Volvo accelerates into the growing auto subscription model
Americans subscribe to Internet TV, smartphones, gaming software and more, so why not a car?
Volvo is the newest driver to take the subscription model for a test drive, announcing this week its Care by Volvo car subscription service that lumps monthly payments, insurance, 24/7 service and routine maintenance into an all-inclusive $600-per-month offer you can sign up for online.
Without the need for a down payment or insurance checks, you can choose between two models of the new 2019 XC40 and get an allowance of 15,000 miles per year, plus an option to swap vehicles 12 months in, as long as you commit to driving a Volvo for 24 months.
Volvo’s launch into the subscription space follows BOOK by Cadillac, which launched in January with an app that enables you to drive a Cadillac in New York City, Los Angeles and Dallas for $1,500 per month. In October, the Porsche Passport app began offering month-to-month subscriptions in Atlanta, starting at $2,000, utilizing the technology of startup, Clutch. Since 2014, Clutch software has powered vehicle subscriptions for Drive Flow in North Carolina, Drive Germain in Columbus, FlexWheels in Miami and Lux.Car in Omaha. Late last year Ford acquired San Francisco startup Canvas and has $400 month-to-month subscriptions there and in Los Angeles.
Like most of the other auto subscriptions, Care by Volvo provides 24/7 customer service, concierge and roadside assistance. Its insurance partner, Liberty Mutual, protects drivers up to $250,000 per person for bodily injury and $500,000 per accident with a $500 deductible on both comprehensive and collision coverage.
About a month ago Tesla went a different route and launched its own insurance plan called InsureMyTesla. Unique features include new car replacement, which allows for a brand new vehicle within the first year in case of a total loss, a guaranteed rate for one full year, genuine replacement parts, optional 24-hour roadside assistance beyond Tesla’s original warranty agreement, optional rental car reimbursement to pay for costs for as long as it takes to make repairs and a claims valet service to drop off a rental car or schedule a swap.
In addition to eliminating complicated processes, paperwork and headaches, a subscription model may also provide a way to avoid insurance company biases against older women and others by having the manufacturer or dealer absorb insurance costs.
To see how a vehicle subscription compares to the cost of owning and insuring a car yourself, check out our comparison of car loan rates and terms as well as our car insurance guide.
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