$600-a-month Volvo subscription...don't knock it til you read the details

[Kaido]

https://www.slashgear.com/care-by-volvo-priced-for-2019-xc40-car-subscriptions-29509870/

Includes:

* 2019 Volvo XC40
* 24-month subscription (after 12 months, you can change cars & renew for another 24-month period)
* No down payment (base price is $600/mo)
* Care by Volvo (24/7 customer care, concierge services, and roadside assistance)
* 15,000 miles annual allowance
* Tire & wheel damage protection
* All factory-schedule maintenance is included
* Wear & tear replacements (ex. wipers & brakes) are included
* Includes Liberty Mutual insurance policy

So you basically just pay the subscription fee + gas. The insurance policy includes:

* $250k bodily injury protection (per person)
* $500k bodily injury coverage (per accident) with $500 deductible
* Comprehensive & collision coverage

They are starting out with a base price of $600 with two available trims:

* T5 AWD Momentum with Premium Package
* XC40 T5 AWD R-Design with Premium Package; base price is $600/mo)

"Both have the Vision Package, heated front seats and steering wheel, and the panoramic roof. The Momentum also gets 19-inch black diamond cut wheels, while the R-Design adds the Harman Kardon sound system and 20-inch 5-double spoke matte diamond cut wheels."

So you're looking at $7,200 annually, or $14.4k for a 2-year subscription, or about half the value of the vehicle in question. It's basically just a rebranded short-term lease. Brakes aren't really going to be an issue to replace on a 2-year-old car with under 30k allowed miles on it, and I'd imagine that insurance for most people would be around $100 a month anyway, so you're looking at ~$500/mo for a short-term lease with no down payment & some extra perks like free oil changes.

Very interesting model. I like the idea, the price not so much, but I can see it being really popular for people who can fit that into their budget. I've heard that Tesla wants to do the same once their full automation suite is ready...bundle the car with insurance & maintenance & whatnot as a package deal. Neat idea!

 

[heymrdj]

I’m super interested in this setup. The 700$ RSpec seems to be a nice package design. I still have 2 years on my Silverado lease so I’ll be watching. It’d be nice if they made the XC60 available as well.


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[NutBucket]

That's not a bad deal. Considering the payment on our Forester is about about $420 and car insurance runs about $200 a month for both cars, this is actually not a bad deal.

 

[Kaido]

That's not a bad deal. Considering the payment on our Forester is about about $420 and car insurance runs about $200 a month for both cars, this is actually not a bad deal.

Yeah, once you do the math, if you're in the market for a new car, upgrading every year or two is actually pretty awesome. Just like a cell phone! (or like they were, at least, before they dumped the contract pricing, d'oh!)

 

[Pulsar]

Yeah, once you do the math, if you're in the market for a new car, upgrading every year or two is actually pretty awesome. Just like a cell phone! (or like they were, at least, before they dumped the contract pricing, d'oh!)

Yeah.... but you'll be paying $600 a month for the rest of your life, never building equity. Just the way the companies want it. Leases are a car company's wet dream.

There's a reason everyone is going subscription. From your Computer office suite to your cable contract to your cell phone to your car...... they love the idea of you being in debt the rest of your life and never owning anything.

 

[sandorski]

Make sure there are no strings attached to the early replacement.

 

[Aharami]

I'd be interested if they offered the V90 under this model. Although that would probably be more money

 

[Yuriman]

Yeah.... but you'll be paying $600 a month for the rest of your life, never building equity. Just the way the companies want it. Leases are a car company's wet dream.

There's a reason everyone is going subscription. From your Computer office suite to your cable contract to your cell phone to your car...... they love the idea of you being in debt the rest of your life and never owning anything.

While I largely agree with this sentiment, vehicles are something which only depreciate. Own them long enough and they're worth nothing, even if you take care of them. They're purchases, not investments. At the right price, a subscription model could actually be a decent choice, unlike home ownership.

I can't wait for autonomous, electric taxis to bring down further. I'll probably dump my car, free up the driveway space and need for insurance/registration and the infrequent but annoying DMV trips.

 

[tsupersonic]

Interesting model. I know insurance varies based on so many variables, so it'd be interesting to see if they can offer the same price to everyone in the US. My guess is no, since it says "pricing starts at $600"

 

[mindless1]

While I largely agree with this sentiment, vehicles are something which only depreciate. Own them long enough and they're worth nothing, even if you take care of them. They're purchases, not investments.

Except that if you own it long enough to be worth nothing then you've saved around $30K over this subscription model, IF you do you own repairs most of the time so that cost doesn't eat into the savings much. I'd call a decision now that saves $30K later an investment.

Downside is you don't get to drive a new vehicle every couple years.

 

[Herr Kutz]

Is that insurance for a person of any age, marital status, gender, driving record, and garage location in the country? Or is this more if a "starts at $600" type of thing?

