What You Should Know About New Lease Program for Apple (AAPL) iPhone 6s and 6s Plus

Apple is following the lead of other phone carriers in offering leasing.

The devices will begin shipping on Friday. With a contract, the iPhone 6s will start at $199 for 16 GB. The iPhone 6s Plus starts at $299 for 16 GB. But for people who want to switch phones and don't have the cash upfront, Apple introduced a leasing option for the first time.

The new "iPhone Upgrade Program" allows customers to pay Apple $32.41 to $44.91 a month, depending on the model, until a new phone is released. That's when you exchange your old device. The monthly payment for the iPhone 6s Plus starts at $36.58 a month. Available only at Apple's retail stores in the U.S., customers can choose a phone carrier and get an unlocked device, with the "opportunity" to get a new iPhone annually and the AppleCare+. That protection program mainly offers up to two years of hardware repairs and coverage for up to two incidents of accidental damage.

Apple is following the trend among carriers in moving away from the standard two-year contract. AT&T Next allows qualified customers to pay the sales tax upfront for their new phones plus a monthly payment; or customers can make a 30 percent down payment for a lower monthly installment. Under AT&T's program, the larger your monthly installment payments, the earlier you get a device upgrade (from one to two years). T-Mobile offers Jump on Demand, which lets you upgrade three times per year, though that may be less appealing because Apple releases new iPhones about once a year.

Mike Gikas, Consumer Reports senior electronics editor, said he's is not convinced by the new program.

"The leasing program may seem like Apple is doing consumers a favor, but it's really an effort to ensure people buy new phones or continue paying more for the old one if they decide to hold on to it," Gikas said.

The better deals are those that separate the purchase of the phone from the service charges, effectively giving you an interest-free loan you can pay off in about two years, he said.

"When you’ve paid off the phone, your monthly bill goes down accordingly," Gikas said. "And there are no termination fees; if you want to leave the carrier, you just pay any remaining balance on the phone."

Consumer columnist Elisabeth Leamy said Apple's program is reminiscent of auto leasing deals.

"It’s a decent deal if you’re one who simply must upgrade to the latest, greatest gadget as soon as it comes out. But if you’re like me and you keep your phones -- and your cars -- for years, then you’re probably better off buying instead of leasing," Leamy said.

Apple’s program seemingly costs customers a minimum of $388.92 a year for the least expensive iPhone 6s model.

"Buying a phone is about $650, so it pays for itself in less than two years and then you get to keep it for free for years beyond that," Leamy said.

Apple said the program is available to "qualified customers only with a valid U.S. personal credit card." The program requires a 24-month installment loan with Citizens Bank and iPhone activation with AT&T, Sprint, T-Mobile or Verizon.

Also of note, the introduction of the new devices lowered the prices of older models. The iPhone 5s will be a free device with a contract, and the iPhone 6 will start at $99.

Apple said it sold 47.5 million iPhones in its third quarter of this year, a record for that period from April through June, the company announced in July.