Last year right around this time I bit the bullet and signed up for Apple's iPhone Upgrade Program (in fact I wrote a blog post about it). But back then I was only guessing what my then new iPhone 7 Plus was going to be worth on the used market a year or two years later. But now I know exactly what it's worth, so now the question is was the Upgrade Program a smart move? Here are the numbers:
If I Had Purchased the iPhone Outright:
If a year ago I had just paid cash for my iPhone 7 Plus, here is how much owning that iPhone for a year would have costed me...
Initial Purchase Price: $849.99 plus Apple Care Plus $129 = $978.99
Trade in value as of today:
This is a bit tricky since the money I can get for selling my used iPhone varies quite a bit. On the high end if I were to sell it on Amazon as a used device it would sell for about $700 and after paying Amazon $65 in sales commissions that would leave me $635. On the low end if I were to sell my iPhone to a service like Gazelle I would only get $350. So taking the average value between the two I come up with $492.50.
So if I have purchased my iPhone 7 Plus outright the total cost of 1-year of owning the phone would have been $486.49
Cost of Apple's iPhone Upgrade Program
This one is really easy to calculate, it is simply my monthly payment x 12 months, or $41.58 x 12 = $498.96
Which Was The Better Way To Go?
So since I went with Apple's Upgrade Program it ended up costing me an extra $12.47 over the span of a year compared to the cost if I had just bought the iPhone outright and then sold it on the used market. That is about as close to an even proposition as you can get. Except it is a little more complicated than that. For one thing it takes some time and effort to sell your used iPhone, package it up and get it shipped out. There is also some risk when you sell your used device. You could end up with someone who buys your iPhone that later claims it was damaged or broken and requests a refund, and while Amazon is great for getting the most money out of selling your device Amazon is not seller friendly (they protect the buyer and sometimes the buyer takes advantage of that). There is also no guarantee that your device will sell quickly, which means you have now purchased a new iPhone and you have not yet sold your old iPhone to help pay for the new one. Then what about the condition of your device? My iPhone 7 Plus was dropped once and has a ding in the bottom corner (doesn't effect the screen but it is still a blemish). It also has a couple of very light scratches on the screen. I've carried it around for the past year without a case because that's what I wanted to do. I was able to do that because I knew if it got a ding or a few scratches it wouldn't matter. As long as it was fully functional and didn't have a cracked screen or water damage Apple would allow me to trade it in for a new iPhone. Then there is the convenience factor. With Apple's iPhone Upgrade Program I will pre-order my new iPhone just like everyone else and my new iPhone will be shipped just like everyone else's except for one difference. Before my new iPhone arrives Apple will ship me a postage paid box to return my old iPhone to them in. So when I get my new iPhone in the mail I simply wipe my old phone, put it in the postage paid box Apple sent me and I'm done.
So for me it is still a very easy choice, the iPhone Upgrade Program is the clear winner. Even if I was able to get a couple hundred dollars more for my used iPhone and the Upgrade Program ended up being $200 more expensive, the combination of getting an unlocked iPhone, convenient trade in and not having to worry about keeping the iPhone pristine so I can resell it make the Upgrade Program a great fit for me. However, if you don't travel internationally and you wouldn't normally buy Apple Care and don't mind going through the effort of selling your iPhone then you may want to consider saving a little money and buying your next iPhone outright instead.