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

[Kaido]

$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.

If your only metric is financial savings, then yes, that is accurate. And if you are hung up on ownership, then that is also important. But everyone has a unique financial situation & individual goals. For me, for the last 10 years, I didn't care about owning a car, and I could afford to have a base Civic/Kia/whatever lease every 3 years in my budget. A decade of not having to worry about my car situation was awesome, having come from a handful of unreliable beaters before that time period.

It's the same idea as having say cable or Netflix. You could save a lot of money by not having television services, or by switching to streaming services, but if you're really into live sports, then paying for those services is worthwhile, if that's what you want & if you can afford it.

 

[Kaido]

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.

OT but how was your Fiesta experience?

 

[dave_the_nerd]

$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.

Cash flow. You might be able to save money buying vs. a lease, but if a lease is $250/mo and a payment is $350/mo, saving $3k in two years doesn't matter if you can't afford the extra $100/mo today.

 

[Aharami]

autoblog did a short article on this https://www.autoblog.com/2017/11/30...ce-compare-leasing/?ncid=edlinkusauto00000016

 

[Kaido]

autoblog did a short article on this https://www.autoblog.com/2017/11/30...ce-compare-leasing/?ncid=edlinkusauto00000016

Interesting:

For leasing customers, Volvo plans to offer the base XC40 T5 Momentum at $325 per month for 36 months with $3,000 down. (With no money down, that monthly rate climbs to $600 — the same as the subscription fee.) Looked at another way, over the 24-month subscription, you're spending $14,400 on a car that retails starting at $35,200. Compare that with with $14,700 total over 36 months for the conventional lease, including the $3,000 down payment but excluding insurance, maintenance and repairs.

Their math is garbage. $325 a month for a lease with $3,000 down, which climbs to $600/mo with no money down...that makes zero sense. I've never put a down payment on any of my leases. iirc the math worked out to something like $13 extra per month for everything $1000 you finance on a lease, so not putting $3k as a down payment should only add $39/mo to the $325/mo payment for a total of $365/mo.

 

[thecoolnessrune]

Interesting:


Their math is garbage. $325 a month for a lease with $3,0000 down, which climbs to $600 with no money down...that makes zero sense. I've never put a down payment on any of my leases. iirc the math worked out to something like $13 extra per month for everything $1000 you finance on a lease, so not putting $3k as a down payment should only add $39/mo to the $325/mo payment for a total of $365/mo.

Same, and I'm also the same way about buying cars period. I don't do money down. With today's car incentives you can often get your money lent to you below inflation. No point in tossing liquidity out the door if you can get someone else to do it for you.

 

[mindless1]

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.

I look at it more as cost:benefit ratio.

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.

Categorize expenditures. TV or a gaming computer falls under entertainment budget. I wouldn't get a good cost:benefit ratio from replacing those every couple years either, computer especially would just be more hassle to set a new one up that often than the benefit gained, except that owning a computer I can demote it to less demanding uses when it's time to upgrade, similar to owning a vehicle rather than leasing it. Spare vehicles that you put fewer miles on, tend to be very inexpensive to maintain and in the case of an SUV or pickup, add utility over only having an everyday driver car.

 

[heymrdj]

I look at it more as cost:benefit ratio.



Categorize expenditures. TV or a gaming computer falls under entertainment budget. I wouldn't get a good cost:benefit ratio from replacing those every couple years either, computer especially would just be more hassle to set a new one up that often than the benefit gained, except that owning a computer I can demote it to less demanding uses when it's time to upgrade, similar to owning a vehicle rather than leasing it. Spare vehicles that you put fewer miles on, tend to be very inexpensive to maintain and in the case of an SUV or pickup, add utility over only having an everyday driver car.

You don’t have any passion for driving or cars then. I use a 10 year old gaming desktop at home, 7 year old TVs, server from 2005 that’s been upgraded here and there a piece at a time. But I drive about 1.5-2K a month between work and pleasure. I lease my cars and I subscription purchase my phones. Because they are in my hands every single day and deliver the most bang for my buck in terms of tangible pleasures. My Silverado is by far the best thing I’ve ever purchased. It’s powerful, it’s utilitarian (I two or use the bed multiple times a week, everyone’s value will vary), and it’s comfortable. I can set up my entire laptop and side desk in the passenger side and post up in the mobile office for an hour or two at a time. I don’t even flinch at the payment every month I enjoy it so much.

 

[heymrdj]

OT but how was your Fiesta experience?

