04/11/13 My thoughts on the Phase One Investment Protection Policy

Until about 6 days ago, the period of time for the digital back  “investment protection” was 18 months instead of 12.  Just recently Phase One changed this time frame and shortened it by 6 months.  I was surprised to find out that both of the dealer contacts I work with were not aware of this change.  The change of time frame concerned me since I am considering yet another upgrade, this time to the IQ260.  Depending on you interpret the “original purchase price”, I would have qualified  90% of the original purchase price of my IQ160 towards a IQ260.  The real question here is,  what is the purchase price?

When I purchased my upgrade to the IQ160, from my P45+ I traded in my P45+ towards the purchase of the IQ160.  The “purchase price”  of the IQ160 did not change, it was still $36,900  however I was only charged the difference between the list price and the credit for my trade in.  This brought the price to around $22,000 and then I added the value add 5 year warranty  which brought the total to $26,000.  Still my out of pocket expense was $41,000.  I was able to defray some of that via the trade-in.  Note, this is not where I sold my P45+ then took the proceeds and used them towards a new IQ160.  My dealer at the time, Capture Integration, took my P45+, and netted it against my price of the IQ160.  Phase One and or Capture Integration did not discount the list price of the new IQ160 to 26,000.  I still had to give them my P45+.  If I had had to sell the IQ160 the next week, would I have sold it for the netted price? NO I would have sold it for close to the list price.

This is no different than the purchase of new car with the trade-in of a older car.  The car dealer takes the value of vehicle being used as a trade-in off the list price.  It does not make the list price lower, i.e. if you turned around the next day and sold the car you would expect to get close to the original purchase price minus the depreciation of driving it off the lot.  You don’t insure your new car for the value adjusted price, you insure it for the full purchase price, thus protecting the monies you  gave in with the trade in.

So when you first look at Phase One’s Investment protection plan, your first thoughts are, “that’s a great deal”.  Phase One is guaraneeting me 90% of the original purchase price within the first 18 months of my purchase, or  $37,900.  However when you start to dig into the deal, you quickly find out that that’s not the case instead, Phase One would only allow me the 90% of the adjusted purchase price of my trade-in of 22,000.  Not that good of a deal, considering that I would still have to add in the cost of the new value add warranty.   When I insured my IQ160, did I insure it for 22,000? no I insured it for 36,900, which is the purchase price of the digital back.  That is the real purchase price, no matter how the deal is worded.

After doing the math, I took this issue up with Phase One.  I was informed that it really did not matter, since I purchased my IQ160 via an upgrade, thus it did not qualify for the “investment protect policy”.  My answer was, then really only about 15%  or less of all the digital back owners out there really could use this.  Most owners of the current digital backs that could qualify for this investment protection were purchased via a back upgrade, like mine.  The most common example of this was when the new IQ180 was announced and Phase One offered the owners of P65+ cameras up to 65% off the list price no matter how long the back had been in use.   I understand that some photographers may purchase a new back without a trade in, like I did on my first P45+.  However I strongly believe that most owners of IQ160 and IQ180 level backs purchased these through the back upgrade process.

The net of all of this is that the Investment Protection Policy is pretty much marketing fluff.  Enough said.  It’s also interesting that Phase One has chosen to no longer high light this policy on their website, instead it’s buried down in the lower 1/3 of the website in the small print.

I have been a Phase One customer since early 2008 when I purchased my first digital back, a P45+ which has 39 megapixels from Digital Transitions, out of Dallas Texas. Since then I have stayed with Phase One, and upgraded to a IQ160 in late November 2011.  At that time I was able to upgrade from my P45+ to the IQ160, which allowed me to use the “residual value” of my P45+ towards the purchase of the IQ160.  This process is similar to how you can trade in one car towards the purchase of a newer car.  At this time I was not interested in the Phase One Investment protection policy since I had owned the P45+ for almost 2 1/2 years.

Phase One with the announcement of the IQ260, may have created one of the most desirable medium format digital backs since the announcement of the IQ180, however they are not making it that easy for owners of the previous generation, the IQ160 to get there.  I am also curious what Phase One would sell a used IQ160 for, with around 6500 total actuations like mine.