Deal or No Deal: Volvo XC40 Subscription Service Starts at $600 Per Month

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]