Apple Launches Car-Style Leasing for iPhones and Macs

Apple is overhauling how customers pay for its devices, and this time it has a financial partner along for the ride. The company will launch Apple Upgrade on July 28, a leasing program covering most iPhone, Mac, iPad and Apple Watch models, backed by buy-now-pay-later firm Klarna. News of the partnership sent Klarna’s shares climbing as much as 11%.

A True Lease, Not a Path to Ownership

Apple Upgrade marks a departure from the company’s previous financing plans, which let customers make monthly payments toward eventually owning their device. The new program functions more like a car lease. iPhone and Apple Watch terms last 24 months, while Mac and iPad leases run 36 months. When the term ends, customers can pay off the remaining balance, upgrade to a new device, or simply return it. Notably, paying off the lease early or upgrading ahead of schedule can trigger additional fees, and unlike the old financing option, Apple Upgrade does not include AppleCare coverage. A soft credit check is also required to enroll.

Rising Prices May Be Driving the Shift

The timing of the launch lines up with broader cost pressures. Apple recently raised prices on its Mac and iPad lineups because of a memory shortage, and industry watchers expect another price increase for iPhones as soon as September. Rather than build and manage its own leasing operation, an effort it abandoned in 2024, Apple is instead outsourcing that financial risk to Klarna. The arrangement lets Apple offer more flexible, lower-upfront-cost options to shoppers without carrying the burden of loan defaults or depreciation itself, while Klarna gains a high-profile foothold in consumer electronics financing.