Demand for Volvo's subscription service is outpacing vehicle supply

[Shawn Knight]

The big picture: Volvo's vehicle subscription service has proven so popular that the company can't keep up with demand. It's not the most affordable way to tackle vehicle ownership but that obviously isn't stopping people from signing up. The biggest loser here, however, appears to be traditional car deals as they're missing out on sales and leases that would otherwise involve them.

Volvo at the 2017 LA Auto Show a year ago announced Care by Volvo, a subscription model that offers a new take on traditional vehicle ownership. For $650 per month, you get a new Volvo XC40 crossover, 24/7 concierge service, tire and wheel road hazard protection, 15,000-mile annual allowance, factory scheduled maintenance (including wear items like wipers and brakes) at no charge, insurance through Liberty Mutual and $1,000 in excess wear and use protection when you turn the car back in.

Subscribers must sign a 24-month agreement but have the option to upgrade to a new model after just 12 months.

Basically, all you pay for is fuel.

The subscription service has turned out to be a huge hit for Volvo. According to a recent report from Automotive News, Volvo sold the number of subscriptions it anticipated for the first full year in just four months. As a result, there is now a wait list for the XC40 that extends into 2019.

Other vehicles are also part of the program although pricing varies.

BMW launched a similar subscription service earlier this year starting at $2,000 per month. Cadillac recently ended its subscription service, Book by Cadillac, due to a lack of interest. Perhaps its $1,800 per month price point had something to do with it.

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https://www.techspot.com/news/77400-demand-volvo-subscription-service-outpacing-vehicle-supply.html

 

[VitalyT]

Volvo introduced this because sails on their vehicles collapsed, due to too many issues, from quality to performance-related. So now basically anyone who is mad enough to buy one, wants the subscription service included. And Volvo is trying to turn the tables and present this as a huge demand for their vehicles, while trying to salvage the situation from being the exact opposite.

Talk about dishonest marketing, Volvo is in the lead there. Like when they advertised XC90 T8 to be able to return 125mpg, which in reality is 35mpg at best. Or their new S60 PoleStar with 400bhp that needs about 6.5 seconds to get from 0 to 60mph, total disgrace!

 

[dirtyferret]

$650 per month and after two years you get nothing...all I can say is it's not for me

 

[p51d007]

NOPE! I BUY my vehicles. I might drive 4k per year. After 2-3 years they are paid off and I owe someone NOTHING, but I still have the vehicle.
With this, you get nothing but constant payments. I guess if it's like your smartphone, you don't
"mind" making monthly payments FOREVER. But, I pay off my vehicle, and keep the rest of the money in the bank.

 

[Theinsanegamer]

The "millenials suck at spending money" meme continues. These people are spending more a month on a car then I do on my HOUSE FFS. All this for some junk chinese volvo with an under-performing fuel sucking engine with electrical problems out the wazoo. Chryslers are rock solid million mile cars compared to current volvos.

It's funny so many young people scream how we need more taxes on the rich and more regulations to even out wealth distribution while willingly forking over WAY too much money for a basic necessity, just because owning anything is too much responsibility for them.

Come to think of it, I should start a subscription service for breathing. $29.99 a month for your oxygen canisters and mask, refills are free, way cheaper then going outside and breathing.