PocketProofIf you like having the newest iPhone every year, buying it and trading in last year's phone usually costs less than leasing it through Apple Upgrade. For an iPhone 18 Pro, the 12-month lease is $49.99 a month, or $599.88 a year. Buying it for $1,199 and trading it in a year later for Apple's current $785 value costs about $414 a year. The lease costs about $186 more each year in exchange for convenience: nothing upfront, and nothing to trade in at the end.
That doesn't make leasing a bad deal. It depends almost entirely on one number: what your phone is worth after a year. Here's how both paths work, what each one actually costs an every-year upgrader, and the exact trade-in value where the answer flips.
How does Apple Upgrade work?
Apple Upgrade launched in the U.S. in July 2026. Per Apple's own program page:
- It's a lease, provided by Klarna, with 12- or 24-month terms for iPhone. Applying uses a soft credit check that doesn't affect your credit score.
- The example price for an iPhone 18 Pro 256GB ($1,199) is $49.99/month on a 12-month term. That's the term that gets you a new phone every year. A 24-month term is $34.99/month.
- At the end of the lease, you can upgrade to a new phone, return it and leave, or buy it. The buyout is the original list price plus tax, minus the lease payments you've made.
- AppleCare isn't included. You have 60 days after enrolling to add it. Without it, Klarna charges a one-time damage fee if the phone isn't returned in good working condition.
- Upgrading early means paying the rest of your lease (plus tax) first.
Twelve payments of $49.99 is $599.88, almost exactly half the phone's price, for one year of use. That's the number to beat.
Leasing vs. buying for a new iPhone every year: the difference at a glance
The short version: leasing is renting the phone for a year, and buying is owning it for a year and then selling it back. With a lease, you pay a set monthly amount and hand the phone back. With buying, you pay full price, and the trade-in value you get back a year later decides your real cost.
| Lease every year (Apple Upgrade, 12-month) | Buy every year and trade in | |
|---|---|---|
| What you're paying for | A year of using the phone | The phone, minus what it's worth when you trade it in |
| Who owns it | Not you (unless you pay the buyout) | You, until you trade it in |
| Upfront cash | None, just monthly payments | $1,199 the first year (or about $49.96/mo over 24 months at 0% with Apple Card Monthly Installments). After that, about $414 each year, since the trade-in covers the rest |
| Credit check | Soft check through Klarna (no score impact) | None if you pay cash; the 0% plan needs an Apple Card, which is a credit card application |
| Each September | Return the phone, start a new lease | Buy the new phone, trade in last year's for credit |
| What decides your cost | Nothing, it's fixed | Your phone's trade-in value after a year |
| If it gets damaged | Klarna damage fee at return (AppleCare is extra) | A lower trade-in value (AppleCare is extra) |
| Cost per year | $599.88 | About $414 ($1,199 − $785 trade-in) |
| Cost over 4 years | $2,399.52 | About $1,656 |
Where does the $785 trade-in number come from?
Buying only beats leasing because your old phone is still worth a lot after a year. As of September 9, 2026, Apple was offering up to $785 (per 9to5Mac) for last year's iPhone 17 Pro in excellent condition. That's the value we used for what an iPhone 18 Pro will be worth next September.
It's a reasonable, slightly cautious stand-in. The 17 Pro launched at $1,099, so $785 is about 71% of its price after a year. The same 71% on a $1,199 phone would be around $856, which would make buying look even better. But trade-in values aren't guaranteed. Apple lowered them for older models this September, and "up to" means excellent condition. A scratched or cracked phone gets less.
At what trade-in value does leasing win?
Because the lease costs exactly $599.88 a year, the math has a clean break-even. Buying wins whenever your year-old phone trades in for more than $599.12 ($1,199 − $599.88). That's about half its price. Here's how the yearly cost changes if your trade-in comes in lower than $785:
| Trade-in you get after 1 year | Buy + trade-in cost per year | vs. leasing, per year | vs. leasing, over 4 years |
|---|---|---|---|
| $785 (Apple's current value) | $414 | Buying saves $185.88 | Buying saves $743.52 |
| $700 | $499 | Buying saves $100.88 | Buying saves $403.52 |
| $650 | $549 | Buying saves $50.88 | Buying saves $203.52 |
| $599.12 (break-even) | $599.88 | Same cost | Same cost |
| $550 | $649 | Leasing saves $49.12 | Leasing saves $196.48 |
| $500 | $699 | Leasing saves $99.12 | Leasing saves $396.48 |
So the real question for an every-year upgrader isn't "lease or buy?" It's "will my phone still be in great shape in a year?" If you use a case, rarely drop your phone, and are fine doing a trade-in every September, buying wins. If your phones tend to come out of the year beat up, leasing's fixed price starts to look good.
