Comment by Grombobulous
1 day ago
That's exactly what I mean.
If you're the person who has leased this phone, you make all your payments and get to the end and your bill to keep the phone forever is going to seem kind of high.
Obviously, that's logical. In your lease, you have only paid the price of depreciation.
Just like with cars leasing is the most expensive way to own them, but I guess there's a certain buyer who doesn't want old stuff.
You all really do not understand. Many people will gladly pay the $433 at the end because they’ve been able to get a new job and make more money in the interim.
I think that a big chunk of those lessees will be deciding between coming up with $433 in cash or give the phone back and continue with the same payment and they’ll choose the latter.
But then again maybe the person doing the lease knows this already and just wants a new phone frequently.
My worry is that a lot of people will see a lower payment and not realize that they’re getting the phone at the end of the term.
Except in this case you're not paying any extra. In fact it's cheaper to lease and then own an iPhone with this program because of the time value of money.
It's an interest free loan for 2/3 of the price.
It’s not cheaper compared to the alternative of keeping the phone beyond the lease period.
Yes it is, because of the way they have structured the program. This is not like a car lease.
With a car lease, the total of payments plus residual is more than the cash purchase price. That is how the financing company makes money. But in the case of Apple, the total of the lease payments plus the residual is exactly equal to the cash price.
Apple is eating the loss on the financing, for some reason. Probably what is happening is their lease provider is being given a discount on the price, so they keep the difference. Apple probably believes they will sell more phones this way.
But this is great for you the buyer, because it means instead of spending your cash now, you spend it over three years. And since the money has less buying power after three years because of inflation, it's technically cheaper for you to spread out the payments.
Especially if you put the rest of the money in the bank and earn interest on it!