Research How does Volvo’s new subscription service compare with traditional leasing?

20:01  01 december  2017
20:01  01 december  2017 Source:   Autoblog

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Volvo debuted its new XC40 compact crossover today, but not to be missed is the simultaneous announcement on its new Care by Volvo subscription service . Care by Volvo offers an alternative to the traditional ways people buy or lease vehicles.

Forget traditional car leasing or PCPs – Volvo is launching a clever new 24-month ‘ subscription service ’ with its 2018 XC40 crossover. Order a new Volvo XC40 online through its Care by Volvo scheme, and you’ll be able to drive the new model for a fixed monthly price without any extra fees

a red car parked on the side of a building© Sven Gustafson

Volvo made waves at the LA Auto Show by launching its new Care by Volvo subscription service, an all-inclusive alternative to conventional leasing that covers insurance, routine maintenance and service for a flat monthly fee starting at $600. It's similar to subscription services already offered by Cadillac and Porsche, though at a significantly lower price than both. And with its nationwide rollout, it's more comprehensive than the pilot program Lincoln plans to launch in parts of California next year.

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Forget the idea of a traditional car leasing plan – at least as far as Volvo is concerned, with the Swedish company launching a clever new 24-month subscription service called ‘Care by Volvo ’. If you order a new XC40 online in Europe, you’ll be able to ‘own’ the model (drive it certainly)

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We spoke to Volvo officials to find out how the subscription program would work, how it differs from standard, conventional auto leasing, and what the advantages and disadvantages are.



How exactly will the subscription service work?

Volvo is using the 2019 XC40, its new compact crossover, as the first vehicle offered under the program, and in two models: the T5 Momentum, which starts at $600 per month, and the T5 R Design, which starts at $700. Customers can go to Volvo's website to make their choice and pick interior and exterior colors. But both models are optioned only one way: the Momentum with Premium and Vision packages, plus a sunroof and 19-inch wheels, and the R Design with those same features plus the Advanced Package, a Harman Kardon sound system and 20-inch wheels. Mileage allowance is 15,000 miles per year.

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New Volvo XC40 – exterior. Swedish automaker Volvo has launched a twist on traditional car leasing , named Care by Volvo . The plan is a 24-month subscription service which aims to make “having a car as transparent, easy and hassle free as having a phone,” the company says.

× Volvo just launched a new subscription service for its cars — but it' s a bad deal for consumers. Volvo is rolling out a new alternative to traditional car buying or leasing , called Care by Volvo .

You enter all your information online and leave a $500 deposit, which goes toward the first month's payment, then pick up the car at either your nearest Volvo dealer or one of your choice when it arrives after several weeks (though the XC40 won't hit the market until next spring). Subscriptions go for 24 months, though customers will have the option of switching cars after 12 months and into a new, 24-month subscription, by which time Volvo anticipates offering more models under the program.

How does this differ from a conventional lease?

Aside from the $500 deposit, there's no down payment. And Care by Volvo, the company says, covers everything — monthly vehicle payment, maintenance (including oil changes) and wear coverage, including tires, brakes, wiper blades, road hazards, 24/7 concierge service and roadside assistance, plus insurance through Liberty Mutual. The policy features $250,000 bodily injury protection per person and $500,000 bodily injury coverage per accident, with a $500 deductible for both comprehensive and collision coverage. Volvo also says the flat rate covers expected damage repairs at the end of a subscription period, though how far that coverage will actually go remains to be seen.

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Today the company unveiled “Care by Volvo ,” a new subscription service for its cars. Volvo hasn’t said how much the service will cost, but it’ s launching it alongside the new XC40 SUV, which will start at ,200. The idea is similar to traditional leasing models, where a customer puts up a down

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How do the costs compare?

For leasing customers, Volvo plans to offer the base XC40 T5 Momentum at $325 per month for 36 months with $3,000 down. (With no money down, that monthly rate climbs to $600 — the same as the subscription fee.) Looked at another way, over the 24-month subscription, you're spending $14,400 on a car that retails starting at $35,200. Compare that with with $14,700 total over 36 months for the conventional lease, including the $3,000 down payment but excluding insurance, maintenance and repairs.

Choosing metallic paint increases the monthly subscription rate slightly.

And with either form of lease, customers are responsible for taxes, titles and registration fees at the dealership.

Can you buy the car at the end of the subscription?

Yes, and it's priced accordingly, with depreciation factored in.

Will the $600 and $700 flat monthly rates go up with inflation, or as more expensive new models are added to the program?

It's certainly possible, but Volvo said it's too soon to know.

What's the verdict?

Ultimately, it will depend on the value you place on services like the 24/7 roadside assistance and covered maintenance, plus not having to worry about things like getting insurance and having that as an extra bill to pay. Volvo CEO Hakan Samuelsson also points out that the subscription program could prove lucrative to customers in urban markets who face high insurance premiums.

Care by Volvo, a new all-inclusive subscription service .
After BOOK by Cadillac and Porsche Passport , Volvo is launching their own vehicle subscription service.&nbsp;The Swedish brand made the announcement this week at the Los Angeles Auto Show, and Volvo Canada also confirmed the service would eventually be offered in our country. However, specific details and pricing have yet to be officialised.

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