You have a lot of options when buying an iPhone, including buying directly from Apple, your carrier, or an electronics store. And if you buy a new iPhone every year, the iPhone Upgrade Plan from Apple might have caught your eye.

What does this plan offer, and how does it compare to other methods of buying an iPhone? Let's dive into the iPhone Upgrade Plan to help decide if it's right for you.

What Is the iPhone Upgrade Program?

The iPhone Upgrade Program, available in the US, UK, and China, is a plan that Apple offers as a way to get a new iPhone every year. Instead of buying your iPhone upfront, you pay Apple a monthly fee for the device. After a set amount of payments, you're eligible to trade in your current phone and upgrade to the newest one, restarting the program.

iPhone Upgrade Program

While you're buying an iPhone from Apple, the plan still works with your carrier. The company will connect your phone to your carrier for you, and you're able to switch providers if you wish. You aren't locked into a carrier contract because of the phone.

In addition to the device, the iPhone Upgrade Program includes AppleCare+. If you're not familiar, this is Apple's own "extended warranty" service that covers two service visits (with a deductible) for accidental damage every 12 months. It also includes software support and hardware coverage.

If getting a new iPhone each year sounds interesting to you, let's see what you get with the Upgrade Program.

How Does the iPhone Upgrade Program Work?

You can join the iPhone Upgrade Plan through Apple's website or in-person at an Apple Store. Once you sign up, you'll receive your new phone and agree to pay the cost of it, plus AppleCare+, over 24 months. There's no interest or extra fees, so the cost is the same as buying it outright (you'll pay all taxes at purchase time).

After you've made the equivalent of 12 payments on the device, and have been using the program for at least six months, you're eligible to upgrade to the latest iPhone. At that time, Apple will ship you a new phone, plus a mailer to return your old one (or you can exchange in-store).

If your old device is damaged, you may be charged a fee to fix it. Once you receive the new device, the Upgrade Plan starts over with fresh AppleCare+ coverage and payments.

You don't have to upgrade after 12 payments. If you'd like, you can continue paying 12 more months for your current iPhone. After it's paid off, you own the device and can do whatever you like with it—keep it, trade it in for a new device, or sell it to a friend.

Joining the iPhone Upgrade Program

To get started online, head to the iPhone Upgrade Program page and click Join Now. You'll be asked which iPhone you want; at the time of writing, you can select from the iPhone 13 or iPhone 13 Pro line.

iPhone Upgrade Plan Choose

The checkout page is the same as when buying an iPhone from Apple normally; select your device size, color, and storage options. Choose your carrier and Apple will ship it ready to go on that network. Under the payment options, select Apple iPhone Upgrade Program, then you'll be able to enroll or check your eligibility to upgrade.

Apple iPhone Upgrade Sign Up

You'll then have to enter some information to apply for the loan with Citizens One, the service that Apple uses for the program. This includes your birthday, Social Security number, and annual income for a credit check. You also need a credit or debit card for the payments. To check the fine print, see the iPhone Upgrade Program Terms & Conditions.

How Much Does the iPhone Upgrade Program Cost?

How much you pay in the iPhone Upgrade Program depends on the specific device you choose. You'll see the current prices on the main Upgrade Program page linked above, which are shown in the screenshot below.

These start at $35.33 per month for the 128GB iPhone 13 mini, and go up to $74.91 per month for a 1TB iPhone 13 Pro Max.

iPhone Upgrade Program Pricing

Every iPhone Upgrade Program includes AppleCare+. If you want, you can choose to upgrade to AppleCare+ with Theft and Loss instead. This includes everything in the base plan, plus two replacements in case you lose your device or it's stolen. Upgrading to this plan costs at least $4.16 more per month (depending on your device).

As mentioned, these prices line up exactly with the cost of an iPhone. For example, the 128GB iPhone 13 costs $799, plus $149 for AppleCare+. The total of $948 divided by 24 months is $39.50 per month, matching the cost in the iPhone Upgrade Program (not including tax).

Apple explains that you need to pay "the equivalent of" 12 months' worth of payments before you upgrade to your new phone. This means that if you want to upgrade early (maybe you bought your iPhone in November and want to get a new phone next September), you can pay the rest of the first year's balance to upgrade before the 12 months are up.

Is the iPhone Upgrade Program a Good Deal?

Whether the iPhone Upgrade Program is right for you depends on your needs and desires.

If you never damage your phone and don't want AppleCare+, then the iPhone Upgrade Program is a hard sell. You're spending at least $149 more for the convenience of monthly payments, and if you don't utilize the service, that's money wasted.

You're better off putting that extra money into a fund for your next phone. Just remember that fixing a damaged screen usually costs a lot more than the price of AppleCare+.

If you're looking to save as much money as possible on your iPhone or don't wish to upgrade every year, you'll likely do better staying away from the Upgrade Program. Let's run a quick calculation of two extremes to examine this.

iPhone Upgrade Plan vs. Buying Every Two Years

First, say that you start the iPhone Upgrade Program today with a 128GB iPhone 13 at $39.50 per month. After a year, you'll have paid $474 on that phone, then swap it for the (presumed) iPhone 14, likely at the same cost. So at the end of two years, you'll have paid $948.

However, at this point, you have a phone that's half-paid. So you'll either need to trade it in and start over, or pay 12 more months to own the phone (another $474, for a total of $1,422 at the end of three years, either way).

Instead, say you buy the 128GB iPhone 13 outright, skip AppleCare+ coverage, and keep the phone for two years. Your cost is $799 for those two years. Then at the end of that period, you can trade in your iPhone 13 for credit towards (presumably) an iPhone 15.

As of this writing, the iPhone 11 has an Apple trade-in value of $340. Let's assume in two years, you'll be able to trade in your iPhone 13 and get that same $340 towards your new phone. Subtract the trade-in value from the iPhone 15's assumed cost of $799, and you'll have spent $1,258 at the end of three years.

iPhone 11 Trade In

At that time, you'll have a year-old phone that's yours to do with as you will. Compare that to the iPhone Upgrade Plan scenario, where you spend less after two years but have a phone that's not fully paid off, and end up paying more over three years.

If you're able to sell your older iPhones for more money than Apple's trade-in (maybe to a friend or on Facebook Marketplace), the value of buying a phone every two years increases. Plus, you don't have to do exactly the above. Maybe you keep your phone for three years, or use Apple's iPhone Payments option to pay for the device over 24 months without AppleCare+.

Read more: The Best Sites to Sell Your Phone for Cash

Paying a monthly fee, forever, to own the latest iPhone can be draining. If you can live with not having the newest model, using an older iPhone for a few years will save a lot of money. Devices as far back as 2015's iPhone 6s can run iOS 15 in 2021, so you can use older devices for years.

iPhone Upgrade Program: Convenient, but Not Perfect

Overall, Apple's iPhone Upgrade program is best for people who want a new iPhone every year, don't mind paying a monthly cost forever, and who would buy AppleCare+ anyway. If you don't fulfill all three of those criteria, the Upgrade Program probably isn't right for you.

To save money, you should keep each phone for at least two years, then trade it in or sell it. And don't forget that you don't need to buy your iPhone new, either. There are plenty of places to buy a refurbished or used iPhone that will work great.