 

[fleshconsumed]

So you're looking at $7,200 annually, or $14.4k for a 2-year subscription, or about half the value of the vehicle in question. It's basically just a rebranded short-term lease. Brakes aren't really going to be an issue to replace on a 2-year-old car with under 30k allowed miles on it, and I'd imagine that insurance for most people would be around $100 a month anyway, so you're looking at ~$500/mo for a short-term lease with no down payment & some extra perks like free oil changes.

I think XC40 starts with 35K so technically I think it'll take 5 years worth of payments before you pay the price of the car. 6 years if you include insurance and misc maintenance when buying outright. Still a raw deal as 6 year old XC40 that you own will be worth at least $10-15K. I suppose this is a good deal for someone who likes to get a new car every 2-3 years. For the financially responsible folks who want a Volvo and don't mind driving a 6 year old car they're better off buying.

 

[thecoolnessrune]

I think XC40 starts with 35K so technically I think it'll take 5 years worth of payments before you pay the price of the car. 6 years if you include insurance and misc maintenance when buying outright. Still a raw deal as 6 year old XC40 that you own will be worth at least $10-15K. I suppose this is a good deal for someone who likes to get a new car every 2-3 years. For the financially responsible folks who want a Volvo and don't mind driving a 6 year old car they're better off buying.

If you're "financially responsible" under the arbitrary terms you're presenting you won't buy a Volvo. You won't buy a new car. You might buy an old beater, then jump to a new beater, and so on and so forth. I totally get financial responsibility, but there's some people in this thread kidding themselves about being financially responsible. If you're financially responsible, you won't have a gaming computer. You won't have a game console. Ultimately, financial responsibility is sliding scale down to sitting on milk crates in commune housing.

There's obviously degrees of financial responsibility based on one's income and buying power. If they are people who want a new car every couple of years, then it's not a bad deal.

Look at it this way, if you start buying your own cars at 15 years old, and make it to 70 driving, you've got 55 years of cars to go through, and chances are you'll be actually enjoying them far less time than that. If you buy a car every 10 years, you'll see maybe 6-10 cars in your life. If you can afford it, why not make it count? Every 5 years? You'll see 12 - 20. You'll see far more TV's, far more computers, far more gizmos and gadgets.

This deal isn't for me (because I can't afford it), but if others can, and that's their prerogative in life, more power to them.

 

[Yuriman]

While I could afford it, I'd much rather retire 10 years earlier and continue driving my used economy cars. As you say, it's a matter of deciding what you most value.

 

[fleshconsumed]

If you're "financially responsible" under the arbitrary terms you're presenting you won't buy a Volvo. You won't buy a new car. You might buy an old beater, then jump to a new beater, and so on and so forth. I totally get financial responsibility, but there's some people in this thread kidding themselves about being financially responsible. If you're financially responsible, you won't have a gaming computer. You won't have a game console. Ultimately, financial responsibility is sliding scale down to sitting on milk crates in commune housing.

ROFL, I knew someone would latch to "financially responsible" phrase in my post. I think too many people equate financially responsible with living as frugal as possible. However, what Financially Responsible means that you can provide for yourself, for your family, today, and in the future, aka retirement. In practical terms it means that you have emergency fund, no to little debt, you save 10-15% for retirement (more if you want to retire early), and you don't throw money away for no reason. A higher income individual can achieve all of that, have his Volvo, and still be financially responsible. Now yes, technically having a beater is even more financially responsible than driving a Volvo, but at some point, as long as you are in fact being financially responsible, it doesn't hurt to live a little, enjoy the life instead of living like a pauper all the time. What is financially irresponsible IMO is $600/month lease because it's throwing away money for no reason, since buying the car outright will net you $10-15K in equity in your vehicle after 6 years. 6 year old car is still going to feel new, it wouldn't have that fresh new car factory smell, the initial excitement of getting a new car would have faded a long time ago, but it would still drive like new. So IMO this lease, just like any other lease is throwing away money.

 

[thecoolnessrune]

ROFL, I knew someone would latch to "financially responsible" phrase in my post. I think too many people equate financially responsible with living as frugal as possible. However, what Financially Responsible means that you can provide for yourself, for your family, today, and in the future, aka retirement. In practical terms it means that you have emergency fund, no to little debt, you save 10-15% for retirement (more if you want to retire early), and you don't throw money away for no reason. A higher income individual can achieve all of that, have his Volvo, and still be financially responsible. Now yes, technically having a beater is even more financially responsible than driving a Volvo, but at some point, as long as you are in fact being financially responsible, it doesn't hurt to live a little, enjoy the life instead of living like a pauper all the time. What is financially irresponsible IMO is $600/month lease because it's throwing away money for no reason, since buying the car outright will net you $10-15K in equity in your vehicle after 6 years. 6 year old car is still going to feel new, it wouldn't have that fresh new car factory smell, the initial excitement of getting a new car would have faded a long time ago, but it would still drive like new. So IMO this lease, just like any other lease is throwing away money.

