Volvo is to offer a car subscription service, starting with the XC40, due to "changing habits of the public"
Rachel Burgess
21 September 2017

Volvo’s new car subscription service will account for a fifth of its volume in five years’ time, boss Håkan Samuelsson has said.

Volvo has launched this model of car ownership in response to the changing habits of the public, in which subscription services, for example for mobile phones and TV streaming, are increasingly popular.

Volvo XC40 revealed 

Called Care for Volvo and launching on the new XC40 compact SUV, the subscription service includes insurance, taxes, maintenance and roadside assistance. 

It also includes wi-fi access and a concierge service. Over time, more services will be added. For example, Samuelsson said that next year, food shopping will be able to be delivered to the car.

Comment: Volvo leads the way, for now 

In the UK, the subscription costs £629 per month for the XC40 models available from launch, but will extend to other models over time. There is no deposit to pay and the fee is not affected by the buyer's age or location.

Care by Volvo also allows customers to share their car with up to three friends or family members with a new digital key technology. However, this is not yet available in the UK due to a lack of appropriate insurance policies. It is expected to launch next year.

When asked whether he could envisage a time when cars would only be available on subscription, Samuelsson said there would be “a long period where both [traditional sales and subscription] will work” but that it would very much depend on customer demand.

The service will not be profitable for Volvo in the beginning. “We’ve priced this attractively for the market and then we will work on costs so to make it profitable [in future],” Samuelsson said.

Care by Volvo is also a tentative stop towards a car sharing programme for Volvo. While this service only allows a handful of designated people to share a car through an app, the technology could be used more broadly. Volvo digital boss Atif Rafiq said: “You can imagine lending to a stranger. We need to develop the network, for example, by having a car fleet that we own."

He added: “If you’re a car company and you’re not thinking about car sharing, there’s a problem."

Volvo's forthcoming sister brand, Lynk&Co, is set to launch next year with a similar purchasing system.

Senior vice president Alain Visser said earlier this year: “Our aim is to enrich and simplify ownership by redefining how cars are bought, owned, connected, serviced and used."

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Comment: Volvo leads the way, for now 

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Comments
9

21 September 2017

£629!!!  For an XC40?  You can get a XC60 for half that on lease!  For that £7,500 you could get a decent used car...every year!

21 September 2017

.

Citroëniste.

21 September 2017

Fools and their money are easily parted.

22 September 2017

Struggling to understand the difference between a full maintenance ease and a subscription. It appears to be just the insurance bit. But as insurance ranges so wildly for younger drivers, is the subscription so expensive because everyone is subsidising young or poor drivers (not necessarily the same thing)?

Spanner

22 September 2017

As others have said the price is incredible. Who has / wants to burn £700 a month on a small SUV or frankly most cars. Sure enthusiasts will be willing to pay big sums for performance cars but personally I never spend my full budget on a car there are so many more things to spend my hard earned on than a slightly better but more expensive car. The Volvo isn't with that kind of money

22 September 2017

The old 'let's put everything in one easy to manage subscription as if we're doing the customer a favour' routine. They're doing you a favour alright! Volvo are clearly taking advantage of the people who just can't be bothered to shop around for a better deal, and with all the comparison sites around these days it's pretty frightening to think people are just so lazy and blaze when it comes to saving, or in this case not saving, money.

22 September 2017

I can (and do) lease a £35,000 car for £306 a month (with maintenance, and roadside assistance & recovery), and my insurance is £21 a month. Total £327 a month. Why on earth would I want a Volvo (or anything) for £629 a month?  I think Atif Rafiq needs to speak to a professional.  Do Volvo really think people will fall for this 'scam'?  I keep re-reading the article to see if I read it wrong!

22 September 2017

No sure people are clocking the 'no deposit' aspect of this arrangement.

Once you add the deposit and, in the case of a PCP, the Final Payment into your monthly outgoings and spead it across the lifetime of the agreement together with the other elements (servicing, insurance, etc.), it doesn't seem quite so unreasonable, does it?

It's just another way of slicing the cake, sold (to begin with) at a slight premium cos it's shiny & new, has extra 'added value' premium features and has yet to be fully tested for profitability.

Increasingly, consumers don't want to have to bother with all the individual strands of car ownership - if they're honest with what they're prepared to pay, bundling it all into one 'fire & forget' monthly payment makes perfect sense. Add the ability to access different vehicles on occasion, and the much-vaunted 'concierge service', and it begins to make sense. 

22 September 2017

My downpayment was £918 and there's nothing to pay at the end, I just hand the keys in.  As I said, all maintenance is also included in my lease, even tyre punctures!  So...

3 years of owning my car - including downpayment, all leasing payment, and insurance £12,378

3 years of owning a Volvo on this scam £22,644

£10,000 more!  Er, no thanks, it doesn't begin to make any sense at all.

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