Care by Volvo: What is Car Subscription, and Will It Become the Norm?

What is “car subscription”? 

“Care by Volvo? What’s that all about?” Since Volvo invited TFLcar to a media drive in Austin, Texas this week and we posted our “Everything You Need to Know” article and video, it’s a question I’ve seen cropping up that you all would like answered. What is Care by Volvo, and how does it work? This isn’t something completely out of left field, as it happens. Volvo’s own spin-off brand Polestar is offering their debut model through a subscription service, rather than as a traditional purchase.

In short, with the peception of the Polestar 1, you can still purchase the Volvo XC40, V60, and other models the company folds into the Care By Volvo program through traditional means. If you want to walk in and buy the car in cash, you can. If you want to finance, dealers will still be happy to work with you. You can also go through a traditional lease term, if that’s what you want. Care by Volvo offers another alternative for shoppers who want to use and trade in their cars along the same lines as their phones. Here’s how it works:

Care by Volvo: The Highlights

Care by Volvo offers its subscription service on a two-year term at a fixed rate. The actual rate depends on the model, trim level, and options you select. Their program includes “everything except gas”, according to Volvo. There is no down payment with this option, unlike fees due at signing with a traditional lease.

For instance, a 2019 Volvo XC40 T5 AWD Momentum (Base MSRP $36,195) (as shown in the video below) costs $600/month. A more expensive XC40 T5 R-Design (Base MSRP $38,695) would cost $700/month during that two-year term.

So what do you get for your money? Care by Volvo’s highlights include:

• Negotiation-free (one set price, take it or leave it)
• No down payment, provided you pass Volvo’s credit check
• Online vehicle selection (more below)
• Flat-rate during two-year term includes:
  • General maintenance (oil changes, tire rotations, etc.)
  • Wear and tear items (wipers, tires, air filters, etc.)
  • Road hazard protection
  • 24/7 concierge & emergency/roadside assistance
  • Insurance (through Liberty Mutual)
  • Two-year commitment
    • Optional upgrade after one-year
    • If you upgrade, the two-year term resets
  • Volvo on Call app with remote start
    • Car sharing – allow others to use your car via the app
  • 15,000 miles per year
    • Overage penalty on mileage, as with a normal lease
  • Does NOT include Volvo accessories or items outside what comes with the car
    • No snow tires, appearance accessories (other than factory packages)

How does the process work?

Volvo allows prospective customers to select their car and go through the credit check process online. However, you actually complete the transaction and pick up the car through your local Volvo dealer. This is not a direct sales model.

When you select the car you want, Volvo’s finance department runs your credit, and passes you off to a concierge if you’re approved. The concierge coordinates securing the car you want with your nearest Volvo dealer. When that’s all copacetic, you head over to the dealer to complete the final paperwork and pick up the keys.

At the end of your Care by Volvo commitment, you have a few options moving forward:

1. Turn in the keys and walk away (no further charges)
2. Purchase the vehicle
   • Financing is handled through the dealer and its available pool of lenders for the remaining cost on the vehicle
3. Move on to another subscription
   • You can upgrade after one year, but your clock resets

The Volvo dealer will be your primary point of contact for starting and renewing your subscription, as well as any maintenance during your commitment. The online site functions more as a lead-generating device for Volvo dealers, since the dealers actually carry out the transaction.

What about insurance?

Liberty Mutual underwrites the insurance policies for all cars under the Care by Volvo program. You don’t (currently) get a choice in the matter. If you want to go this route, you have to insure through Liberty Mutual. That means you won’t get to fold this car into a bundled policy, unless you’re already with Liberty Mutual.

Insurance is included with the flat-rate subscription fee. It includes $500,000 liability coverage with a $500 deductible. Volvo did not clarify how much of that liability coverage breaks down by uninsured/underinsured coverage, medical expenses, property damage, etc.

You cannot uncouple this particular insurance coverage from the deal. If you don’t want to insure through Liberty Mutual, you’ll have to purchase or finance the car normally. If Liberty Mutual doesn’t want to cover you, you’ll have to buy the car normally.

Is car subscription the way forward?

In a way, car subscription may be enticing to most people out there shopping for a car. There are a few differences between the Care by Volvo program and a traditional lease. Here, you don’t pay signing fees (you do pay taxes and registration fees), and insurance is included.

I think of this more as a “set it and forget it” lease. If you don’t care for negotiating and want a flat price that you can budget around every month, this may be an appealing option. However, if you want more freedom to negotiate and more choice, you may want to go the traditional route instead.

Let us know what you think about this model in the comments below. Subscribe to TFLcar and TFLnow on YouTube for more news, views, and real-world reviews! Check out the video below for everything you need to know about the new Volvo XC40: