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

[Kaido]

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

So far, I've seen multiple complaints about the 8-speed in the XC40 (as well as the poorly-design shift knob, you'd think they'd learn after the Jeep incident that killed Anton Yelchin...).

Compared to the monthly loan payment, the subscription service really isn't that bad (if $600/mo for loan/maintenance/insurance fits your budget, that is). Base price on a standard XC40 is $35,200. On a standard 5-year loan, assuming you can magically get 0% interest, that's roughly $583.34 per month. So for an extra $16.67 per month ($600/mo subscription), you get maintenance & insurance included, which is a pretty good deal. Assuming you drive the lease's (er, "subscription's") allotted 15k miles annually, then at the end of 5 years on a purchased car, you'd have a paid-off vehicle with 75,000 miles on it, whereas with the subscription deal, you can upgrade every 2 years (or every 12 months, if you're willing to sign up for another 2-year agreement), but have nothing at the end of your subscription term (assuming you did one early upgrade & then a second additional subscription after that expired for 5 years of a subscription service total), but have everything but gas taken care of during that time. Neat idea!

Downside is you can get a base Tesla Model S sedan for that kind of money, instead of a baby Volvo SUV

 

[Herr Kutz]

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

I wouldn't classify 8/9/10 speeds along with the ZF that's in the Chrysler/Acura/Honda/etc. products. Most 8 speeds I've test driven have been very well behaved and I've read the Chevy 9-speed (co developed with Ford I think) is excellent.

 

[NutBucket]

I've also tried a couple of the Honda 10 speeds and they seemed OK too.

I don't get the shifter thing....basically people are morons. BMW uses a "return-to-center" shifter in nearly all their cars and I don't see any reports of problems.

 

[mizzou]

Sounds like a cool plan for rich people. You get to drive your expensive car without the annoyance of wanting to take care of it or the hassle of selling it. This is an expensive way to drive nice cars. If that's what you want to do, have at it I guess.

I've had the same car for 16 years. That is 192 months. It was originally MSRP'd for 32k and I think I bought it at like 29k with cash. If I spread that out over a loan for 16 years, I'd have paid $151 per month. Considering the average car payment (for one comparable to mine), the costs nowadays are over $500/month. So let's use that $600/month to drive a luxory car moving forward.

$600 x 192 months = $115,200. At the end of 192 months your vehicle is valued at $0.00 because you don't own it, but I guess you could buy it at a discounted rate. You probably owe a certain amount after every two years anyway, so you are probably even further in the hole.
$151 x 192 months = $29,000. At the end of 192 months, my vehicle is still worth about $6,000.00 - $9,000.00 . I've spent maybe $5,000?? on repairs over the 192 months, including tires/oil changes/major service. I have an upcoming $3,000-$4,000 major service as well. Some of the money I spent was preventative and not required at all.

I think if you spread the thought of paying for a car monthly at the short term, like 5 years, it's really hard to see the benefit of buying a car with cash. My wife, I spend a bit more money on her cars, but I buy her used luxory cars that people in this thread return at a huge discounted rate. That $40k luxory SUV is worth $29k after the prior owner was done with it. Leased cars are sometimes good because they have to maintain them and if there is no rust, it's a great deal.

--------------
Is the $600/month subscription absolutely terrible? I don't think so, I think it's possibly better then buying a car BRAND new. By far the best way to own a luxory car is buy one that is gently used, within 2-4 years old. The most fiscally responsible way to is to pay for a car with cash and don't overpay just for the new factory smell.

 

[Kaido]

My0 wife, I spend a bit more money on her cars, but I buy her used luxory cars that people in this thread return at a huge discounted rate. That $40k luxory SUV is worth $29k after the prior owner was done with it. Leased cars are sometimes good because they have to maintain them and if there is no rust, it's a great deal.

If you're buying luxury, late-model used is definitely the way to go (unless you just have money to burn & can buy at sticker new, in which case, more power to you! haha). The discounts on most makes & models are just terrific!

 

[NutBucket]

And now you can lease the used lease-returns.

 

[Kaido]

And now you can lease the used lease-returns.

Heard chatter about this, but never heard of anyone actually doing it. But it makes a lot of sense...car technology is constantly improving, so even though manufacturers are still cutting corners in production quality to meet budgets & deadlines, the overall longevity of new vehicles has really gone up in recent years. I wouldn't be surprised to see leases on used cars get more popular in the coming years...

 

[NutBucket]

I know Mercedes does it. Should be a good amount cheaper since the initial depreciation hit isn't there.

 

[Kaido]

I know Mercedes does it. Should be a good amount cheaper since the initial depreciation hit isn't there.

tbh I miss leasing. Granted, I got a lemon on my current (purchased) vehicle, and most of my "owned" rides in the past were beaters, so that's tainted my experience for ownership lol.

Tesla needs to hurry up & put the Roadster v2's 620-mile battery in the X already. And drop the price by $100k

 

[HitAnyKey]

Could be useful for executives and contract workers who both can probably right off the expense. Because it includes insurance already, I bet people with lots of tickets and high insurance rates might consider it as well. Unless they check your record ;P

If they could do this with the Mustang 5.0 / Camaro / Challenger HEMI, I would be all over it haha

 

[mizzou]

So....I wonder if they have more "Gotcha's" if you fail to pay on your subscription vs. fail to pay on your lease? Can they go after you for the entire subscription?

 

[rstrohkirch]

I've had the same car for 16 years. That is 192 months. It was originally MSRP'd for 32k and I think I bought it at like 29k with cash. If I spread that out over a loan for 16 years, I'd have paid $151 per month. Considering the average car payment (for one comparable to mine), the costs nowadays are over $500/month. So let's use that $600/month to drive a luxory car moving forward.

