► Stylish, slick, and expensive subscription service
► Aimed squarely at young(ish) people
► Focus on flexibility
Volvo has launched its new payment subscription service, offering a car, maintenance, and roadside assistance for one monthly fee.
Care by Volvo prices start from £559 per month for a Volvo XC40 T3 Momentum – without insurance bundled in. There are no deposits, or sign up fees. Prices rise to more than £1,000 per month for more expensive cars, like T8 versions of the Volvo XC90.
The Swedish brand is rolling the scheme out nationwide after successful regional trials in London, the Netherlands, Germany, and Norway. Although Volvo admits that sales in the UK were only in double figures.
Volvo reckons it brings ‘unrivalled flexibility’ to the market – something customers are desperately seeking out.
Conor Horne, the UK Head of Care by Volvo, said: ‘Our research shows that customers on a three or a four-year PCP deal want to change after two years. Financial status change, a growing family, they’re all good reasons why.’
How does it work?
Volvo promises that sign up takes seconds, not minutes.
It looks simple enough:
1) Go to Care by Volvo homepage
2) Choose from cars in stock or configure a new car
3) Pick annual mileage (6-24,000 mileage)
4) Get delivered to home, or pick up from dealer
5) In stock cars delivered within 30 days
Recognising that this may be a new concept for many customers, Volvo is giving potential users the opportunity to try the service risk-free for 30 days without any notice period. Insurance is provided and there are no cancellation fees – customers will just need to pay the monthly cost.
After the 30 days, customers can change their car or end their subscription with just three months’ notice. The subscription is open-ended and there is no cancellation fee.
In essence, it works like a leasing package without a set finish date, and with services thrown in. Plus Volvo offers the option to opt in to its insurance package too.
Why now?
Conor Horne, the UK Head of Care by Volvo said: ‘There have been big societal changes, magnified by an economic downturn. These factors make this the perfect time to launch Care By Volvo nationally.’
According to Volvo, the subscription service is ‘an attractive alternative for customers’ and ‘it covers more aspects of car ownership with greater flexibility than any other comparable service currently on the market in the UK.’
Wait, couldn’t you swap cars before?
Volvo previously said that when the service was upgraded, users would be allowed to borrow another Volvo for a set period of time.
This is no longer the case.
What about the Volvo dealers?
Amazingly, during the pilot period, 92% of German, Dutch, and Norweigan customers were new to the brand.
However, 70% did not visit a dealer. And 75% chose not to configure their own car.
What does this mean? Well broadly, young people are signing up, and they don’t want to wait around for a car to be built. It also looks like these folk don’t want dealer interaction.
However, one Volvo dealer reckons it’s not the bad news it seems.
Guy Twiselton, Volvo Franchise Dealer, Endeavour Automotive, said: ‘I certainly don’t see it as the end of the retailer.
‘Care by Volvo means we can offer something new for customers, rather than just PCP or HP.
‘In some aspects, our role as a retailer doesn’t change. We’re there to help customers choose the right car. Plus we’re also there to help with the sign up process if they’d prefer not doing it from home. Sometimes people need a bit of reassurance.
‘And of course, customers need us for servicing and maintenance.’
What cars are available?
Customers can choose from any model in the current Volvo line-up. Polestars are not available with the Care by Volvo.
What’s included in the price?
The monthly cost of Care by Volvo includes:
– Scheduled servicing
– Wear-and-tear maintenance and repairs
– Replacement tyres
– 24/7 roadside assistance cover
– 10GB in-car WiFi per month (data plan lasts the duration of the Care by Volvo subscription)
– Annual road fund licence
– MOT testing (where applicable)
– Access to a dedicated Care by Volvo customer service team
Verdict (including a very simple price analysis)
Top Volvo boffins informed us that the deals were competitive with leasing offers if no deposit was taken into account.
Let’s do a rough price comparison:
Care by Volvo
Car: Volvo XC40 T3 Momentum
Mileage: 8,000 per year
Contract length: rolling
Initial deposit: £0
Monthly cost: £574
Cost for 24 months (24 payments): £13,776
Typical leasing deal
Car: Volvo XC40 T3 Inscription
Mileage: 8,000 per year
Contract length: 24 months
Initial deposit: £500
Maintenance package: £36.55
Total monthly cost: £513
Cost for 24 months (23 payments): £12,299
Total cost difference here is £1477 over two years (that’s £61.50 per month for maths fans).
That looks like a lot of money, but some people might be willing to pay the extra dosh for the ability to chop and change more regularly, plus little extras that leasing companies don’t provide, like Care by Volvo customer service team and wear-and-tear repairs.