If I took the transmission out? 9/10. I struggled soooo hard not to get another one. The fit and finish were superb, after updates Sync worked flawlessly with both my Android and Apple and Microsoft 8.1/10 phones. Driving it was sporty, and it was ungodly maneuverable around town. But that grinding transmission and the clutch packs Ford refuses to replace. Several months after I traded Ford changed something, because suddenly all my local and internet friends that had Focus and Fiesta vehicles were getting clutch packs regardless of the clutch test from Ford. If they would put a normal 6spd in it I’d get another for a runaround. Now I have to give it to the Chevrolet Cruze. The Spark is too lethargic. Neither I think quite match the fit and finish on the Ford though.

Sadly, rather than make it better (where the European model refresh for 2018 is now getting a normal auto), Ford has discontinued the Fiesta for 2018.

 

[dave_the_nerd]

If I took the transmission out? 9/10. I struggled soooo hard not to get another one. The fit and finish were superb, after updates Sync worked flawlessly with both my Android and Apple and Microsoft 8.1/10 phones. Driving it was sporty, and it was ungodly maneuverable around town. But that grinding transmission and the clutch packs Ford refuses to replace. Several months after I traded Ford changed something, because suddenly all my local and internet friends that had Focus and Fiesta vehicles were getting clutch packs regardless of the clutch test from Ford. If they would put a normal 6spd in it I’d get another for a runaround. Now I have to give it to the Chevrolet Cruze. The Spark is too lethargic. Neither I think quite match the fit and finish on the Ford though.

Sadly, rather than make it better (where the European model refresh for 2018 is now getting a normal auto), Ford has discontinued the Fiesta for 2018.

It's a shame, too. I've seen a few of them around, they're cute little cars. I like the wagon form factor. They'll keep selling them in the UK, where they're crazy-popular.

But honestly? I don't blame 'em. Focuses outsell it 4:1. Slightly better collision performance, slightly better power to weight, slightly higher monthly payment, slightly lower mileage, and slightly roomier. It's a better low end car for the US market, as long as gas is cheap and unemployment is low.

Maybe they'll fire up the production line in Mexico again when gas prices go up.

 

[thedarkwolf]

And that is why my used 2013 Ford Focus is a 5 speed manual well that and it was MUCH cheaper than the crappy DCT auto ones.

 

[mindless1]

You don’t have any passion for driving or cars then.

Or I do, but I'm not deluded into thinking incremental 2 year upgrades to a soccer mom suv at highest cost possible is equivalent to driving a high performance automobile.

 

[heymrdj]

Or I do, but I'm not deluded into thinking incremental 2 year upgrades to a soccer mom suv at highest cost possible is equivalent to driving a high performance automobile.

Doesn’t have to be high performance. It has to be desired and useful. You’re deluded to think your opinion is the right one or even a popular one. Cars have become more about tech than performance and there hasn’t been a single trade since 2012 that I made that didn’t come with nice new things. Cars are upgrading in ability far faster than the now stagnant computer industry.

 

[Yuriman]

I'd like to point out that how entertaining a vehicle is, is relative, and a moving target. In an absolute sense, just about any used economy car today will have superior handling, responsiveness, acceleration and safety than nearly all vehicles made 50 years ago. People greatly enjoyed driving then, too. What has changed is the cost, and our threshold (expectation) for the same level of enjoyment.

I'm sure Volvo will do very well with this program, and consumers today will spend a much larger portion of their earnings to have a similar level of subjective enjoyment.

 

[mindless1]

Doesn’t have to be high performance. It has to be desired and useful. You’re deluded to think your opinion is the right one or even a popular one. Cars have become more about tech than performance and there hasn’t been a single trade since 2012 that I made that didn’t come with nice new things. Cars are upgrading in ability far faster than the now stagnant computer industry.

I never claimed it was right for everyone, but it is popular. Often parents give (or at least loan) their old ride to their children when they come of driving age. As far as the tech goes, I find it more of an annoyance than a benefit. Hands free calling is nice but I don't need parking assist, backup camera, speed/mode adjustable steering, memory seat, etc etc etc.

IMO vehicles are now the least ergonomic they've been in decades. The one good use I would have for my digital dash is if it popped up OBDII faults codes as they appeared including the real time data causing it.

 

[monkeydelmagico]

Interesting:
Their math is garbage. $325 a month for a lease with $3,000 down, which climbs to $600/mo with no money down...that makes zero sense. I've never put a down payment on any of my leases. iirc the math worked out to something like $13 extra per month for everything $1000 you finance on a lease, so not putting $3k as a down payment should only add $39/mo to the $325/mo payment for a total of $365/mo.

