By on November 30, 2017

Volvo Cars is rolling out a subscription service that allows access to vehicles for a monthly fee. It’s a growing trend among luxury brands. Book by Cadillac is the first service to spring to mind but brands like Porsche and Ford have introduced regional pilot programs offering roughly the same thing. Volvo’s subscription service is not a trial run, however. It’s the full enchilada.

For $600 a month, Care by Volvo is offering access to its new XC40 — the new compact SUV that just started production in Belgium this month. Here’s how it works: Volvo customers choose a car online and make a monthly payment that covers insurance, service, and maintenance. The subscription last 24 months but, during that time, customers will be given the opportunity to change cars and sign up for a new 24-month subscription as early as a year into the existing agreement.

It’s an interesting alternative to leasing and a lot of outlets have praised the service for being so affordable, especially compared to Cadillac’s monthly subscription fee of $1,500. But the services aren’t directly comparable. Fist of all, General Motors allows customers to swap vehicles month to month. Secondly, those models are valeted to you and could have an MSRP in excess of $86,000. 

Meanwhile, Volvo’s XC40 starts around $33,200. However, the subscription-service model is the T5 AWD Momentum trim that comes with 2.0-liter turbo engine, 19-inch black diamond-cut wheels, heated front seats, heated steering wheel, and a panoramic roof. That unit costs two-grand more out the door than the base XC40.

Customers can also pay a $700 monthly fee and upgrade to the T5 R-Design, which comes with everything that the standard model has — plus a Harmon Kardon audio system, different color scheme, and larger wheels.

However, the million-dollar question is if this subscription service is really worth it. While Forbes seemed keen on the pricing strategy, we’re of the mind that it being a bargain is highly circumstantial. It’s not much different than what it would cost to purchase an XC40 using a 60-month loan and some pretty average financing. That said, if you’ve got horrendous credit and are likely to be slammed with high interest rates, then $600 a month might not be such a bad deal.

Of course, if you’re buying you have to insure the car yourself but you also get to sell it once you’ve paid it off. Although, if you’re interested in a subscription service in the first place, you’re probably more apt to lease than buy — and leasing is where Care by Volvo runs into the most trouble.

You can lease a similarly priced Volvo for significantly less than $600 per month and the same is true of far more expensive models. The dealership nearest to me is currently offering the 2018 Volvo S90 T5 Momentum for $419 a month. Again, you have to pay for insurance but you’ll likely be saving a bundle in the long run — and that’s on a vehicle that starts $10,000 higher than the XC40.

I’m just not sure about these subscription services, especially when they don’t offer a bundle of interesting perks. Lynk & Co, which is using the XC40’s Compact Modular Architecture on its 01 SUV, also pitched a subscription-based sales model that would involve phone-controlled ride sharing services and gobs of in-car connectivity — something Care by Volvo lacks. Perhaps the company is just banking on the ease of having all of your auto bills coming from one source as a selling point. But the fact remains there are cheaper routes to take if you’re willing to.

[Image: Volvo Cars]

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51 Comments on “Deal or No Deal: Volvo XC40 Subscription Service Starts at $600 Per Month...”


  • avatar

    “That said, if you’ve got horrendous credit and are likely to be slammed with high interest rates”

    Then you don’t have the sort of cash around to spend $600 on a car payment!
    Unless maybe you’re into some illegal activities or cash business things.
    In which case you don’t want a tiny Volvo.

  • avatar
    Jean-Pierre Sarti

    it always feels like these schemes are cooked up in some NYC office where perception and reality of people and their cars are at their most divergent

  • avatar
    SD 328I

    Not sure about this one. Ford’s subscription service is about $550 or so depending on the vehicle, it includes full coverage insurance and covers all maintenance and can change cars month to month.

    Other than paying for the gas, it’s pretty much all included. Plus being able to switch from a Mustang, Fusion and SUV on any given month is pretty cool.

    • 0 avatar
      S2k Chris

      Exactly, a subscription that allows swapping vehicles is pretty cool, but otherwise it’s just a lease with embedded insurance and prepaid maintenance. I don’t do leases, but I can’t imagine service of a new car in the first 24 months is going to run more than say, $500 total ($20/mo) and my insurance for a similar car (Acura RDX) runs around $50/mo. So it’s basically a $530 lease. Not a great deal, though you are buying additional flexibility, I guess.

    • 0 avatar
      Vulpine

      Now that kind of subscription service would intrigue me. But $550 is still too expensive for my blood UNLESS it included all services (including insurance) AND… it wasn’t a Ford.

  • avatar
    jalop1991

    DISRUPT! DISRUPT!

  • avatar
    CincyDavid

    I figure insurance for me is about $100 a month, and maintenance should involve one oil change a year and a set of wiper blades, so that’s inconsequential. I see an XC40 as a $329 lease special, so the numbers don’t compute for me. Is there a mileage limit on the subscription service? If not, that may be the only way this makes sense…if you drive too much for a traditional low mileage lease to work.

    • 0 avatar

      I think anything like this is going to be firmly in the “luxury fun money” category, so will never make sense financially.

      • 0 avatar
        S2k Chris

        “I think anything like this is going to be firmly in the “luxury fun money” category, so will never make sense financially.”

        Sure. But what about a low-end Volvo SUV deserves the “luxury fun money” attention? $2-3k/mo for the (nearly) all-access Porsche pass, I get that. But what is it about a $35k Volvo SUV that makes me want to pay a premium over leasing it to not pay insurance? The more I think about this deal the worse it gets.

    • 0 avatar
      dal20402

      15k miles a year, so higher than a low-mileage lease but not super high.

  • avatar
    Vulpine

    No deal. First off, too expensive. Second off, I just don’t like their later-model cars. Now, that 4×4 military GP I drove in Norway back in ’77…

  • avatar
    dal20402

    Yeah, this would be a lot more interesting if it included vehicle switching. Volvo doesn’t have the right lineup, but I might well be induced to subscribe to something like an Audi S3 if I could easily and cheaply swap it for a Q7 for a couple of weeks (or even a month) when my family goes on vacation.

    • 0 avatar
      Nick_515

      I don’t think Audi would do $600, but perhaps $800? It depends on where they draw the line (exclude S cars, or include S cars but not RS cars, etc). I could never do 12k miles a year, but I can squeeze into 15k. I walk to work, but I still manage to put 20k a year on our car. Single car household, and we both really love hopping on a car and going for drives every weekend.

  • avatar
    tylermattikow

    Really depends on the insurance cost where you live. In New York city insurance is crazy expensive. $3000-4000 a year is not unusual.

  • avatar
    PrincipalDan

    How about $400 a month with insurance included?

    Seems about right to me. ;-)

    • 0 avatar
      CincyDavid

      At $400 I’d be all over that. I’d even spring for my own wiper blades and oil change so I wouldn’t have to go to West Chester to get to the dealer.

      • 0 avatar
        TonyJZX

        my thinking would be that as a manufacturer you have the ability to get better finance, repair and insurance rates than individuals so that even making a handsome profit at every step they should be able to beat any kind of deal an individual could himself obtain…

        • 0 avatar
          JohnTaurus

          ^this goes hand-in-hand with my theoretical buisness below.

          I think as a company, I would get better rates on insurance and having all maintenance and repairs done in-house would save quite a bit there. For someone who doesn’t give a crap about owning a car, but yet they NEED a car, I’d be ready and able to fill that need.

  • avatar
    Stumpaster

    “2018 Volvo S90 T5 Momentum for $419 a month”

    Yeah right! How about reading the fine print about the upfront and end of lease payments, and taxes? That usually make that $419 quickly turn into $600. Or is your rich uncle usually paying for those other incidental fees?

    • 0 avatar
      FreedMike

      Yep. In this case, $3500 cap cost reduction, and I have no idea why anyone would do that on a lease.

      If I’m putting $3500 of my liquid funds into a car, and only want to spend $435 a month, it’s a buy, not a lease, and it’s something a LOT cheaper…an Accord Sport would probably fit right into those parameters.

  • avatar
    CincyDavid

    My local store is advertising an XC60 for $389 with 1st payment and $3000 cash down…if you finagle that $3000 will be waived and keep in mind that’s the next size UP from the XC40, so I really think $329ish would be about right in my local market.

    I have never had to put anything down on a leased car, and if the store wants to lease it badly enough they’ll work with you.

  • avatar
    DearS

    If a new $20,000 Honda Civic were offered at ~$350/month I’d be down for this.

    $60/m maintenance,
    $140/m depreciation
    $60/m taxes
    $100/m insurance

    Civic costs 57% as much as XC30. 57% of $600 = ~$342/month

    • 0 avatar
      S2k Chris

      Guessing the insurance profiles for $20k Civics and $35k Volvo’s are pretty different.

    • 0 avatar
      FreedMike

      You can lease a base Civic for under +/- $200 a month with zero out out of pocket, so I don’t see the point, unless you just want to be able to pop from one base Civic to another over the term of the deal.

      The only upside would be if there was no mileage restriction on the “subscription”…and you have to think there would be. Otherwise you’d get a bunch of over-the-road salesman types putting 50,000 miles on their car and tossing it back for a new one a year later. I can’t see that being a winning proposition for the company offering the “subscription.”

  • avatar
    Corollaman

    I’m surprised an escort service has not come up with a similar plan.

