Volvo Financial Services’ subscription model Care By Volvo undercuts other luxury OEM programs on the market with a subscription that’s less flexible but more affordable to a younger audience, said Peter Wexler, Volvo Cars USA’s director of mobility.
Where similar programs such as Book By Cadillac and Porsche Passport start at $1,800 and $2,000 a month, respectively, Care By Volvo has entered the market at $600 per month; all three programs include maintenance and insurance.
“Some of these other programs focus on a different model where you get access to vehicles and it more closely resembles a rental,” Wexler told Auto Finance News. “We are focused more on the subscription being a third type of ownership model as compared to buying or leasing.”
Care By Volvo subscribers agree to a two-year term and get access to a single vehicle — the 2019 XC40 — with the ability to upgrade to a new model after one year. By comparison, Cadillac and Porsche’s subscription models allow members to opt out after a month and have access to a fleet of vehicles. Volvo’s program is more like a phone plan that allows consumers to upgrade to the new model every year, whereas others have followed the Netflix monthly subscription model.
“Clearly, they go the other [route] with a month-to-month approach, and that in itself necessitates an increase in the price point,” Wexler said. “We have certain fundamentals in our program that we decided on a global basis and that we feel customers want when they subscribe to a vehicle, and obviously we targeted a price point we think is obtainable for a larger audience.”
The XC40 crossover, which is aimed at millennials, is slated for a U.S. launch in March. Deliveries for Care By Volvo will begin nationwide in April.
