Apple is today rolling out another new way to buy an iPhone at an Apple Store, a combination of its existing iPhone Upgrade Program and trade-in offers. Right now, on the normal iPhone Upgrade Program, customers can pay about $32 a month for a brand new iPhone 6s on a two-year agreement with an annual trade-in option.
What the ‘Trade Up With Installments’ offers is a reduction of that monthly fee, in exchange for a trade-in of your existing smartphone. For example, you can trade in your current iPhone 6 to get a new iPhone 6s with a 2-year payment plan of $15/mo. What’s interesting is that you can trade in an Android device, not just iPhones — Apple will give up to $300 in trade-in value for Android handsets.
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Exact pricing varies based on the age of the device being traded in and the new phone you are looking to buy. Moving from one iPhone generation to another works out to a monthly price of about $15 for 24 months, but moving from an iPhone 4 to a 128 GB iPhone 6s Plus will result in a $35.37 monthly bill, via USA Today.
You can trade in an iPhone dating back as far back to the iPhone 4. You’ll pay somewhere in the neighborhood of $15 a month for each step up in model, with the interest-free term again lasting for 24 months.
For example, if you step up from an iPhone 4 to an iPhone 5S, you’ll pay $14.58 a month for 24 months. If you move from an iPhone 6 to a 6S, the monthly tab is $14.54. To take the most extreme example, to move from the iPhone 4 to the largest-capacity (128 GB) iPhone 6S Plus, you’ll pay $35.37 a month.
Effectively, the new program is an interest-free loan with credit handled by Citizens Bank. It’s an alternative option to the existing iPhone Upgrade Program and trade-in Apple Store credit opportunities the company offers at its stores. On Apple’s most recent earnings call, Tim Cook said that 60% of the install base prior to iPhone 6 has still yet to upgrade … this new plan seems like a targeted move on incentivizing some of this existing user base to upgrade.
For now, the Trade Up With Installments plan is only available at Apple Retail Stores in the United States. In most cases, buying an iPhone outright is still the cheapest way of buying a new device in the long run, but many iOS customers are unable (or simply do not want) to pay >$650 as a lump sum at once. Hence, Apple and carriers now offer a plethora of interest-free-loan smartphone payment plans just like this one.