  • avatar
    JohnTaurus

    I had thought about a buisness doing this with used cars, on a weekly basis.

    Say, from $50-$250/week, insurance and maintenance included, unlimited mileage, vehicle swapping allowed (of course the weekly fee could change, lol so no, you’re not upgrading to an Expedition while still paying the same as for a Cruze), all you do is put gas in it and drive.

    I figured I would set it up to directly withdraw the weekly fee through the customers bank card (with credit capability so I can still deduct the fee even if there are insufficient funds). Return it by Sunday at 11:59 p.m. to not be charged for the next week. After midnight, the next week’s fee is automatically deducted.

    What car it is would depend on what you want to pay. For $50/week, hello Suzuki Forenza! Lol, no, I’d pick cars that won’t cost more to keep running than I would make by leasing them out.

    If I kept the car very well maintained and in top condition, and didn’t pick terrible cars to begin with (like Suzuki Daewoos), I think they would serve well and make me money.

    I had initially thought of doing it, as many already do, for rideshare drivers. Then I thought, well, why not also have cars that don’t qualify for use as a rideshare whore for people who just want a car to drive? For someone who just needs a way to get to work/etc, and doesn’t care much about how it happens, so long as it isn’t expensive and it doesn’t leave them stranded. Credit check wouldn’t be required so long as you have a valid debit card with a Visa (or similar) logo that matches the name on your license (or is set up in advance, like if a family member or friend is willing to help you out).

    Roadside assistance would be standard, so if the car does break down on you, we will simply dispatch a flatbed with a replacement car on the back. The replacement car comes off the truck, put your stuff in it, and off you go. The tow truck, of course, then collects the broken car to be hauled back to be repaired or retired, depending on the car/issue/etc.

    I would have to put GPS trackers (maybe even a disable device) in the car so as to protect myself from being ripped off. Think you can rent a 300C for $250/week, then close your bank account and have a free car? I’d at least have some recourse if you tried that. I can possibly prevent the car from being restarted the next time you turn it off, then find and repo it. I’d rather not do such, but I’d be a fool to not protect myself in some way.

    This could work in all sorts of situations. Your car unexpectedly dies and its not a good time, financially, to repair or replace it? Rent an Accent for a week or two for less than what a typical rental company will charge you for a couple of days. Sure, it might have 129k on it and be a few years older, but it’ll be clean, its guaranteed to be reliable or it’ll be replaced with no questions asked, and you don’t even have to worry about insurance or anything but putting gas in it.

    Want to take the whole family out to visit the grandparents a couple of states away? Rent a Yukon XL and keep it for as long as you like, again, far cheaper than renting one from Hertz or Enterprise, even if its a 2008 instead of a 2018.

    I believe there is a market for this service. Those desiring to impress their neighbors would be better advised to use one of the programs from Volvo, Ford, Cadillac, etc so they can get new cars instead. I think my alternative is more practical for those who don’t put bragging rights as high on their priority list.

    I believe a well-maintained fleet of vehicles would make money for years. As it gets older, the weekly fee comes down, or its cycled out of the program. If it starts to become consistently problematic, its retired and sold as-is on the cheap. I don’t think people would mind driving an older car, if it was clean, reliable, presentable and most of all, cheap.

    • 0 avatar
      dal20402

      I think you would need a pretty big used car franchise to pull this service off — you would need to be Carmax or at least a big local dealership chain — but I could see it as being very lucrative for someone with that kind of franchise.

      And I would totally be a customer. Daily driver alternating between Mustang and GTI? Check. Lincoln MKT for summer trips? Check. F-150 for months when I’m going to try to pull off a major house project? Check.

      • 0 avatar
        JohnTaurus

        Yes, it would go hand-in-hand with a traditional dealership. Select cars would have their weekly lease price and their purchase price listed.

        So, your “just get me to work” 2013 subcompact sedan is $75/week or $3400 to buy.

        If I kept that theoretical car on the road more often than not, it would pay me about as much as if I had outright sold it, every year. Yes, of course, it would need oil changes, tires, brakes, etc. But, you see my point. I think there is potential there.

        • 0 avatar
          Nick_515

          So is this like a longer-term rental business?

          • 0 avatar
            JohnTaurus

            Pretty much, also using older cars at a reduced rate.

            Here is an example of a car I’d offer at the lower rate ($50-75/week): https://charlotte.craigslist.org/cto/d/2011-mazda-2-4dr-hatchback/6403883636.html

            $100/week: https://dallas.craigslist.org/mdf/cto/d/2005-kia-sorento-manual/6395808113.html

            Keep in mind, the car would be very well looked after (those cars would be reconditioned with new headlamps, etc), come with roadside assistance, maintenance and insurance all included. Just put gas in and drive.

