Volvo Introduces a Subscription Service With the New XC40

Discussion in 'Auto News' started by GTPNewsWire, Dec 3, 2017.

  1. GTPNewsWire

    GTPNewsWire Contributing Writer

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  2. Moglet

    Moglet Premium

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    This sounds remarkably similar to Just Add Fuel which Peugeot have been running over here for quite some time now. I have no idea how popular it has been, it's not something I'd do myself but I can definitely see why people would want to use this method as it makes ownership very, very easy.
     
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  3. HarVee

    HarVee

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    This type of rental programme may actually work well in Europe, but I have doubts it'll succeed in North America.
     
  4. Eunos_Cosmo

    Eunos_Cosmo

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    I'm honestly waiting for somebody to release a life-bundle subscription.

    Netflix
    Internet
    Phone + Phone Service
    Gym
    Car + Gas + Insurance
    Meal Delivery
    Rent/Housing

    It's getting outta control.
     
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  5. sumbrownkid

    sumbrownkid

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    Is this Volvo’s response to the notion that this current generation are turning away from owning a car?
     
  6. LiMe101

    LiMe101

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    Soon enough people wont own anything.
     
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  7. Latvija27

    Latvija27

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    If I want a car I would want to own it not rent it and it's to expensive.
     
  8. TenEightyOne

    TenEightyOne

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    It seems to be. I know very few people with a new car who aren't leasing it. I suppose part of the offset for a brand new car is the several-thousand-pounds that you lose the moment you drive it.
     
  9. Moglet

    Moglet Premium

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    What makes you think it won't work well, out of interest? I don't really know much about car ownership in the US other than it seems like a lot of people lease cars. But that could just be the same as Europe.

    This sort of contract is the kind of ownership my wife would choose if she hadn't met me, she doesn't want to do anything besides put fuel in and hates the idea of having insurance, tax, servicing etc. as separate things. I can see the appeal of this method of driving but it's certainly not for me!
     
    Last edited: Dec 4, 2017
  10. Robin

    Robin Premium

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    Surprised this is a new thing in the US, nearly all new cars sold here are on hire purchase agreements where your basically pay a subscription and don't own it. Most car adverts only show the price in £ per month!

    Personally it's not my cup of tea but it's good for those who want a fixed payment every month that often includes servicing and insurance so they don't really have to worry about car ownership, but as with all contracts you often end up paying more.
     
    Last edited: Dec 4, 2017
  11. Naveek Darkroom

    Naveek Darkroom

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    I don't think the phrase "new lease on life" was meant to be so literal.

    Possibly. Maybe they're not playing to that idea so much as just offering an alternative to traditional ownership.

    Even if Volvo isn't the first to try this business model I can see the appeal.
     
  12. Famine

    Famine Administrator

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    It's not quite the same.

    Car finance products of the type you're talking about are a product. You buy the car, then you buy the finance product to pay for the car. Technically the finance company owns the car, but you're the owner in exactly the same way that you're a house owner if you have a mortgage.

    When your three years are up you can trade the car in against its market price (or guaranteed value) for another car/finance product, or pay off the lump sum to buy it (almost no-one ever does).

    With Geely's business model for Lynk & Co and now Volvo, you never own the car. Neither does a finance company. Volvo owns it. You literally pay to lease the car for a year or two, and give it back at the end. Volvo pays for all the (reasonable) servicing, maintenance and repair because it owns the car and wants it nice for when it flips it down to a car supermarket.


    Traditional car finance is buying a loan for a car you own, like a mortgage. This is renting.
     
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  13. Moglet

    Moglet Premium

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    Oh absolutely, Just Add Fuel is just a PCP with some bits added on (from what I know of it) and I can't see many customers making the balloon payment at the end. It'll be interesting to see if the Volvo scheme takes off, I know of quite a few friends who would love a proper rental system.
     
  14. Joey D

    Joey D Contributing Writer

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    You can still buy an XC40 if you want too. It's not just subscription only.

    The subscription service is actually cheaper than both buying and leasing an XC40. It's $14,400 if you got the entire 24 months with no money down and no insurance to worry about. If you take a similarly equipped XC40 an buy it, payments are $655 a month plus 10% down. Also you need to buy insurance for it which would be anywhere from $60-$200 a month depending on where you live.
     
  15. yas

    yas

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    I believe the upcoming Polestar will be initially subscription only, but let's see.

    I guess this is as a model that can work for people who prefer driving new cars and don't really bother. Still I'd expect it to be more suited for brands like Renault etc whose design and tech get "worn out" faster.

    I am normally more emotionally attached to my cars and besides preferring to pay upfront the whole sum and get a % off then go on and drive it for 7-8 years and when it comes to selling it's a drama. So that model is definitely not for me.