Add a luxury Volvo to
your list of monthly subscriptions
$600 per
month includes nearly everything but gas.
When Volvo
introduced the smallest member of its SUV line, the XC40, it wasn't the car
that got all the attention. It was how the Swedish automaker planned on leasing
it. With Care by Volvo, would-be XC40 drivers wouldn't
invest $35,200 to own the all-wheel-drive vehicle but rather pay a monthly
subscription of $600 that includes insurance, routine maintenance, wear and
tear, roadside assistance, and zero money down. So yeah, it's a bit like a
lease. But better.
"Better"
has changed markets. The iPhone was like a Palm Treo or Blackberry smartphone
but better. Netflix rented DVDs like Blockbuster but better. Laptops are just
better desktop computers. What Volvo is doing is a better lease -- and it has the
potential to change how we look at car ownership.
Although
we're inching closer to a future in which autonomous cars are commonplace, the
way we actually own cars hasn't changed much. You either purchase a car or
lease it. Care by Volvo adds a third option: a near
frictionless subscription that includes pretty much everything but gas. When
the $600-per-month payment is pitted against the cost of leasing other cars in
the same price range, it actually makes financial sense for some.
Plus, it's
a flat rate. You pay $600 per month for 24 months for the Momentum version of
the XC40 or $700 for the R-Design version with better wheels, stiffer
suspension, more color options, active-bending lights and a few other upgrades.
As always,
though, there are caveats. To qualify for Care by Volvo, you have to fit within
certain insurance and credit parameters, as determined by Liberty Mutual. So if
you have good credit but you have a few points on your driving record that put
you outside what an underwriter finds acceptable, you're out of luck. There's
no $650-per-month option for a bit higher insurance or to cover your bad
credit. It's all or nothing.
If you
don't qualify for Care by Volvo, the all-wheel-drive (AWD) car starts at
$35,200 and you can purchase it as you normally would.
I asked
about families and couples and how that affects the insurance and price of the
car. A Volvo spokesperson said that if the drivers listed on the policy are all
within Liberty Mutual's acceptable range, the monthly cost of the car is the
same as for a single driver.
If you are
accepted, Volvo sweetens its subscription deal with the ability to upgrade (or
downgrade) to another Volvo after 12 months. After 24 months with the same car,
you can walk away at zero cost as long as you stay under 15,000 miles per year.
After that, as with a regular lease, you'll accrue a per-mile surcharge.
The XC40
packs many of the features found in the outstanding XC90 and XC60, except it
has a more compact design intended for younger drivers (millennials),
first-time Volvo buyers and folks who simply realize they don't need all the
space a larger SUV has to offer.
During a
test drive in Austin, Texas, I found the XC40 to be a worthy addition to the XC
line. Like the XC60 and XC90, its refined interior is one of the best in its
class, with clean lines and controls placed exactly where you'd expect to find
them. All told, it's one of the easiest cars to master: You immediately know
exactly where everything is.
The Sensus
Connect infotainment system continues to be a favorite of mine. A 12.3-inch
touchscreen is available in both the Momentum and R-Design versions of the
vehicle I drove. The vertical layout with additional tabs makes for quick navigation
while the plethora of options available at the top level of the three main
screens means less time delving into submenus that could distract drivers from,
well, driving.
Both
versions of the XC40 are all-wheel drive and have a T5 turbo-charged four-cylinder
engine with 248 horsepower and 258 foot-pounds of torque. A T4
front-wheel-drive version with 187 horsepower and 221 pounds of torque is
expected in the United States this summer. (This car will not be available
through the Care by Volvo program.) The T5 engine doesn't get the pulse racing,
but it does make dashing through the city and around corners at least somewhat
entertaining. When the accelerator is floored, though, the engine makes a bit
of a racket in the cabin.
The
upcoming version of the XC40 with a smaller engine with front-wheel drive will
be cheaper, starting at $33,200. Without driving it, I feel like saving $2,000
on the purchase price for a less capable vehicle seems like a mistake.
On the
road, the XC40 suspension glides effortlessly on highway and city streets,
showing off its luxury pedigree. Volvo also sent me down some rough back roads
during my drive. The car performed admirably, mostly smoothing out ruts and
potholes. Cornering is tight for a vehicle of its size with body roll kept to a
minimum, making some of the more challenging corners during the drive a bit
more spirited than expected.
While the
XC40 is the smallest SUV in the Volvo lineup, it does offer some intriguing
storage solutions. The center console is large enough for a small box of
tissues with room to spare for a few phones. But just in front of it, the
automaker has put a tiny trash bin with a self-closing lid. You know, for all
those tissues. The driver's seat has a pull-out drawer with enough room for a
small iPad. Meanwhile, the speakers have been relocated from the doors to open
up even more space. The compartment is wide enough for a dictionary. I stuck my
laptop in there, and there was enough space such that on sharp turns, it
actually moved back and forth.
The trunk
also gets an upgrade with the floor doubling as a fold-up barrier that keeps
packages from sliding around the storage area. It's great for keeping your
grocery bags from falling over and spilling their contents everywhere.
Combine
these storage touches with a beautiful interior, striking design, a power train
capable of making the commute at least somewhat exciting and suspension that
reminds you that you're riding in a luxury vehicle and it would be a mistake
for anyone looking for a high-end compact to dismiss the XC40. All of that also
makes it the perfect car for Volvo to introduce its Car by Volvo subscription
service.
The
crossover/SUV category continues to grow, and if you're going to experiment
with a new form of car ownership, this is the way to do it. The XC40 is at a
price point that makes a subscription service financially viable for not only
the automaker's loyal customers but also folks new to the brand and the luxury
market in general. Plus, some of these potential customers are used to a
subscription model for other kinds of goods and services.
Beyond
cars, the idea of ownership has changed dramatically over the past few decades.
We've gone from owning CDs and MP3s to paying for monthly access to music via
Spotify and Apple Music. DVDs and Blu-rays have given way to streaming
services. We barely own our phones, with many of us swapping them out as soon
as something shinier lands on the market.
With the
speed of car-tech iteration accelerating almost as fast as our phones', having
a five-year-old vehicle will soon seem as ridiculous to some as having a
five-year-old smartphone. The introduction of mass-produced, self-driving
vehicles will only exacerbate the need for subscription-based vehicles. They'll
be too expensive to own outright.
Right now
Volvo is pushing for a future in which ownership is fluid, and it seems to be
resonating with people. According to the automaker, it's already racked 20,000
global pre-sales for the XC40. Ninety-one percent of those buyers are new to
the Volvo brand. What's more, the company's upcoming V60 wagon will also be available via Car
by Volvo, opening the door to bigger sales numbers.
Expect
other automakers to keep an eye on Care by Volvo. Cadillac and Porsche already
have subscriptions services for their top-of-the-line vehicles, but those start
at $1,800 and don't exactly speak to the average car buyer. The smartphone
generation wants something without hassle that can be swapped fairly quickly;
Care by Volvo offers that.
Volvo might
not have the same luxury cachet of BMW and Mercedes, but if Care by Volvo takes
off, expect that to change as people decide that swapping a car as often as a
smartphone sounds like a better idea than the usual lease.
Correction:
an earlier version of this article stated that Volvo had received 20,000
pre-orders for the XC40 with Care by Volvo. Those 20,000 pre-orders are for all
sales of the vehicle, not just those interested in
the leasing program.
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