upgrades.

Apple Upgrade Program (including AppleCare)

  • £49 upfront payment
  • iPhone 7 32GB: £33.45/mo
  • iPhone 7 128GB: £38.45/mo
  • iPhone 7 256GB: £43.45/mo
  • iPhone 7 Plus 32GB: £39.45/mo
  • iPhone 7 Plus 128GB: £44.45/mo
  • iPhone 7 Plus 256GB: £49.45/mo