- Volvo has ended its vehicle subscription program.
- Care by Volvo was an alternative to leasing.
- The biggest difference to leasing was that customers could end the contract or switch cars after a few months.
Volvo has suspended its subscription program in the United States and Europe “for the foreseeable future,” the company told Automotive News yesterday. Dubbed Care by Volvo, the vehicle subscription service ended on August 1, but people who are still enrolled can finish their term and then become eligible for a $1,000 credit toward a new Volvo purchase or $500 toward a lease.
"This allows for concentrated focus on our core customer offers and the coming introduction of new products, [and an] increase in operational efficiencies," company spokesperson Russell Datz said. In other words, it’s all about cost-cutting.
Care by Volvo was first rolled out in 2017, but some dealers heavily criticized it and then a six-month investigation by California’s Department of Motor Vehicles concluded that the Swedish automaker had failed to properly notify dealers about related changes to the franchise agreement and provided preferential treatment in allocating subscription vehicles to certain stores.
So Volvo started over in 2019, and by 2020, the program was profitable, according to Automotive News. The idea behind the vehicle subscription service was to provide more flexibility than a conventional lease at slightly lower monthly prices. After the latest update to the program terms, customers could choose a car that was in stock and then swap it for another one or terminate the contract altogether after five months without penalty.
The monthly fee included the car, insurance, roadside assistance and other perks, essentially making the ownership experience hassle-free. Prices started at around $600 for a combustion-powered Volvo XC40 and only went uphill from there.
The program helped Volvo reel in people who wouldn’t have otherwise considered a car from the Swedish brand, with 80% of customers new to the marque, according to data from previous years. Dealers got a cut of the subscription revenue and could then list lower-mileage, higher-margin certified models for sale after the terms ended.
The automaker didn’t disclose how many people signed up for Care by Volvo.