The whole point of my point was simply that what you're stating is completely arbitrary. You're simply using your version of "financially responsible" to say it's bad, then you clarified in the above post. $600-700 a month is not that bad for a lot a lot of middle class. It's all about your priorities. If you don't have TV or Streaming Services, or computers, or hell, if you sit on milk crates all the time, you could probably pretty poor and still afford this. But I can totally agree that in your opinion, it's a bad deal. In my opinion, for me, it's also a bad deal. Because the return I get from the car (in tangible and intangible returns) don't make the money out per month worth it for me.

 

[dave_the_nerd]

Looks like some good deals on lightly used Volvos will be available in 2020 or so.

 

[Cozarkian]

In this case, financial responsibility can be measured objectively (at least in theory). Just compare the subscription cost to the estimated cost of paying cash for the same car and selling it two years later. I'll bet Volvo made those calculations in order to set the subscription price at an amount expected to increase Volvo's profit.

Looks like some good deals on lightly used Volvos will be available in 2020 or so.

That was my thought, too.

 

[Insomniator]

Doesn't seem too crazy for a luxury segment vehicle.

A 30k car loan for 5 years is about 600 a month. I wouldn't expect my wife's car for example (2014 Evoque) to be worth all that much when its 8 years old with 100k miles. Maybe 10 grand assuming it hasn't already fallen apart by then? Would 5 years of wear and tear items, insurance, and getting 2.5 new cars in that time period be worth 10k? Its pretty close for sure!

EDIT

I guess the issue with my math is that the XC40 starts at $35k and my Evoque was $50k new. I'm sure the subscription for the $50k version of the XC40 would be much more than 600 a month.

 

[Kaido]

Make sure there are no strings attached to the early replacement.

You have to sign up for another 24 months if you do the 12-month upgrade, so then you're in for 3 years of payments total.

 

[Kaido]

Interesting model. I know insurance varies based on so many variables, so it'd be interesting to see if they can offer the same price to everyone in the US. My guess is no, since it says "pricing starts at $600"

If Kia could do something like this for like $299/mo for say a Soul, that would be amazing for certain segments like college kids. No down payment, no maintenance, no insurance, just one monthly fee & gas and you're not on the hook for anything else for those two years.

 

[Kaido]

If you're "financially responsible" under the arbitrary terms you're presenting you won't buy a Volvo. You won't buy a new car. You might buy an old beater, then jump to a new beater, and so on and so forth. I totally get financial responsibility, but there's some people in this thread kidding themselves about being financially responsible. If you're financially responsible, you won't have a gaming computer. You won't have a game console. Ultimately, financial responsibility is sliding scale down to sitting on milk crates in commune housing.

There's obviously degrees of financial responsibility based on one's income and buying power. If they are people who want a new car every couple of years, then it's not a bad deal.

Look at it this way, if you start buying your own cars at 15 years old, and make it to 70 driving, you've got 55 years of cars to go through, and chances are you'll be actually enjoying them far less time than that. If you buy a car every 10 years, you'll see maybe 6-10 cars in your life. If you can afford it, why not make it count? Every 5 years? You'll see 12 - 20. You'll see far more TV's, far more computers, far more gizmos and gadgets.

This deal isn't for me (because I can't afford it), but if others can, and that's their prerogative in life, more power to them.

imo, financial responsibility boils down to exactly one sentence: you can buy whatever you can responsibly afford. I do not agree with the general adage that buying a late-model used car in good condition is the height of being financially responsible; that only applies if that is what your budget dictates, and in addition, if that is a personal goal of yours. I have plenty of friends my age who aren't married & don't have kids and can responsibly afford a brand-new Maserati simply because they have the budget available for it. Likewise, I have plenty of friends who cannot afford even a used Kia responsibly for various reasons (mostly due to other stupid financial decisions), so there are a lot of factors that go into the financial discussion for personal transportation.

I agree with your take - there are degrees of responsibility based on your income & buying power. I read a study not too long ago that was saying how even in bad economic times like the last recession, people still refused to give up things like going out to eat & spending on entertainment like movies. I have a number of associates who spend $100 every weekend on drinking, but then complain about not being able to afford a car payment on a new car. Aside from budget, it's also about priorities. You have a good point - you can argue it all the way down to sitting on milk crates if you want to, but in the end, everyone's situation is unique & everyone has their own financial demographic & personal goals, so it's a highly variable thing.

