Subscription service comes to Volvo’s cars, but how serious is it?
2017 has been a year for subscription services ranging from razor blades, underwear, bacon and smartphones. Now we’re seeing it expand into upper-end cars with Volvo. While this is an interesting twist and includes insurance as well as maintenance, the monthly price point boxes out those in our Cash-Strapped Consumer and most in the Rise of our Rise & Fall of the Middle Class investing theme as well leaving potential users to our Affordable Luxury theme.
Much like the need for Tesla to bring a mid-tier price point car to market to drive volume and achieve related synergies, the move that will signal how serious Volvo’s subscription efforts are will be if it too moves down to its mid-tier vehicles. Something to watch as the round of annual auto shows commence.
Volvo has a subscription car service, whereby you can get a new vehicle for a flat monthly fee, including insurance, maintenance and service. It’s not the first carmaker to provide this kind of ownership alternative, but it may have the best deal in the business at the moment, with its ‘Care by Volvo’ exclusively for the new XC40 SUV.
The deal works thusly: Pay a monthly fee starting $600 per month, and you get the 2019 XC40, with a range of nice options and upgrades available if you’re willing to pay a bit more.
That subscription price includes everything – vehicle insurance, regular service, and even maintenance fees. You just handle the local taxes, along with any state required registration fees, and you also pay for gas.
Based on my current lease, this sounds like a pretty fantastic deal, given that the trim level you’re getting at $600 per month costs $35,200 to purchase outright, and that’s without taking into consideration any maintenance or insurance and financing fees.
Source: Volvo’s car subscription service sounds like good way to get the new XC40 | TechCrunch