  • avatar
    stevelovescars

    Does the cost vary depending on where the car is registered due to insurance pricing? If not, then this could be a bit more appealing to shoppers in areas with higher insurance costs like large cities or Michigan. Also, is there a down payment required in this program? If so, it sounds like an even worse deal.

    I don’t really see Volvo’s as having higher than normal insurance ratings, so the included insurance likely isn’t much of a savings for most people.

    • 0 avatar
      PenguinBoy

      I can see the included insurance making this a good deal for someone with a sketchy driving record. Given that insurance rates vary widely, I would expect there’s some sort of provision for this.

      • 0 avatar
        stevelovescars

        Right, someone with a crap driving record might be a problem. I was more wondering if the policy somehow ignores regional differences in insurance cost. Else, the qualification process and pricing could get pretty complicated.

        This really just doesn’t seem like a great deal. It’s more than I pay on my two year lease for my Alfa Giulia, including insurance, and that car has an MSRP more than $10k higher than this Volvo AND I live in Michigan where we have about the highest insurance rates in the country. My 1st year of maintenance is included with the car’s warranty as well.

  • avatar
    thegamper

    Not an outright horrible deal. I think the bottom line is are you a 15k lease customer, what would a regular 15k leas on this car go for and how much do you pay in insurance per month.

    Lets not forget taxes. Closer to a possible good deal if it was out the door. This offer is only going to be available to top tier credit, lowest auto insurance risk pool folks. I’m guessing any way you look at it, the deal is within $50 of what you could do on your own in terms of the cost.

    Personally, the only scheduled maintenance im doing on a lease vehicle is oil and rotating tires. So not sure how much that is actually worth to most consumers.

  • avatar
    7402

    The idea of included insurance doesn’t work for people with assets to protect. The insurance probably is geared to protect the manufacturer and their leasing entity rather than the customer. Perhaps, as with ZipCar, you only get the minimum insurance required in your jurisdiction — not enough to save you if you are at fault in a very expensive collision with huge, court-determined medical payouts or something like that. A good umbrella policy is what you need here, but make very sure it applies when you are driving a subscription car before signing anything.

    One can buy transportation for much less than $600 a month; if you use ZipCars more than 10 times a month, you can make the payment on a basic car.

    Volvo is doing a nice job with their current line up, and I’m hoping they get back the mojo they lost when Ford bought them. Still, though I might consider buying one I sure wouldn’t buy a subscription.

    The real marketing trick here is selling the idea of cars as ephemeral objects for temporary use, more like renting a movie online than having a piece of furniture or long-term appliance that has enduring value in everyday use.

  • avatar
    FreedMike

    Here’s the big question, Matt…is there a mileage restriction on this subscription service? If not, then this looks like a better deal for certain types of drivers.

  • avatar
    CincyDavid

    These electronics-laden new cars are becoming disposable, just like iphones. I have given up on trying to drive older cars…I just do 3 year leases and walk away from the car while it’s still under warranty.

    I hate the idea of anything becoming throwaway, especially something like an automobile but that’s the direction the whole market is going.

    How my wife got conned into new iphone X’s for the kids for Christmas is a mystery to me, but she wants to mollycoddle them. Thankfully she can live with keeping a car for 3 years and doesn’t demand the latest and greatest vehicle all the time.

    • 0 avatar
      jkross22

      Ugh, 1k for phones. Can’t you return them within 7 days for a refund?

      Just don’t drop that phone. It’s over $500 to repair screen damage, as it’s glass front and back.

      • 0 avatar

        I am aghast at the cost of that new iPhone. It shows A) the state of our consumerism, B) the fetish for an Apple logo, and C) that people are easily taken in.

        • 0 avatar
          CincyDavid

          The sad thing is that our cellular coverage in the house is iffy on the iphones…while my Samsung Galaxy 8 has 5 bars. T-Mobile even put in a router/signal booster in the house to placate us.

          I’m old enough that I could give a hoot as long as the dumb thing works, the college-age kids just can’t live without the newest and best.

          And don’t get me started on the craptastic Apple chargers and cords…I buy replacements 4 at a time and keep a stash because the kids constantly kill theirs and steal my wife’s.

  • avatar
    jkross22

    Convenience fees. That’s what this program is all about. Convenience. It’s the Ticketmaster of the car world.

    If you don’t want to bother with anything, this is the program for you. Including bothering to see if this deal makes any financial sense.

  • avatar
    Asdf

    There is some sense in what Volvo is doing here, because who in their right mind would want to BUY a Chinese car?

    But the only appeal Chinese crap has is that it’s cheap, and $600 a month isn’t cheap, so Volvo had better lower its asking price to something more palatable. How about $50/month?


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