Also, it’s not a marketing trick. Time value of money isn’t just some silly irrational psychological problem that marketers exploit. It’s a perfectly rational and useful phenomenon. The entire cost of an iPhone right now “feels like” a lot more than the cost split up into small monthly payments, because it truly is a lot more, by any reasonable theory of value.

I use the count-it-as-a-rental for several items, not often seen as such, like cars and phones. Yet I still own an S3mini, so not exactly a trick to spend much ;)

Edit: oh and I just bought a 20 y.o. car. My way of seeing it is useful in this case because I add the (very high) assurance rate, repairs and gas to get a realistic price. I predicted a reasonable car life and compared it with the numbers for a brand new car.

Intellectually it's actually the most honest way to consider it, because phones don't evaporate in a month. They retain value over years. So what is your real life time cost, and how does it relate to other options, and how does it relate to benefits from the purchase?

But the commenter actually is paying the smaller monthly amount, which probably is easier to afford than paying the entire price upfront. It should sound like a bunch of smaller payments instead of one large payment, because it truly is that.

Yeah it sounds just like how car salesmen try to talk you into buying a car you cannot afford.

It is, but it's also the most accurate way to view your actual costs. You understand it can be both, correct?

In the case of your car, what benefits are there to the more expensive model? My iPhone X, those benefits are easy to describe, better screen, better camera, faster, better form factor. Amortizing to compare the relative cost between it an iPhone 8 and seeing that it's roughly $10 a month allows me to make an informed decision about whether those benefits are worth the cost.

In the case of your car purchase, if the car salesman says it's only $200 a month more to get the "better" car, are it's benefits worth that much to you? Is the more expensive car safer, more comfortable, and are those benefits worth $200 a month? How much do you drive a month? Do you commute in rush hour traffic, or drive on the freeway? etc. etc.

It also hides the opportunity cost. $10/month doesn't sound like much, but $400 could buy something else nice.

But the opportunity cost is also $10 a month for however many months the plan runs. It would be appropriate to think of other monthly payments with the same opportunity cost (like a Netflix subscription), but it would be inappropriate to talk about things that cost $400 up front without also recognizing that you wouldn’t get those things until the end of the payment period.

There is no lost opportunity cost. Apple or the service providers are proving zero interest purchase plans. My iPhone X costs around $42 a month for two years, then I own a phone that is likely still worth about $500.

Whether you see the value or not, there is a robust secondary market whose history shows that there is strong demand for used devices and that their entire value doesn't evaporate in a few years.

And if I'm wrong about 50% depreciation being typical over 2 years, I'm not wrong by much. There is not a huge difference between 70% depreciation and 50% in your monthly cost of ownership. Undamaged 64GB iPhone 6s are selling for between $230 and $310 on eBay, so that's 60-70% depreciation. On average the 6s cost about $20 per month.

The 6S Plus was $750 for the most basic model at launch and now ebays for about $200 which squares with losing about half the value per year which is pretty normal.

Consider also the fact that the battery life will be substantially decreased from new and that most people wont be able to replace it themselves.

Something that is overprice is actually more likely to decline because 2 years from now its just a comparatively slow device that no longer serves as a status symbol.

It is only true because there is a second hand market that trust this is the correct price. Seeing how those devices need to move technically with their time (more powerful hardware), I fail to see the attraction of a device that would be well passed its prime, specially with a battery that isn't replaceable.