Agreed. If you go into a Volvo dealer and ask nicely you can walk out with this car for under $400.- a month and no down payment lease. The extra $200.- to "subscribe" to Volvo seems like a fair markup on insurance and maintenance. Really a case by case basis though. I could probably do a traditional purchase/insurance and come out ahead.

 

[jlee]

Agreed. If you go into a Volvo dealer and ask nicely you can walk out with this car for under $400.- a month and no down payment lease. The extra $200.- to "subscribe" to Volvo seems like a fair markup on insurance and maintenance. Really a case by case basis though. I could probably do a traditional purchase/insurance and come out ahead.

With a new car every year? Maybe..

 

[heymrdj]

It's a shame, too. I've seen a few of them around, they're cute little cars. I like the wagon form factor. They'll keep selling them in the UK, where they're crazy-popular.

But honestly? I don't blame 'em. Focuses outsell it 4:1. Slightly better collision performance, slightly better power to weight, slightly higher monthly payment, slightly lower mileage, and slightly roomier. It's a better low end car for the US market, as long as gas is cheap and unemployment is low.

Maybe they'll fire up the production line in Mexico again when gas prices go up.

You’re absolutely right. Even when I was getting my Fiesta, the salesman was talking about how much better the Focus leased and that I could get a few more features in the Focus for barely 15$ more a month. But I wanted my green envy Fiesta! They had to order it but it was worth it.

 

[Kaido]

I'd like to point out that how entertaining a vehicle is, is relative, and a moving target. In an absolute sense, just about any used economy car today will have superior handling, responsiveness, acceleration and safety than nearly all vehicles made 50 years ago. People greatly enjoyed driving then, too. What has changed is the cost, and our threshold (expectation) for the same level of enjoyment.

I'm sure Volvo will do very well with this program, and consumers today will spend a much larger portion of their earnings to have a similar level of subjective enjoyment.

My last couple of cars have had electric steering, which has been amazing. Which is funny, because literally every single review I've seen on modern cars say they're numb & they hate electric steering & blah blah blah, and I'm sitting here all like, MAN this car is easy to steer! lol. I appreciate other steering methods, but it's so nice to just have an easy-to-turn steering wheel to pilot the car with. My shared DD in HS was an '89 Grand Marquis...you literally had to spin the wheel around 3 or 4 times to get it to make a turn lol. I do not miss that at all, thank you very much!

 

[mindless1]

^ That has little to do with modern tech, was just a bad engineering decision to set up the steering ratio that low. It was a low point for american automobiles, where they kept designing like everyone is as slow as the car is. Fortunately times have changed.

GM was notorious for this the moment they switched to FWD, until the turn of the century.

 

[Kaido]

^ That has little to do with modern tech, was just a bad engineering decision to set up the steering ratio that low. It was a low point for american automobiles, where they kept designing like everyone is as slow as the car is. Fortunately times have changed.

GM was notorious for this the moment they switched to FWD, until the turn of the century.

Well, that & it's nice being able to park without needing popeye forearms like you do in cars without power steering

 

[dave_the_nerd]

^ That has little to do with modern tech, was just a bad engineering decision to set up the steering ratio that low. It was a low point for american automobiles, where they kept designing like everyone is as slow as the car is. Fortunately times have changed.

GM was notorious for this the moment they switched to FWD, until the turn of the century.

Yeah... it’s weird, thinking about how cars in the ‘80s were set up.... a bunch of really pretty smart people looked at all their available options and said, “yes. This is how we should do it.”

Cocaine I guess.

 

[Subyman]

I'm a sucker for ownership. I saw too many of my friends and family get hurt by the 2008 financial crisis to be too trusting of my future income and of financing too many things. I like to "get purchases behind me" as soon as possible instead of "using someone else's money." That may mean I lose the possibility of building a larger business in my lifetime but it also eliminates a lot of my risk. I'm fine with that. I traded in a car and did the normal 5 year loan on my truck. Almost done paying it off and it only has 40k miles so I'll be driving it for another 5 years with no payment. I'm looking forward to that. I'm totally not the type that this subscription model attracts.

 

[Kaido]

Now available using Apple Pay to subscribe to the monthly payment:

https://www.engadget.com/2018/03/30/volvo-xc40-subscription-iphone-apple-pay/

Pretty neat. I'll probably take one for a test-drive, but it has an 8-speed transmission & I've been reading that it has all of the same issues that other 8/9/10-speed transmissions have

 

[NutBucket]

At least it's an Aisin. I didn't notice any odd behavior when I (albeit briefly) test drove an XC-90.