$600 x 192 months = $115,200. At the end of 192 months your vehicle is valued at $0.00 because you don't own it, but I guess you could buy it at a discounted rate. You probably owe a certain amount after every two years anyway, so you are probably even further in the hole.
$151 x 192 months = $29,000. At the end of 192 months, my vehicle is still worth about $6,000.00 - $9,000.00 . I've spent maybe $5,000?? on repairs over the 192 months, including tires/oil .

You have a 16 year old car that MSRP'd for 32k and you believe it is worth a median price of 7,500? What car is this and how many miles are on it?

 

[mizzou]

You have a 16 year old car that MSRP'd for 32k and you believe it is worth a median price of 7,500? What car is this and how many miles are on it?

02' 1500 chevy ext cab 150k miles LT trim 4x4 w/ Z71
If I sold it private party, I could get about 9,000 if someone was desperate at the righ time and 5,000 easy as a trade-in'

KBB has it at private party range $5,010 - $8,715

EDIT
MSRP
$33,008.00
Invoice
$28,882.00
Destination Charge
$745.00

 

[dave_the_nerd]

The used truck market is weird.

 

[mizzou]

The used truck market is weird.

thats exactly why im still in a used truck :-\

 

[bradly1101]

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!

Hmmm. My 24 yo. Previa was only dead to me because of a leaky sunroof. $26K/24 years = $1,083/year + ins. What now?

 

[bradly1101]

My mom leased a Supra then a Cressida back in the eighties. I'm sure it's different now, but man they hit her with a fee for going over mileage (not too much) and a couple of barely noticeable dings, and something about the carpet. I hate driving someone else's car. Cash is so easy (with research) since one brand lets you save up for two decades+ toward the next one. Cars are discarded like toilet paper anymore.

 

[Kaido]

Could be useful for executives and contract workers who both can probably right off the expense. Because it includes insurance already, I bet people with lots of tickets and high insurance rates might consider it as well. Unless they check your record ;P

They do check your record:

https://www.engadget.com/2018/03/02/volvo-xc40-care-by-volvo-hands-on/

As always, though, there are caveats. To qualify for Care by Volvo, you have to fit within certain insurance and credit parameters, as determined by Liberty Mutual. So if you have good credit but you have a few points on your driving record that put you outside what an underwriter finds acceptable, you're out of luck. There's no $650-per-month option for a bit higher insurance or to cover your bad credit. It's all or nothing.

 

[Kaido]

BMW's car subscription pilot program starts at $2,000 per month:

https://www.engadget.com/2018/04/04/bmw-car-subscription-service-pilot/

It lets you switch cars as often as you'd like:

A 'basic' Legend tier starts at $2,000 per month lets you choose from the M2, 4 Series, 5 Series (including the 530e plug-in hybrid), and the X5 (including its PHEV model). Pay as much as $3,700 per month for the performance-minded M tier and you can drive the M4 convertible, M5, M6 convertible, X5M and X6M.

I dunno, I could buy a pretty nice half-a-million-dollar home for $3.7k a month lol...

 

[Insomniator]

I'll be able to do a similar deal soon. 500/mo insurance included but you don't pick the exact car and they replace it every 6000 miles. Its only BMW's and whatever is available at the time so people have all kinds of models and I guess since its every 6k you assume you even out. M3 obviously worth more but the 328 that is available next time obviously worth less.

Not sure how large the selection is each time, and obviously this is an issue if you require a specific type of car (SUV). Sounds pretty fun if you just want to try out brand new BMW's every 6 months or so though.

 

[Kaido]

I'll be able to do a similar deal soon. 500/mo insurance included but you don't pick the exact car and they replace it every 6000 miles. Its only BMW's and whatever is available at the time so people have all kinds of models and I guess since its every 6k you assume you even out. M3 obviously worth more but the 328 that is available next time obviously worth less.

Not sure how large the selection is each time, and obviously this is an issue if you require a specific type of car (SUV). Sounds pretty fun if you just want to try out brand new BMW's every 6 months or so though.

Wow, that sounds pretty cool...my buddy is a contractor & gets his clients to pay for his rental cars, so he literally picks out a new rental like every three or four weeks, it's pretty awesome lol. But I think the bill is well over $1,500 a month...

 

[zinfamous]

For me, this would be rather terrible. I bought my current Mazda 3, a little less than 1 year old and ~28k miles on it (fleet car) for about $12k including roadside service + extended warranty. I've now had it for 9+ years, put about 36k miles on it in that time (including a single week of ~3.4k miles driving it across the country )

No issues whatsoever, regular maintenance, car is a gem. I can't fathom a reality where paying $7.5k a year for life, for a car, makes any kind of sense.

You aren't paying "half the value of the car." You are paying half the cost for essentially 2 or even 1 year of use, then you get the privilege of doing the same for a newer car. Each car is basically now pulling in something like 400% it's actual MSRP. Great for the car makers, terrible for consumers.

 

[rstrohkirch]

You don't fit into this particular picture. You bought used and not new, not to mention the vehicle you are referencing has an MSRP of nearly half the one in this article. A new Mazda 3 lease is like $200 a month. But that part still plays into your monthly payments for life scenario. The conversation on this topic should be centered on this new subscription model vs typical leasing but people are taking it to the typical leasing makes no financial sense route.

 

[Insomniator]

Yeah obviously driving a 10 year old Mazda 3 is always going to be a better 'deal' than anything remotely new or luxury.

The question is really what is the most effective way of spending $500+ bucks a month on a car. People are obviously buying them regardless if they can truly afford it or not, as freaking 80% of the cars i see in north jersey are BMW / MB / Audi or some similar brand.

 

[Kaido]

The question is really what is the most effective way of spending $500+ bucks a month on a car.

I need a better job