The calculator: run it for your phone
Defaults are the iPhone 18 Pro numbers above. For another model, enter its price, Apple Upgrade's 12-month monthly price, and the trade-in value Apple lists for the same model from last year.
New iPhone every year: lease or buy?
Compares leasing on a 12-month term with buying each new phone and trading in last year's. Ignores sales tax, AppleCare, and damage fees.
When does leasing make sense for an every-year upgrader?
Even though buying usually costs less, leasing can be the better fit:
- You don't have $1,199 or a 0% way to pay. Buying cheaply means paying upfront, or spreading it over 24 months with Apple Card Monthly Installments at 0% APR (about $49.96 a month). That needs cash or an Apple Card. If neither is realistic, a lease beats carrying a phone on a regular credit card balance, where interest can quickly wipe out buying's advantage.
- You're hard on phones. If last year's phone usually ends the year scratched or cracked, your trade-in may land below the $599.12 break-even, and the lease's fixed cost wins.
- You hate the trade-in process. Returning a leased phone is simpler than wiping, shipping, and hoping the trade-in is approved at full value. That convenience is worth something. At today's numbers, it costs about $186 a year.
- You don't want trade-in risk. If trade-in values drop more than expected, as they did for older models this September, the lease price doesn't change.
If you're open to upgrading less often
This post is about getting a new phone every year, so that's the main comparison. But for reference, here's what happens to the same $1,199 iPhone 18 Pro if you stretch the upgrade cycle. It uses Apple's current trade-in values for 2- and 4-year-old Pro models ($510 and $285) and the 24-month lease price ($34.99/month):
| Strategy | New phone every | 4-year cost |
|---|---|---|
| Lease, 12-month term | 1 year | $2,399.52 |
| Buy, trade in every year | 1 year | $1,656 |
| Lease, 24-month term | 2 years | $1,679.52 |
| Buy, trade in every 2 years | 2 years | $1,378 |
| Buy once, keep 4 years | 4 years | $914 |
At every upgrade cycle, buying and trading in beats leasing on the same schedule. Stretching the cycle saves more, but only if you'd actually be happy with an older phone. For a lot of people, having the newest one is the point, and that's a fine thing to spend on as long as it's a choice, not a default.
What can change the math
- Damage. Trade-in values assume excellent condition, and a leased phone returned damaged gets a fee from Klarna. A case and screen protector protect both strategies. So does AppleCare, if you add it (it's extra either way).
- Selling it yourself. Selling privately often gets more than a trade-in, which makes buying look even better. It just takes more effort.
- Carrier "free phone" deals. Carriers often advertise large trade-in credits (up to $1,200 on some plans, per Apple's store page). These are typically paid as monthly bill credits over an installment plan, which you can lose if you switch carriers or plans early. Read the terms before counting that credit as savings.
- 0% offers that aren't really 0%. Apple Card Monthly Installments are a straight 0% installment plan. Some retailer "0% financing" promos are deferred interest instead, and a small unpaid balance at the deadline can trigger interest on the whole purchase. See the 0% APR trap nobody explains.
Your phone is a subscription now
A lease turns your phone into another monthly charge that never ends, sitting next to your streaming, gym, and cloud storage. If you go that way, add it to your list when you audit your monthly subscriptions, and ask each year whether you'd still sign up for it today.
Quick answers
Is it cheaper to lease or buy an iPhone?
If you upgrade every year, buying and trading in usually wins. For an iPhone 18 Pro, a 12-month lease is $599.88 a year, while buying and trading in after a year costs about $414 at Apple's current trade-in value. Buying stays cheaper as long as your trade-in is more than $599.12.
How does Apple Upgrade work?
It's a Klarna-provided lease with 12- or 24-month terms and a soft credit check. At the end, you upgrade, return it, or buy it for list price plus tax minus payments made. AppleCare isn't included, and returning a damaged phone brings a fee.
When does leasing an iPhone make sense?
When you can't pay upfront or use 0% financing, when your phones end the year too worn for a strong trade-in, or when skipping the trade-in hassle is worth about $186 a year to you.
Engadget ran a useful version of this comparison for annual upgraders here. The same "what does it really cost over time" math applies to your biggest purchases too: see how much car you can actually afford.
