Fancy getting a new iPhone every year? Apple has a scheme whereby you can spread the payments for for your iPhone over 20 months - but also have the option to hand back the iPhone and switch to the next new iPhone when it comes out.

You can already get a 0% APR loan (with Barclays in the UK, or Citizens One in the US) to buy a new iPhone, which is great if you don’t need to find the money to pay the whole lot up front. However, by signing up for Apple’s iPhone Upgrade Program you can go a step further and be eligible to upgrade to a new iPhone once you’ve made 11 monthly payments.

You will have to pay £69 on the day you purchase your new iPhone, and your monthly payments will also include compulsory AppleCare+, plus you will be tied into a contract for 20 months. But you have the option to switch to a new iPhone during that time, it’s 0% interest, so you won’t be paying more than you would if you paid upfront (other than the £69 mentioned above), if you'd rather not upgrade your phone you can just keep paying and eventually own the handset outright.

In the US you can sign up for the iPhone Upgrade Program online or on the Apple Store app, while in the UK Apple only offers the iPhone Upgrade Program exclusively in its Apple Stores - you can't join online as yet (we expect that to change though).

Buying an iPhone this way also means you aren't tied to a particular mobile (or cellular) network. You can go ahead and get the latest iPhone and keep your existing contract, or find a great SIM-only or pay-as-you-go plan.

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?

How the iPhone Upgrade Program works

If you are buying an iPhone online in the US there is an option to choose the iPhone Upgrade Program during the checkout process (although it depends on you being approved for credit by Citizens One). 

In the UK you have to go into an Apple Store to apply for the program, and also be approved for the loan (this time by Barclays).

The price of the handset will be spread out over 20 months, the monthly fee will be combined with the price of AppleCare+. You will also have to pay an upfront fee, at least in the UK. 

If you want to upgrade to a new handset when a new iPhone is launched you will need to give the iPhone you bought with the scheme back to Apple.

The phone needs to be in good condition (this is why AppleCare+ membership is part of the deal).

You will also need to have made a minimum of 11 monthly payments - although you could just settle the remainder of the loan with the bank and sign up for a new contract if you wanted to get your hands on the new iPhone sooner. (You would have the cost of the AppleCare+ cover for the remaining months deducted).

iPhone Upgrade Program: Pros & Cons

Aside from being able to update your iPhone when the next handset comes out, you also get:

  • An unlocked phone (which if you were to continue paying for the full 20 months would eventually be owned by you, and if you chose to sell it privately, you could expect a higher resell price).
  • Not locked to a carrier - so you can switch to another network if you want to.
  • It includes AppleCare+, so you will be covered for two years of hardware repairs, software support, and coverage for up to two incidents of accidental damage. You need to pay £25 excess per screen replacement, and there is a £79 excess on other repairs, but if you are clumsy it could save you a fortune. (And your iPhone will have to be in good condition when you return it to Apple).

However, there are a few negatives:

  • It doesn’t mean you get to jump the queue on launch day
  • If you want to take advantage of the scheme and get a new iPhone after a year, you will have to hand your old phone back - so you will be forfeiting any money you might if you were to sell it privately. (Of course there is no hassle this way).

Which iPhones are included

The iPhone Upgrade Program is only offered for new iPhones, so right now that’s the iPhone XS, iPhone XS Max, and the iPhone XR. (See how to trade in old iPhone)

Per month prices are as follows:

iPhone 64GB 128GB 256GB 512GB
iPhone XS £46.50 / $49.91   £54 / $56.16 £64 / $64.50
iPhone XS Max £51.50 / $54.08   £59 / $60.33 £69 / $68.66
iPhone XR £34 / $37.41 £36.50 / $39.50 £41.50 / $43.66  

What if you want to keep your iPhone or don't want the new handset?

You don’t have to switch to a new iPhone after 12 months. You could keep paying for your iPhone until the end of the loan (20 months). At which point you will own the phone.

You could then sell the phone privately and get a new handset if you wanted to. Or you could take it to an Apple Store and trade it in when you buy a new iPhone.

Read more about how to sell your iPhone here.

How to get the new iPhone using the iPhone Upgrade Program

At the end of the 11 months you can take your old iPhone into an Apple Store along with:

  • Your personal information and bank details.
  • A valid photo ID.

