Reading through the end-of-lease options, this actually seems like a very buyer-friendly leasing program. There is no additional charge for leasing - the cost to buy out the phone at any point is always just the original purchase price minus any lease payments you've already made. And you don't even have to do anything at the end of the lease, they'll just keep charging you normal monthly payments for up to 6 months after the lease ends.
> At the end of your initial lease term, you can do one of the following:
> Upgrade and return your current device.
> Leave the program and return your current device.
> Buy the device outright with a one-time payment from your Klarna account.
> If you don’t take any of these actions, your lease will be extended month-to-month for up to six months from the end of your initial lease term to decide which option is right for you. During this time, you’ll be charged your monthly payment until you take action. If a trade-in credit was applied to your lease at the time of enrollment, your payments will also increase during this six-month period because the credit is applied only to your initial lease term. If no action is taken at the end of the six-month period, Klarna will charge you the purchase option fee under your lease to buy the device outright, which equals the full price of the device at lease signing less the sum of lease payments you've already made (plus tax).
At a macro level, yet another category where prices will continue to increase and buyer reaction will be subdued by lower installments and longer terms. Like 50 year mortgages and 7 year car loans.
But of course, this is the point.
Although this lease offer does offer lower monthly payments than financing (as you would expect with a lease, since you're only renting rather than buying a phone) if that's more important to you than total cost of ownership. And may be available to customers who wouldn't otherwise qualify for Apple's financing (which requires an Apple credit card, or a carrier agreement). It's also a 0 money factor - the cost to buy out the phone at lease-end is just the purchase price minus the sum of lease payments made - which is pretty generous.
I have no issues with leasing in theory, as long as the customer understands the trade offs. But in practice I think it often results in consumers buying more than they afford, and costing themselves money in the long run.
pudgywalsh•56m ago