 

[Kaido]

ROFL, I knew someone would latch to "financially responsible" phrase in my post. I think too many people equate financially responsible with living as frugal as possible. However, what Financially Responsible means that you can provide for yourself, for your family, today, and in the future, aka retirement. In practical terms it means that you have emergency fund, no to little debt, you save 10-15% for retirement (more if you want to retire early), and you don't throw money away for no reason. A higher income individual can achieve all of that, have his Volvo, and still be financially responsible. Now yes, technically having a beater is even more financially responsible than driving a Volvo, but at some point, as long as you are in fact being financially responsible, it doesn't hurt to live a little, enjoy the life instead of living like a pauper all the time. What is financially irresponsible IMO is $600/month lease because it's throwing away money for no reason, since buying the car outright will net you $10-15K in equity in your vehicle after 6 years. 6 year old car is still going to feel new, it wouldn't have that fresh new car factory smell, the initial excitement of getting a new car would have faded a long time ago, but it would still drive like new. So IMO this lease, just like any other lease is throwing away money.

I don't see it the same way. My wife & I both leased for the last 10 years up until we had kids & bought our current cars due to the number of miles we drive. Our previous vehicle was a Honda Civic. $234 a month lease for 36 months, no down payment, no return fee. Two big draws for me were the latest safety features (I've been hit 4 times in my life, so I'm paranoid about having a safe car) & low maintenance. A lease means no surprise $500 repair bills, no having to replace brakes or tires, etc. I also work a lot, so having my car in the shop means down time on the road, which interrupts my schedule. Not that used cars break down all the time, but with a lease, the pricing was fixed, the reliability was high, and the convenience meant it was something I didn't have to worry about. On a tangent, I unfortunately got a lemon for my purchased vehicle, which has been in the shop for, hmm, I think we just crossed 90 days total lol, so that's been a real bummer.

So as far as leasing goes, I don't consider it throwing money away - I consider it as paying for a service that met my goals of having a reliable car with a fixed monthly price & no surprise bills along the way so that my budget could stay intact. Generally speaking for an average financial budget, the Volvo subscription is pretty dang high (almost triple what my Civic was), but then again, that's basically a luxury car on a custom short-term lease with frills, so if that matches your budget & your goals, more power to you. I really like the idea. The price, not so much, but it's a cool concept to have everything bundled & be able to upgrade cars as often as you do your smartphone.

 

[fleshconsumed]

I don't see it the same way. My wife & I both leased for the last 10 years up until we had kids & bought our current cars due to the number of miles we drive. Our previous vehicle was a Honda Civic. $234 a month lease for 36 months, no down payment, no return fee. Two big draws for me were the latest safety features (I've been hit 4 times in my life, so I'm paranoid about having a safe car) & low maintenance. A lease means no surprise $500 repair bills, no having to replace brakes or tires, etc. I also work a lot, so having my car in the shop means down time on the road, which interrupts my schedule. Not that used cars break down all the time, but with a lease, the pricing was fixed, the reliability was high, and the convenience meant it was something I didn't have to worry about. On a tangent, I unfortunately got a lemon for my purchased vehicle, which has been in the shop for, hmm, I think we just crossed 90 days total lol, so that's been a real bummer.

So as far as leasing goes, I don't consider it throwing money away - I consider it as paying for a service that met my goals of having a reliable car with a fixed monthly price & no surprise bills along the way so that my budget could stay intact. Generally speaking for an average financial budget, the Volvo subscription is pretty dang high (almost triple what my Civic was), but then again, that's basically a luxury car on a custom short-term lease with frills, so if that matches your budget & your goals, more power to you. I really like the idea. The price, not so much, but it's a cool concept to have everything bundled & be able to upgrade cars as often as you do your smartphone.

$234 * 36 = $8,424 New civic starts at $18,740. 2014 civics around me go for about $13,000. You could have purchased a new civic, sold it at the end of the warranty period after three years and come out ahead by $3,000. This is why I say leasing is throwing money away. Now, the math differs based on the brand and MSRP, but in general, and in your specific example, you're leaving money on the table.

 

[heymrdj]

$234 * 36 = $8,424 New civic starts at $18,740. 2014 civics around me go for about $13,000. You could have purchased a new civic, sold it at the end of the warranty period after three years and come out ahead by $3,000. This is why I say leasing is throwing money away. Now, the math differs based on the brand and MSRP, but in general, and in your specific example, you're leaving money on the table.

Sounds like some very cherry picked models or maybe somewhere that really likes Honda sedans. LX models here 2014 used 36K miles Very Good condition are 9300 trade in or 10.5 private party. My Ford Fiesta lease was a very good example of coming out ahead on a lease. 2014 model, 31K of 36K used on it, 7000 trade in value. Lease buyout was about 11.5K. It was a 18.9K car, 0 down, 215month. I dropped off the keys and walked away. My work mate however, who purchased his Focus in 2014, is still upside down in his purchase. It’s only worth 5K with 40K miles on it. Wants to get rid of it but would eat several thousand in negative.