Apple will evaluate your iPhone's condition before approving you for the update. If there is anything wrong you will need to get it fixed (which may or may not be covered by AppleCare+).

If you do have any issues during the year make sure you get them fixed by Apple or an authorized service provider, not an unauthorised third-party. "All repairs to the Financed iPhone must be done at an Apple Store or through an Apple Authorized Service Provider," says Apple.

When you get your new handset you will have to sign up for another iPhone Upgrade Program contract, which could cost more (or less) than it did the year before.

How much does the iPhone Upgrade Program REALLY cost

The loan is 0% APR, so you aren't really paying any more for your handset, but there are a few additional extras that you will have to pay for.

Taking the cheapest option. You can get the iPhone XR (64GB) from £41.45/$37.41 a month. You spread the cost over 20 months, so by the end of that period you’ll have paid £829. The 64GB iPhone XR would cost £749 up front if you bought it outright, so that’s an extra £80, but you are getting Apple Care+ which normally costs £149, so that's a pretty good deal - except that you have already paid the remainder in the £69 upfront payment that you need to cough up to join the scheme.

So, it seems like a good deal. But as we said, there are a few things you are having to pay for that you might not pay for if you had the choice, namely the AppleCare+ insurance. Even if you wanted to buy insurance, you'd be wise to shop around as you might find something cheaper that actually includes loss and theft (if you want your AppleCare+ cover to include loss and theft you need to pay more).

You may also find a deal with a mobile (cellular) network in your country that costs you less. So it’s worth doing some investigating.

And of course, even Apple offers the option to get 0% finance to buy an iPhone outright without having to pay for AppleCare+, so you could do that, and then at the end of the year, you could sell your iPhone or trade it in at Apple. As long as you look after it and it isn't damaged you could save money that way.

Is it worth joining the Apple Upgrade Program?

Whether the Apple Upgrade Program is a bargain depends on your intentions and how they fit in with the way the scheme works.

  1. You pay £69 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 instalments 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. It's an interest-free loan, but you still have to take into account the £69 upfront payment (so you might as well just take the standard finance option that Apple also offers).

Of course the real idea here is to get the next iPhone when it launches, rather than be caught in a two year contract with a network.

"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.

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

How to sign up for the iPhone Upgrade Program

In the US you can sign up for the program online, in an Apple Store, or with the Apple Store app. It’s an option during checkout.

In the UK the programme is (currently) only available on the premises at an Apple Store. This may make this an inconvenient option for some buyers. Apple does have a Join Now button relating to the scheme on the UK site, but it doesn’t appear to work currently.

When you go to an Apple Store to sign up for the iPhone Upgrade Program you will need to bring the following:

  • A valid photo ID.
  • Date of birth
  • Employment details and UK home addresses from the last three years (for a credit check)
  • Bank account number
  • Sort code

Do I have to take AppleCare+

Apple requires that the phone you return at the end of the period is in good condition, so some sort of repair and maintenance system is probably wise. Not that you get a choice - AppleCare+ is part of the iPhone Upgrade Programme.

As we said above, it could be cheaper to look elsewhere for your insurance policy, so you might want to consider that factor in working out whether you will truly be saving money with this scheme.

AppleCare+ for iPhone XS is £199/$199, for iPhone XS Max is £199/$199 and for iPhone XR is £149/$149. You are covered for two years.

That price doesn’t include Theft and Loss (that costs more). If you lost your iPhone you could get a rebate on any money owed for AppleCare+ for the handset - but you would still have to continue to pay for your lost or stolen iPhone. Some alternative insurance policies may cover you for Theft and Loss.

The other problem with AppleCare+ is much of what you are covered for in the first year is also covered by the warranty, so, in theory, if you are handing back the phone after a year, you may never require to use AppleCare…

Will I have a credit check?

You may be wondering if Apple does a Hard or Soft Pull - terms that denote whether they do a full credit check or not.

If you have previously been signed up for the iPhone Upgrade Program it should only be a soft pull. However, if Barclays or Citizen One want to look closer at your credit data then they might do a hard pull. This is what concerns people as it could affect their credit rating. It's also possible that to protect yourself from identity theft you have put a credit freeze on your credit report, in which case you will have to lift this - which might cost you.

Because of this need for a credit check - you are after all taking out a loan - if you are wanting to buy a new iPhone on launch day you may need to pre-order your handset as soon as it becomes available.