Volvo CEO Anders Gustafsson and Heith Rogers talk as Rogers signed up for an XC40 through the Care by Volvo plan at the L.A. Auto Show.
This story contains updated information.
Volvo buyers who want to skip the hassle of negotiating a deal on the 2018 XC40 will be able to sign up for the new Care by Volvo subscription plan and, for a flat $600 a month, get not only the compact SUV but also their insurance, title and other fees, as well as repairs and maintenance thrown in, as well.
Volvo is betting that, in an era when consumers are shifting more and more to monthly subscription models, some car buyers will also look forward to having a set price covering all their transportation expenses but for gasoline.
The automaker had announced the Care program several months ago but only revealed pricing this week during a news conference at the Los Angeles Auto Show. It demonstrated the ease of the process by having buyer Heith Rogers sign up for a new Volvo XC40 subscription on stage. It took the Los Angeles resident less than 10 minutes to lock things down.
He also bumped the price tag up to just over $700 after opting for the R Line version of the XC40, but the Care by Volvo program intentionally limits a customer’s range of choices to a handful of packages. Just as significantly, it sets a fixed price for the vehicle, insurance and fees, ignoring traditional, regional and local differences. That can prove to bring big savings in high costs states such as California, or in places like Michigan, with unusually high insurance premiums.
Hieth Rogers signed up with Care by Volvo, including upgrading to the $700 a month R-Line package, in about 10 minutes.
Maintenance and repairs are also included in the 24-month deal. And a buyer will have the option of trading in on a new XC40 after 12 months.
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“We really think we can change the industry with Care by Volvo,” Anders Gustafsson, the new CEO of Volvo Cars USA, said during the news conference.
Initially, the subscription service will be available only for the new XC40 which will next year become the first vehicle to go into production at Volvo’s new assembly plant near Charleston, South Carolina. Currently, the vehicle is being imported.
“We believe this will be seen as a more favorable option” for buyers who are used to subscription services already, such as digital music programs, added Hakan Samuelsson, the CEO of parent company Volvo Cars. That should mean Gen-X and millennial motorists, in particular.
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Volvo is just one of several automakers experimenting with subscription services, though it is the first to go national, noted Samuelsson, with the program also offered in a handful of European markets, as well.
Cadillac recently announced it is expanding the pilot program, Book by Cadillac, that it launched in New York City early this year. For a set $1,800 a month – with no fixed contract – customers get one of a variety of different Caddy models. They can swap it out for another vehicle up to 18 times a year.
Porsche has a similar subscription concept being tested around its U.S. headquarters in Atlanta. Dubbed Porsche Passport, customers can swap out as often as they want for a different vehicle. Depending upon which models are covered, it can cost up to $2,000 a month, as well as a $500 activation fee.
(To see more about Care by Volvo, Click Here.)
Several other manufacturers, including Audi and Ford, are testing their own subscription programs abroad, and a senior Lexus official told TheDetroitBureau.com this week that a possible project of its own is “under study.”